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Posted: Friday, 02 October 2020 23:58

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Blog: India’s Old Normal is World’s New Normal in Wine

Oct 02: India’s Old Normal is known to have most wine consumption before dinner and without food but the initial study by the London-based Wine Intelligence suggests that there was an increase in tendency of consumers drinking wine outside the mealtime while the overall consumption has remained fairly constant despite suspension of online trade , writes Subhash Arora who suggests that the wine consumption has been badly affected in India, primarily due to choked supplies, making it a disastrous year for wine sales

A glance at today’s weekly Blog of the Australian Dan Traucki in WineAssist caught my attention. Dan talks about the September Report from the London-based Wine Intelligence which he quotes, ‘when the pandemic started, wine drinkers obviously began drinking more at home as on premise venues were closed. However, interestingly they found that the overall consumption of wine remained fairly constant.’  

The Report

 ‘As we reflect on the extraordinary events of the past six months, we are starting to see some patterns of behaviour which might help our industry understand how their global consumer base has changed. The first thing to note is that behaviour hasn’t really changed that much. Consumers across major global markets have shown a remarkable tenacity to maintain pleasurable habits such as alcohol and socialising, even when lockdown restricted the normal course of these activities.  People enjoyed sharing their drinks with a Zoom call to friends. Long queues outside the supermarket made the buying shift to online instead.

The initial review of the data shows some fascinating patterns, and not necessarily what one would expect to see. One of these patterns is the changing nature of the two key wine drinking occasions where the majority of wine is consumed- the end-of-day drink and the glass of wine with an informal meal at home. They also included a late evening drink, or even a drink with lunch.

At the height of lockdown, in March and April, most of the markets recorded an increase in the at-home-without-food drinking occasion; similarly, all of the markets bar one saw a fall in recalled wine consumption with a meal. The interpretation at the time was that, as most people were home during the day, the traditional routine of a drink only with dinner was probably being disrupted – and watching the news at the time may have been an incentive for more people to reach for a glass. It also explained why overall wine sales volumes were mostly stable in these markets – and in some cases rose slightly.

An intriguing picture started emerging in July. The decline in wine with food reversed or at least moderated in most markets, with China showing the biggest change. At the same time, at-home drinking without food actually increased in frequency. There might have been a nominal seasonal effect in this change, with northern hemisphere summers normally coinciding with more outdoor, non-food occasions. But the trend also seemed to be present in Australia through its mid-winter.' according to the Report.

The data shows the growing opportunity for wine as a drink of choice more frequently at non-food occasions, and suggests that wine might even be taking market share from other categories.

India’s Normal

India’s old Normal has been anyway the same-so far as drinking wine with or without food is concerned. Wine is generally consumed as an alcohol beverage when the evening starts. Wine bottles are kept aside when the dinner is served. Covid-19 lockdown announced from march 25 was sudden. There was an immediate closure of all on-trade activity and even the retail sales were banned till May 4 throughout India. So there was no wine availability anywhere. Most producers and importers reported a sale of 0-25% of their normal sales from March-end till May. When the Retail sales were opened on May 4, many States imposed heavy Covid Tax of up to even 75% of the MRP in a State like Delhi. The astronomical increase in prices made buying from Retail also prohibitive. Online sales are not allowed in India, thus choking wine supplies completely. Many wine drinkers chose to drink whatever else was available- beer, whiskey or other liquor.

There was some increase in consumption in the house (off-trade) initially and perhaps there was a distinct increase in drinking with food in the house too. With online sales and home deliveries allowed in many states now, the retail sales have looked up in all these states, thus increasing consumption. However, online sales have been nil. Initially, the sale of alcohol was not allowed in the hotels and restaurants when they were allowed to open under rules of Social Distancing. Some states allowed liquidation of their stocks by selling directly to their customers. Recently, many states have allowed sales on-trade but the people are still reluctant to go to bars and restaurants with the result that the sale in the restaurants has been negligible even now.

Most sources confirm that April-September saw a downturn of wine consumption by 50-75% for the April-September, 2020 though reliable data is not available. This estimate is based on our continued discussion with the leading stakeholders. There is general consensus that wine consumption will be dismal in 2020-21, unless things improve in the next one-two months.

Subhash Arora  

2 October, 2020

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