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Posted: Friday, 03 July 2020 21:45

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Covid-19: Vinexpo goes Digital with First Wine Webinar with IWSR

July 03: Organisers of Vinexpo have gone digital with a webinar on Wine: The New Normal-Opportunities and Challenges for the Global Wine Industry up to 2024, conducted by Mark Meek, CEO of IWSR and introduced by Rodolphe Lameyse, CEO of Vinexpo, writes Subhash Arora who attended the first of four such quarterly discourses planned and found it more interesting and insightful than those conducted traditionally in Pre-Covid times and is sure this would become a trend with the Bordeaux-based exhibiting company

Vinexpo is a biennial international wine show that has been organised for the last 40 years. Over the years it has also entered Asia Pacific and the US as venues for different versions of Vinexpo and is quite strong in Hong Kong, Shanghai and New York. It has now tied up also with Wine Paris and is already slated to have Vinexpo Paris on February 13-15, 2021 when it is also planning to have the main Vinexpo in Bordeaux in June.

One of the anticipated events before Vinexpo is a Presentation of the current scenario in the wine industry which is made by their partners IWSR. Thanks to Covid-19 they organised a Webinar introduced by Rodolphe Lameyse, CEO of Vinexpo and presented by Mark Meek, CEO of IWSR since 2013, which has been focusing on the industry for 50 years and working with Vinexpo for 40 years, He focused on 10 major markets- US, France, Germany, Italy, UK, Benelux, Netherlands. Africa, South America and Asia (focusing on China and Hong Kong-where two of the shows are held).

One of the key reasons for the webinar was to look at the impact of Covid on the world wine market in 2020 and project the extent of rebound by 2024. He opined that even before Covid, the world was facing problems-like climate change, Hong Kong disruption, Brexit, tension between countries. Barring Sweden, there has been a steep drop of about 12% in the wine market, which is likely to recover with a Nike Swoosh Rebound by 2024 or even later for a few categories. This is unlike the V shaped recovery in 2009.

There is already a propensity to drink less but better; in that sense it will be different than the drop and recovery in 2008-9. On-trade sales have shut down this time around and travel is also curtailed. The economy will take longer to revive. Indoor events are likely to be delayed thus it will take longer for the beer market to recover.

There has been a long-term decrease in wine consumption and it continued in 2019 with a drop of 1.1% even though the value was higher by 0.6%. The wine category is expected to drop by an average of 13.6% in 2020 and will not recover to 2019 levels by 2024. U.S. wine consumption dropped for the first time in 25 years. But sparkling wine is a bright spot that went up by 1.4% in 2019.

While projecting Trends, Mark said that during times like these, the changes tended to accelerate or decelerate post such changes. He mentioned particularly young drinkers of legal age, who were consuming more spirits and RTD and this resulting in a drop and pressure on production. Mark also fears that the governments will raise taxes on wine to meet Covid expenses. RTD is one category that has seen a growth of 19.6 % in 2019 and are likely to see an increase of 6.6% in 2020. Sparkling wine is also likely to see an increase led by Prosecco.

There is also an increasing trend of no or low-alcohol wines. Champagne demand is set to fall further since these are not celebratory times and there is a fear lurking about the second wave of Coronavirus. Sparkling wines will recover though Prosecco begins to flatten out with decline in Italy, Germany and UK holding the category back. Shipments have been down in 2020 for champagne but the consumption is in the second half of the year. In France where it is consumed less for celebration but more as a regular drink, it will see less of a fall.

Wine is premiumising in most markets and there are also health concerns affecting wine sales but wine is getting less attractive to younger consumers for whom packaging and presentation formats will be more important and thus will present an opportunity. Low Alcohol wines will face flavour issues though sparkling wines will see a good spot in both alcohol and non- alcohol segments. In Europe, all wines will go down in sales in double digits and the category will fall short of a full recovery.

E-commerce is an important segment that will see further growth. In China, 30% of sales are online and there is little chance of its slowing down-also wine is bought online the most as a category, compared to beer and spirits. Young people prefer this channel- they purchased wine worth $8 billion online in 2018. In the 10 markets studied, $21 billion was sold in this mode and it will expand at a cumulative average rate of 15.8% from 2019-2024 to $45.5 billion.

Organic wines have had a small base and have been growing in sales-this trend will continue to grow. No alcohol and low-alcohol have shown good growth but flavour acceptance will be a challenge. The category will benefit from wellness and health concerns, social media and Generation Z. Similarly, the scope of growth for biodynamic and natural wines is there.

The one-hour presentation was crisp and lucid with plenty of charts and with no interruptions with a few questions answered. Future presentations will hopefully be as informative and useful to track trends in the industry.

Subhash Arora

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