In the most unpredictable of the years, find out how Wine Intelligence’s global trends for 2020 have so far held up, and their impacts in Brazil
One can say that we live in different world than we did nine months ago, when Wine Intelligence outlined its 2020 predictions for the global wine market. Much has changed since then. But not everything. From new packaging to the re-emergence of traditional wine regions, we bring here an assessment of how these trends are behaving under the new global circumstances, and their effects on the Brazilian market.
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Wine consumption at home stood out as a leisure alternative for consumers under quarantine, which also generated the expansion of online wine sales (Credit: oneipunch).
1. Wine volume consumption will decline at a global level
In December we said that global wine consumption would decline overall in 2020. We think this will come true, though clearly for more reasons than we offered at the time. Perhaps more interesting will be the fact that global wine consumption, while down, is not going to decline as much as, say, purchases of coffee to go, or meals out or luxury goods. In some markets, notably the US and some European markets, wine has benefited from people spending less money on going out, holidays and other leisure behaviour. The category’s ability to be uplifting, comforting and intellectually interesting has aligned perfectly with consumers’ need to retain some ‘fun’ in their lives when they are stuck at home, unable to carry on their lives as normal.
“Brazilian wine e-commerce saw a substantial increase in the influx of news customers, reaching a 30% growth among major online players.”
In Brazil, expectations ran contrary to the global trend of wine consumption decline before the outbreak of the pandemic, with an increasing number of regular wine consumers looking for higher quality alcoholic beverages. A few months after the start of social distancing, the increase in wine consumption at home became a hot topic in the media. According to Ideal Consulting, wine imports to Brazil grew 8% in volume between January and June 2020. Furthermore, wine e-commerce saw a substantial increase in the influx of news customers, reaching a 30% growth among major online players.
Despite encouraging results from supermarkets and online channels, for the next 12 months one must remain cautious about the Brazilian wine market performance, which will largely depend on the recovery of bars, restaurants, hotels and social events, as well as on the recovery of the economy as a whole.
In 2020 the French were the first trying to regulate "natural wines", which in other markets do not follow a common criteria for production and labeling (Credit: Morning Claret).
2. Sustainability and other responsibility signalling will get more critical scrutiny
The sustainability conversation has not gone away, but its message is not as clearly heard or understood in an era where consumers are more worried about more immediate health and wellbeing concerns. We said in December that there would be more scrutiny of sustainability claims, and more rejection of ones that are spurious or irrelevant. We note that more formality and regulatory attention is now being paid to wines claiming certain sustainability benefits, with France introducing a definition of natural wine in April 2020. We also note the introduction of such things as ‘clean wine’, and the industry’s critique of such claims, best summarised with characteristic eloquence by both Robert Joseph last month, and more recently by Felicity Carter in The Guardian. As to the broader conversation around sustainability, we think that will resume in earnest once the airtime currently given to the virus and possible vaccines subsides.
“Research indicates that sustainability claims are still not well understood by Brazilian consumers.”
In the Brazilian market, the wine trade is increasingly aware of the importance of sustainability. One can notice that by the growing offer of organic, natural and sustainable wines in stores, supermarkets and online. Nonetheless, most of Brazilian consumers are on discovery mode and research indicates that sustainability claims are still not well understood, remaining a secondary aspect in purchasing decisions.
Unlike California, Brazil only recently allowed CBD strictly for medical purposes, which makes it an unlikely trend in wine for this market's foreseeable future (Credit: SFD).
3. CBD wine will start to appear more frequently on shelf where it’s legal
The CBD revolution in wine is not yet upon us, though the virus crisis appears to be hastening the arrival in the mainstream of the idea that cannabis compounds do have some health benefits (though exactly what these are appears to be a continuing source of debate). We noted in December that it took the hard seltzer category seven years to become mainstream, and the cannabis wine category may take as long (or even longer). The fact that it exists, has serious players behind it and is innovating products at a time when people are looking for ways to enhance their health, suggests this is a longer term trend that will be with us long into the coronavirus era.
“CBD wines are still a distant possibility in the Brazilian market and much debate and legal disputes are still on the way.”
Meanwhile, CBD remains largely unavailable and unknown for Brazilian consumers. Only in December 2019 has the Government authorized the sales CBD-based substances strictly for medical purposes. Therefore, CBD wines are still a distant possibility in the Brazilian market and much debate and legal disputes are still on the way before it becomes available for curious drinkers.
Provence-style rosés have been gaining the preference of wine consumers all around the global market, including Brazil (Credit: Elle Hughes).
4. It will be a renaissance year for some of the less high-profile wine producing countries: Germany, South Africa, Portugal, Greece
In December we suggested that 2020 would be a year where some old styles become new again to the next generation of consumers – high quality German Riesling, the refreshing whites and great value red blends from South Africa and Portugal, and the fascinating array of lighter white wine styles coming from countries such as Greece. Fresh premium rosé wine styles will also advance, probably from outside the Provence region where their success is starting to constrain supply. Why these? We suggested they would meet the growing consumer trend for more aromatic, fresh, lower alcohol whites and lower tannin but interesting reds. With the notable exception of South Africa, where the politics of the coronavirus has stopped the wine industry’s ability to sell its product, the fresher, low tannin style appears to be advancing on all fronts, according to part-year data seen so far and feedback from the global supply chain.
“An ascending category in 2020 is that of Brazilian fine wines, with an impressive 50% growth in volume during the first semester.”
In Brazilian soil, Rosé wines are also living through a revolution: while they represented only 4% of the wine market in 2016, they have continually expanded and reached 7% by mid-2020. Another ascending category in 2020 is that of Brazilian fine wines, with an impressive 50% growth in volume during the first semester in comparison to the same period in 2019.
In 2020 several companies launched canned wines in the Brazilian market, including the startup Lovin’ (Credit: Lovin).
5. More businesses will invest in visually appealing packaging and serve formats
For 2020 we predicted that one of the most exciting areas of change would be in packaging and serve formats. In this area we seem to be right, but not necessarily for the reasons we stated. We thought it would be driven by the needs of business to reduce carbon footprint, to offer more recyclable containers and to offer serve sizes that fit an age devoted to lowering volumes but increasing values. As it turns out, the packaging innovation has been towards products that are easy to buy in bulk (box wine) when you are shopping during lockdown, or in easily portable formats such as cans for the al fresco occasions that have replaced visits to bars and restaurants. We think that the longer-run trends of carbon reduction and environmental improvement will continue to matter, particularly as both are more likely to be taxed by governments trying to recoup the costs of coronavirus-related support for the economy.
“With less time to browse, consumers appear to be opting for brands they recognise and/or visual characteristics that appeal.”
We also said that astute brand owners would double down on investing in labelling and design that successfully treads the delicate line between distinctiveness and centrality in the wine category. This too has proven to be prescient, again not necessarily in the way we thought. Restrictions on how long you can spend – or want to spend – in a shop has meant that time in the wine aisle has been constrained. With less time to browse, consumers appear to be opting for brands they recognise and/or visual characteristics that appeal.
Brazil has followed on the same path and there was a profusion of new canned wines released into the market, while premium producers such as Cave Geisse now offer the bag-in-box format as an alternative to classic bottles. Due to the changes in consumption habits and the efforts to attract new consumers, this is a trend that is bound to stay. However, in terms of visual attractiveness, we still have a long way to go.
Text adapted a from the article by Richard Halstead on Wine Intelligence's website, and updated with the analysis of the Brazilian market.
Also check out the Global Trends in Wine 2020 Report, updated and released as open-source.
Find out more about the most attractive wine markets in Wine Intelligence's Global Compass 2020 Report.
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