[GL]Premiumisation trend under threat due to Covid-19 pandemic, claims industry expert The trend towards drinking less but better is under threat, according to an industry expert who has warned that the Coronavirus pandemic may have change consumers’ drinking habits for good. Premiumisation has been largely driven by the on-trade, pointed out Spiros Malandrakis, industry manager for alcoholic drinks at Euromonitor International, and now that consumers are being forced to ... Read more[AU] Australian wine association urges governments to allow 2020 vintage to go ahead Cancelling Australia’s 2020 vintage could result in many of the country’s grape and wine businesses going to the wall, the Australian Grape and Wine Association has warned. While it has welcomed the decision taken by the Victorian and New South Wales governments to allow the 2020 vintage to go ahead, it is urging other governments to follow its lead. “We understand the potentially devastating ramifications of COVID-19 on the ... Read more[AU]"Green shoots" of recovery detected in China by Australian producers Australian producers are reporting “positive signs” from China as the country slowly emerges from its Coronvirus lockdown. The Asian powerhouse is the largest market for McLaren Vale and Adelaide Hills company Wines by Geoff Hardy. CEO Richard Dolan told Adelaide's Independent News Daily that sales this year were down between 60 to 7% on the same time in 2019, but “green shoots” were starting to appear in China including a ... Read moreGlobal organic grape area by country, 2017 Source: aawe wine economics Read more[NZ]New Zealand goes into lockdown, but harvest allowed to continue Despite New Zealand going into lockdown in an attempt to slow the spread of the Cornavirus, the harvest is still going ahead as usual. Addressing the nation today, the Prime Minister Jacinda Ardern has given New Zealanders two days notice to to get ready for the month long lockdown. The country has been put on an Alert Level 3 and all non-essential businesses, as well as schools, are being compelled to close within the next 48 hours. All citizens, except those ... Read more[GB] UK drinks businesses urge Chancellor to save them by scrapping duty payments for six months Thirty two wine and spirits companies have joined the Wine & Spirit Trade Association in sending a letter to the Chancellor, Rishi Sunak MP, urging him to suspend all alcohol duty payments for at least six months - starting with those due on March 25. The move, they say, is a “vital lifeline” in saving drinks businesses on the “brink” of collapse from having to pay an estimated combined £5.8m on ... Read more
Exclusive: This week's report...
Back in the USSR ...
By Anton Moiseenko in Moscow
"There’s a simple reason to come in for an exhibition to Russia — the focus and the ability to see many market players in one place, feel their needs and make personal connections..." Anton Moiseenko
Ask 10 wineries how the Russian market is doing for them and you’ll get 10 different answers from “it’s very small” to “it’s one of our top 10 markets”. This variety of opinions is easily explained ...
Peripheral thinking doesn’t work with Russia: if you want to be there, you have to work on it, see customers and even travel across the country. If it’s not for you...
The market structure It’s safe to say that the Russian wine market structure is quite traditional: there are importers and distributors ... who sell to all other channels, from supermarkets and restaurants to specialised shops and private clients. Despite some attempts to nationalise the alcohol trade and transform it into a monopoly...
Regulations and tariffs A state-imposed EGAIS electronic system regulates the alcoholic drinks turnaround. Because of that wineries cannot send samples directly via normal delivery channels — a special stamp has to be on every ...
Both still and sparkling wines excise taxes are expected to be gradually raised further in years to come. There’s also a 12.5% customs duty and a 20% VAT. Wine importers have been unsuccessful in fighting rising excise duty taxes, as they have been unsuccessful in opposing .... anything else.
The demand: styles and price points The average alcohol spend in Russia is 800 RUR ($13) per purchase (Deloitte CIS, 2019), which sums up at $780 annually. This is not very revealing since wine is just a part of the equation. Sweeter style, higher alcohol wines are known to be loved by Russians. The HoReCa market is different..
Micro trends... Grower Champagne, whilst remaining a niche offering for HoReCa / private segments, has been a point of interest among the sophisticated clientele in places where sommeliers play an important role. Instead of carrying one-two major brands of Champagne like several years ago, Russian distributors are looking to...
So, there’s this general idea that the Russian market is hard to deal with.
This is partly true, mostly because of its instability and unpredictable nature than anything else, but also due to the ...
Although one thing is clear — with the right approach, the Russian market has the potential to become a good share of your sales looking forward.
“... Online sales are “booming”, with many customers using the internet to shop for the first time.” ... Peter Nixon, CEO, Dan Murphy's, AustraliaWine sales across many international markets are soaring, as consumers batten down the hatches and lock down while the Covid19 pandemic continues to take its toll.
According to Peter Nixon, category manager at Dan Murphy’s, one of Australia’s top chain stores, online sales are “booming”, with many customers using the internet to shop for the first time.
Meanwhile, in the US it’s the same story, with American shoppers stockpiling wine according to some bricks and mortar retailers. Rich Bergsund, CEO of wine.com told Meinginers, that sales have doubled in the last week compared to the same time last year, and tripled last weekend. Demand is coming from both existing and new customers, adding that while customers are spending slightly less per bottle ($26 rather than the usual $32 average), they are buying much more.
In the UK, leading wine retailer Majestic has also seen a spike in sales with its website crashing on Saturday due to "unprecedented demand" as shoppers also prepare for a lockdown. The site is still offline, and the retailer has temporarily closed its stores to give its staff some respite and enable it to restock...company saying that normally these kind of peaks are only usually seen at Christmas.
Bucking the trend, Germany’s biggest wine company Hawkeso said it was not yet experiencing any notable uplift in sales.
Meanwhile, internet retailer Vinexus Weinhandelsgrippe, with sites in Austria, Switzerland, Denmark, Germany and the Netherlands, reported that it had only seen a slight increase in sales since last Friday, adding it was too soon to say with any certainty whether this was the “first sign of a shift in consumer buying behaviour,” and the beginning of a real trend.
But it’s in Italy, one of the country’s hardest hit by the coronavirus, and where citizens are in complete lockdown where sales have rocketed the most. According to Andrea Antinor, founder of Winelivery, sales in Rome were up by 240%, in Milan by 230%, Bergamo 220% and Florence 190%.
Whilst online sales are peaking in general, a report by Brand Finance, who assessed the risk of the Covid-19 pandemic on the brand values of the world’s biggest companies, has forecast that Covid-19 will cost industry up to €1tn.
“The Coronavirus could cost industry up to €1tn with the aviation, tourism and retail sectors likely to be hardest hit...." Brand Finance Report - 2020 _____________________________________
“The COVID-19 pandemic is now a major global health threat and its impact on global markets is very real,” said Brand Finance’s CEO David Haigh. “Worldwide, brands across every sector need to brace themselves for the Coronavirus to massively affect their business activities, supply chain and revenues in a way that eclipses the 2003 SARS outbreak. The effects will be felt well into 2021.”
2020 Southern Hemisphere Harvest & Market Update - VIEW HEREView a VINEX online recording discussing the 2020 Southern Hemisphere harvest and market conditions presented by Emile Gentis in South Africa, David Kingsbury in South America and Steve Saffioti in Australia/New Zealand. Also, Denys Hornabrook presents an overall view of the market and competitive price comparisons, and shares several tips when offering or sourcing wines through the exchange.