COVID-19 had a massive impact on the global wine industry.
Of course, we know all about how the pandemic impacted wine production and the wine tourism industries. Many producers came up with ingenious solutions to these problems, ultimately leading to wine tourism taking on interesting new dimensions that may benefit the wider industry for years to come.
But COVID-19 also caused issues for producers in terms of consumption.
This was particularly the case during the early stages of the pandemic when many countries entered lockdown and people weren’t able to work anymore. With many choosing to tighten their belts, wine purchases started to decline as many saw wine as a luxury that they couldn’t afford during uncertain times.
Thankfully, 2021 saw a rebound in global wine sales as the world grew more accustomed to the idea of working from home and offices began to open up again. But there was still some uncertainty about what the industry would experience during 2022.
But now, we’re halfway through the year.
And the figures we’re seeing so far seem to indicate that the wine industry is on track for record-breaking growth! Even with the ongoing effects of the pandemic combined with current economic tensions, it appears that the wine industry is well and truly roaring its way back up.
Premium And Sparkling Wines Lead the Charge
If there are any categories of wine that have sparked this massive growth, they are the premium and sparkling categories. And that shouldn’t come as a surprise to anybody who kept track of the issues the pandemic caused. The premium wine sector was particularly affected as many consumers chose not to spend their spare money on expensive bottles of wine.
That has definitely changed.
2021 brought with it a 21% growth in the sales of premium wines, of which sparkling wines like Champagne are a part. And 2022 has seen Champagne, in particular, act as a major driver of premium wine sales growth. Several producers have reported selling out their most current vintages, which was a scenario that seemed impossible in 2020. Furthermore, some producers have been able to increase their prices, both in line with inflation and due to the heightened demand that sparkling wines have enjoyed throughout 2022.
In fact, Champagne prices have increased by 15% compared to what they were in 2021. While this may not be the best news for consumers who are searching for bargains, it’s excellent news for producers that have been battered by economic turmoil in recent years.
More Online Wine Sales
While brick-and-mortar retailers in all industries experienced steep declines during 2020 and 2021, online retailers saw massive gains. This was especially the case in the alcohol sector, which saw online sales grow by 100% in 2021. Of those sales, approximately 70% were for wine.
This gives us a simple message.
Wine lovers have fully embraced the digital realm when making their purchases. And that’s important for several reasons. On the consumer side of things, buying wine online is easier than travelling to a store. Furthermore, online stores offer far greater variety than physical stores, allowing consumers to hunt down wines they wouldn’t be able to find locally.
For producers, the growth of online shopping has played a crucial role in industry sales growth. Many who may have never shopped online before did so for the first time during the pandemic. In the process, they discovered a digital world that gave them greater access to wines than they’d ever had before. And now that more people are confident in spending money on wine the greater variety they have access to has led to more purchases.
Buyers are experimenting by trying new wines.
And producers who may not have been able to sell in certain physical locations before are reaping the benefits that increased online exposure provides. Combine convenience with a growing segment of people buying online and you have a recipe for growth.
The Global Forecasts
If you don’t believe the impact of online shopping and changing attitudes to premium wines could have such pronounced effects on the wine industry, the stats prove everything.
According to IWSR, which is a drinks market analysis firm, projections state that global still and sparkling wine sales will reach $207 billion by the end of 2022. The organization’s latest Vinexpo report shows that this will represent a total growth of 2.15% between 2017 and 2022. While this may not sound like much, 2.15% growth is nearly $5 billion worth of extra sales achieved between 2017 and 2022.
We mentioned that many Champagne producers have started increasing their prices in response to heightened demand.
This is not a premium wine phenomenon.
These price increases are occurring across the entire wine industry. And they’re happening because many producers kept their prices stagnant during the pandemic. Now that we’re mostly over that hump, producers are playing catch-up in addition to adjusting to inflation. The result has been price increases across the board.
That has an obvious impact on revenue growth figures.
Even if the volume of wine being sold wasn’t increasing, price rises would lead to higher revenue figures. But when you combine these price increases with the fact that producers are selling more bottles of wine, you see where some of the industry’s growth is coming from.
The Final Word
So, what have all of these figures taught us?
The obvious lesson is that the global wine industry has done an excellent job of recovering from the pandemic. The premium sector has done particularly well, with Champagne sales rising along with prices. The way the industry has adapted to the online realm has also played a part. Consumers have greater access to wines than ever before and more people have experienced online shopping, which leads to more purchases.
What we have here is a solid foundation for the future.
The wine industry will likely continue its growth as long as producers continue to focus on innovation and quality. And if you’d like to experience that quality, there are plenty of examples of it in the Xtrawine collection.
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