The International Organisation of Vine and Wine’s (OIV) annual update on the current situation in the wine industry at global level is always eagerly awaited. Every year, the organisation publishes essential data for understanding changes in the wine world. The legitimate, and most compelling question for 2020 is: what effects did the COVID pandemic have on global consumption and international trade? The word that best describes this extraordinary year is resilience. Why? What opportunities and trends are emerging? We share some of the key takeaways from OIV’s presentation.
- Global consumption: Trends in the main consumer countries
- The impact of Covid-19 on the wine industry: noteworthy trends
- Who are the winners and the losers?
- What new opportunities have been thrown up?
Global consumption: Trends in the main consumer countries
At global level, estimated consumption is down by 3% overall to 234 million hectolitres. As a reminder, the top five wine consuming countries in the world are the USA, France, Italy, Germany and the United Kingdom. 2020 revealed strong variations due to COVID which, as OIV points out, depended on: “factors such as national consumption patterns – the significance of wine in relation to total alcoholic beverages – the duration and strictness of lockdown measures and associated policies such as sales bans, as well as the importance of tourism in national wine consumption”.
Italy triumphed across-the-board, drinking 7.5% more wine than in 2019, equivalent to 24.5 million hectolitres, bringing it closer to France. Aperitifs on Zoom or Skype made no major inroads in France, where consumption figures showed no change on 2019 at 24.7 million hectolitres. The story was similar in the USA, where 33 million hectolitres were consumed, just as in 2019, though the States remained the world’s leading wine consuming country. In South America, overall wine consumption increased in 2020 compared to 2019. In Argentina, consumption increased by 6.5% on 2019 to 9.4 million hectolitres. At 4.3 million hectolitres in 2020, Brazil (+18.4% /2019) recorded the highest level of consumption since the year 2000, whilst in Chile, 1.8 million hectolitres of wine were drunk last year.
By contrast, Spain consumed 9.6 million hectolitres of wine in 2020, down 6.8% on 2019. Similarly, countries such as Portugal (4.6 million hectolitres, -0.6% /2019), Romania (3.8 million hectolitres, -1.9% /2019), Belgium (2.6 million hectolitres, -3.1% /2019), Sweden (2.2 million hectolitres, -2.3% /2019) and Hungary (1.9 million hectolitres, -10.2% /2019) saw their wine consumption decrease in 2020. South Africa (3.1 million hectolitres) recorded the lowest level of consumption in the last twenty years, with a 19.4% drop compared to 2019. The root cause of this was a local ban on alcohol sales – even online sales – for 14 weeks during lockdown.
The impact of Covid-19 on the wine industry: noteworthy trends
In 2020, worldwide exports of wine dropped by 1.7% on 2019 to 105.8 million hectolitres. The most noteworthy marker was in value terms with revenues falling by 6.7% on 2019 to €29.6bn. “High-end wine was the worst affected by the closure of restaurants and tasting rooms, while large producers with control over distribution through major wholesale partners were able to perform well”, said OIV.
Who are the winners and the losers?
Sparkling wines suffered the most, particularly Champagne due to its celebration-driven drinking occasions. The only category that weathered the storm was Prosecco. In terms of format, boxed wines witnessed a marked increase in sales. However, even though they continue to surge ahead, their total volume remains low.
What new opportunities have been thrown up?
Pau Roca, managing director of OIV, used the word “resilience” to describe the need for “wine producers to adapt to the diversification of markets and distribution channels and they will be compelled to do so looking forward”. The complete or partial closure of cafés, hotels and restaurants was partially offset by an increase in wine sales via e-commerce and super/hypermarkets.
Resilience implies adaptation, as it does for all of us, irrespective of our line of business or position. Pau Roca claimed that “only those who take on board the need to adapt their habits will be able to cope”. Newly available opportunities will need to be developed through diversification, starting with consumption. OIV’s objectives include working towards securing a more universal status for wine consumption.