Global opportunities and risks Flashcards
Global Opportunities Product NOLO
Wine leads the low-alcohol sector, showing an 8% volume growth in 2023 across 10 key markets, mainly driven by the US.
US innovation in low-alcohol wines emphasizes health-oriented features like fewer calories, reduced carbs, and often zero residual sugar.
No-alcohol wine also rose by 7% in volume in 2023 in these markets, yet struggles with quality and taste perceptions and limited availability, leading some consumers to switch to other no/low options like beer and RTDs.” (IWSR)
Global Opportunities Place - Online Channel
Wine’s growth in ecommerce is slowing, with market share being eroded by beer and spirits.
Across key markets, wine accounted for 38% of total beverage alcohol (TBA) ecommerce by value in 2020, but that figure fell to 33% in 2022, and is expected to decline further to 28% by 2027. IWSR
Online sales represent 30% of the wine market in China, popular among tech-savvy millennials through platforms like Tmall, JD.com, Pinduoduo, and Taobao
Global Challenges Market Dynamics
Tourism and Trade: Tourism is recovering but hasn’t reached pre-pandemic levels, partly due to restricted Chinese international travel. Intercontinental wine trade dynamics are shifting, with Australia finding new major partners in the UK and India, and New Zealand signing with the EU. The UAE is seeing notable growth, moving up 12 places in market attractiveness.
Global Opportunities - People
The industry faces challenges in recruiting younger LDA+ consumers, particularly Gen Z, who are exploring non-traditional segments like RTDs, cocktails, and craft beer.
Millennials, while more discovery-oriented, show potential for trading up through price tiers if offered clear premium cues.In Australia, the proportion of LDA-24 consumers expressing confidence in their wine knowledge has increased from 19% in 2010 to 50% in 2023; a similar dynamic is visible in Germany (from 15% in 2010 to 44% in 2023) and the UK (21% to 47%).
The exception is the US (38% to 33%), where confidence was already relatively high. IWSR
Global Opportunities- Price
Consumers are adopting a ‘less but better’ purchasing dynamic, spending more within this context. IWSR
Starting from May 1st, New Zealand wines will benefit from tariff-free entry into the European Union under the new NZ-EU Free Trade Agreement.
Global Opportunities Place- Emerging markets
Asia Pacific: Emerging markets like Thailand, Malaysia, Vietnam, the Philippines, and Indonesia show growing appeal due to expanding consumption and premium imports.
Latin America: Struggles to recover from the pandemic with falling market rankings due to economic and social crises.IWSR
Global Opportunities Product- Sparkling
Despite overall declines, opportunities persist, particularly in sparkling wine which is expected to see a CAGR of +1% from 2022 to 2027. IWSR
Global Opportunities Sustainable
sustainability is an increasingly high priority for consumers, with two-thirds of regular wine drinkers in the biggest markets describing it as important to them – and as high as 70% of regular wine drinkers in the US, and 94% in China.IWSR
Global Challenges Consumption
Wine consumption fell 2.6% in 2023, slipping for a second year to the lowest level since 1996, (OIV).
Wine is facing structural volume declines in mature markets like France and Italy and an over-reliance on older drinkers.
Global wine production fell 9.6% to 237.3 million hl in 2023, below the OIV’s November estimate after Italy and Spain significantly reduced final output figures IWSR
Global Challenges Price
Record Inflation Rates: Global inflation hit 6.8% in 2022, affecting especially advanced markets used to low inflation. This might temper the ongoing premiumisation trend in the wine market.
The OIV said the average wine-export price rose 2% to €3.62 per litre, the highest ever, with inflationary pressures again the likely explanation.IWSR
Global Challenges People - Labour shortages
Nearly half (45%) of all businesses in the global wine sector are grappling with a labor shortage, according to studies conducted by the Geisenheim University for the “ProWein Business Report 2022”Among sales channels, the hospitality sector (90%) and restaurants (66%) reported significant labor shortages.
Global Challenges Supply Chain Disruptions
The war in Ukraine and lockdowns in China have caused significant disruptions in international trade, leading to cost increases and raw material shortages. This has benefited regionalism, a trend that has strengthened since the pandemic began.
Global Price Luxury
The latest results from the conglomerate LVMH show the wine and spirits division’s organic revenue falling by 4% compared to the previous year. This contrasts with a 13% organic growth in the total revenue of the group.
Global Trends Climate Impact
Rising global temperatures and extreme weather conditions continue to challenge vineyards worldwide, affecting production quality and yields, leading to price increases and product shortages.
Global Trends Drink in moderation
According to the WHO, consumers worldwide drink an average of around 32.8g of pure alcohol per day, which is roughly equivalent to what Wine in Moderation classifies as low-risk for men.
The number of people receiving clinical treatment for alcohol poisoning in 2022 is the lowest it has been since 2002. German Federal Statistical Office (Destatis), 2024; Federal Centre for Health Education
