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ProWein’s 20th anniversary survey reveals wine industry’s vision of its own future
Global wine industry is hopeful but realistic about future challenges
ProWein – the Leading International Trade Fair for Wines and Spirits which will take place in Düsseldorf, Germany, from March 23-25, 2014 – will be celebrating its 20th anniversary in 2014. The organizers of ProWein took this as an opportunity to provide the international wine sector with some ideas as to what the global wine industry might look like in another 20 years time. The survey “The International Wine Industry: Global Experts’ Vision 2034” which was commissioned by ProWein, and carried out by renowned UK-based market research institute Wine Intelligence, has revealed five main areas in which the industry – according to leading wine professionals around the world – can expect to see big developments by 2034.
Consumers, not producers, will rule the wine industry in 2034
The wine industry will need to be more responsive to consumer needs leading to an end to top-down education of the consumer and more emphasis on experiential and emotional engagement with consumers in communications.
Over three quarters of those surveyed (77%) believe that consumers will have shorter attention spans in 20 years’ time compared with today, while 58% acknowledge that the main source of trusted information will remain family and friends – though social media will increasingly be the conduit by which such information is shared. There is an opportunity for wine marketers to take an imaginative approach in the ever-changing consumer environment where mobile technology and social media are set to dominate the consumer experience.
Encouragingly, respondents believe consumers will continue to want to drink wine – and indeed spend slightly more on it – over the next 20 years. And despite shorter attention spans, their knowledge levels about wine will be higher in 20 years, because information will become easier to access and catalogue.
Distribution will polarise as supermarkets become even more dominant
66% of respondents think that supermarkets will dominate the wine industry in 2034. They expect supermarkets to become even more powerful, and there is a feeling among many that the distribution of wine will further polarise. While mass-production wines focus on multiple retailers, niche and boutique producers will find a route to market among more specialist sellers. While this polarisation is already apparent in some markets it is expected to occur on a global scale with wines that don’t fit into either category finding life increasingly difficult.
It’s anticipated that online sales will become much more important. Will bricks and mortar wine shops disappear? Some believe their days are numbered, but many still believe the personal aspect of such stores will continue to be valued. Specialist wines will need to focus on stories and messages that resonate with consumers.
We can also expect to see producers bypassing these channels altogether, with many investing in direct-to-consumer sales and marketing.
In contrast to the activity and opportunities predicted in the off-premise, many foresee a continued shrinking of the on-premise globally as consumers choose to eat and drink at home.
North America and China will be the top investment targets
When invited to spend a theoretical investment budget, for which the returns would not be visible for 20 years, the USA and Canada just edged China into second place. A third of respondents said they would invest in some or all of these countries. North America is the safe bet: a huge market already, but with huge scope for more growth. In China, the industry sees the potential for an eastward shift in both production and consumption of wine.
India and Latin America are also regarded as growth areas, followed by Eastern Europe, though concerns were raised about the barriers faced by imported wine in some of these territories.
When asked about the styles of wines that will be of importance in 20 years time it is clear the trade believe the sparkling trend is set to spread globally with rosé wine taking a back a back seat.
Packaging will have a bigger role to play
The overwhelming majority of respondents (82%) believe that packaging technology is going to influence the wine market over the next 20 years. More convenient types of packaging, for new consumers in emerging parts of the world, are part of the picture. But more personalised packaging, and environmental sustainability, are also issues that the wine industry will be addressing.
While it’s unlikely that traditional formats will disappear, we can expect to see alternative packaging making something of a breakthrough. There is also a feeling among some respondents that packaging design will have an important role to play in recruiting new consumers, and this may mean deviating from current design norms.
Threats will come from tougher regulation – and from other categories
58% of respondents warn that regulations could present a real challenge for the wine industry in the coming decades as the alcohol category faces some of the same restrictions that already apply to tobacco. Government intervention in pricing, marketing, labelling and even consumption (for example, in terms of the legal drinking age or drink-driving limits) is a real possibility in many countries.
But wine also faces a challenge from other alcoholic drinks. This is already the case in developing markets, where it has to compete against local specialities. But even in more mature markets, consumers are embracing craft beer, a new wave of cider products, cocktails and innovative spirits. There is a sense that many of these products can outmanoeuvre wines in terms of their packaging and marketing budgets.
Another threat preoccupying wine industry professionals mind’s is the potential impact of climate change on the global wine-making landscape.
ProWein 2014: March 23-25, 2014 – Düsseldorf
The data for this study was collected via an online survey and interviews with 115 leading wine professionals around the world. A comprehensive summary of the findings (in English) will be available from Messe Düsseldorf as from March for the price of Euro 249. Exhibitors at ProWein 2014 pay the reduced price of Euro 199.