On the occasion of its 20th anniversary, the organizers of ProWein, International Trade Fair Wines and Spirits, (March 23 – 25, 2014 in Düsseldorf, Germany) commissioned the survey “The International Wine Industry: Global Expert’s Vision 2034” with the renowned UK-based market research institute Wine Intelligence. The results of this survey reveal five main areas in which the industry – according to leading wine professionals around the world – can expect to see big developments in the next 20 years.
Consumers, not producers, will rule the wine industry in 2034
The wine industry will need to be more responsive to consumer needs, leading to end top-down consumer education and placing more emphasis on experiential and emotional engagement with consumers in communications.
Over three quarters of those surveyed (77%) believe that consumers will have shorter attention spans in 20 years’ time compared to today, while 58% acknowledge that the main source of trusted information will remain family and friends – though social media will increasingly be the channel to share information. There is an opportunity for wine marketers to take an imaginative approach in the ever-changing consumer environment where mobile technology and social media are set to dominate the consumer experience.
Encouragingly, respondents believe consumers will continue to want to drink wine – and indeed spend slightly more on it – over the next 20 years. And despite shorter attention spans, their knowledge levels about wine will be higher in 20 years because information will become easier to access and catalogue.
Distribution will polarize as supermarkets become even more dominant
66% of the respondents think that supermarkets will dominate the wine industry in 2034. They expect supermarkets to become even more powerful and there is a feeling among many that the distribution of wine will further polarize. While mass-production wines focus on multiple retailers, niche and boutique producers will find a route to market among more specialist sellers. While this polarization is already apparent in some markets it is expected to occur on a global scale with wines that don’t fit into either category.
It’s anticipated that online sales will become much more important. Will bricks and mortar wine shops disappear? Some believe their days are numbered, but many still think that the personal aspect of such stores will continue to be valued. Specialist wines will need to focus on stories and messages that resonate with consumers.
It can also be expected to see producers bypassing these channels altogether, with many investing in direct-to-consumer sales and marketing.
In contrast to the activity and opportunities predicted in the off-premise, many foresee a continued shrinking of the on-premise globally as consumers choose to eat and drink at home.
North America and China will be the top investment targets
When asked where they would spend a theoretical investment budget for which the returns would not be visible for 20 years, survey participants named the U.S. and Canada first and China second. A third of respondents said they would invest in some or all of these countries. North America is the safe bet: a huge market already and with an enormous scope for more growth. In China, the industry sees the potential for an eastward shift in both production and consumption of wine.
India and Latin America are also regarded as growth areas, followed by Eastern Europe, though concerns exist about the barriers faced by imported wine in some of these territories.
When asked about the styles of wines that will be of importance in 20 years time, the sector believes that the sparkling trend will spread globally with rosé wine taking a back seat.
Packaging will play a bigger role
The majority of the survey respondents (82%) believe that packaging technology is going to influence the wine market over the next 20 years. More convenient types of packaging, for new consumers in emerging parts of the world, will be an important part. But more personalized packaging and environmental sustainability are also issues that the wine industry will be addressing.
While it’s unlikely that traditional formats will disappear, it can be expected to see alternative packaging making a breakthrough. Some respondents indicated that packaging design will have an important role in attracting new consumers which may mean deviating from current design norms.
Threats will come from tougher regulation – and from other categories
58% of the respondents warn that regulations could present a real challenge for the wine industry in the coming decades as the alcohol category faces some of the same restrictions that already apply to tobacco. Government intervention in pricing, marketing, labeling and even consumption (for example, in terms of the legal drinking age or alcohol limits when driving) is a real possibility in many countries.
Wine also faces a challenge from other alcoholic drinks. This is already the case in developing markets, where it has to compete against local specialties. But even in more mature markets, consumers are embracing craft beer, a new cider products, cocktails and innovative spirits. There is an overall impression that many of these products can “out-maneuver” wines in terms of their packaging and marketing budgets.
Wine industry experts see another threat in the potential impact of the climate change on the global wine-making landscape.
The data for this study was collected through an online survey and interviews with 115 leading wine professionals around the world. A comprehensive summary of the findings (in English) will be available from Messe Düsseldorf in March 2014 for Euro 249 (Euro 199 for ProWein 2014 exhibitors). Order can be placed at www.prowein.com.
ProWein 2014 will take place in Düsseldorf, Germany from March 23 - 25, 2014. With its 4,800 exhibitors from 50 countries and about 45,000 international trade visitors, ProWein is the perfect place to show, find and discuss trends and developments in the global wine and spirits industry.