I thought the theme for this year’s Nedbank Vinpro Information Day for the SA wine industry, quite apt: Revive, Recover. Rebuild. These three words apply to many other industries and businesses, but for SA Wine, especially, they are spot on. I love how they focus on action. But action should be guided by intelligence. How did the pandemic influence consumer behaviour? Do we know who drinks our wine? What are their preferences? Where do they buy? What are they willing to pay? What are their brand expectations?
I believe that the ball is always in your court. Yes, you are not always in control of the environment or conditions, but waiting for them to change or improve is also not the solution. Making new plans is important, but then you have to consider your altered reality. And that is why I love trends. Knowledge of trends are intelligence that empower you to make wise decisions. They stimulate creativity and help you come up with new ideas and products. The trend report by trend fundis Wine Intelligence is then also one of my annual highlights at the Vinpro Day and this year was no exception.
Like most other things, wine consumer trends are also strongly influenced by the pandemic. Wine Intelligence’s CEO Lulie Halstead shared the main trends to keep in mind when making production and marketing plans in the wine world.
Today’s consumer looks different. While brands always hope to attract a younger audience, wine is not that popular under younger generations. The good news is, however, that youngsters who do prefer wine, are more involved and really into the wine lifestyle and its associations. They are more engaged. The older, loyal wine drinkers are also of much worth to the industry. Population ageing is a global trend and our older wine drinkers are sure to be with us for some time to come. The other positive here is that the older wine drinkers are less worried about moderation and not that interested in substituting wine for other options.
Consumption has also changed due to the pandemic. With restaurants and bars closed, we were forced to enjoy our wines at home. In fact, wine consumption under regular wine drinkers have actually increased slightly since 2019. Who didn’t feel like they deserved a treat for being in lockdown in such strange circumstances?! While South Africans had to comply with liquor bans, global wine drinkers had the opportunity to buy wine from their supermarkets or online and in the process, explored more expensive options. South Africans followed the trend when we were allowed to stock up again. While customisation and premiumisation are nothing new to the wine trend world, the pandemic and the more sophisticated drinking habits at home, have definitely resulted in a better performance for the premium wine market. In fact, growth is exclusive to this price category. More home consumption has also resulted in wine being enjoyed more regularly as an aperitif and not necessarily with food.
Another trend that got a serious pandemic push, is e-commerce – especially in countries where online wine sales were not yet that popular. When shops didn’t feel safe, even those hesitant about the internet, had to explore online options and are now familiar and loyal online shoppers. Although the growth in online wine buying has stabilised after lockdown, it is not showing any signs of going back to its limited pre-pandemic status. Instant delivery apps have been the strongest performer in the e-commerce category despite their higher prices and smaller selection.
Supporting locally was another consumer trend during the pandemic. We were all concerned about the small and local producers in our own communities and wanted to support them. I love the local sentiment and of course it is such a positive when it comes to selling wine locally, but what about our important export markets? If local support is a global trend, what does that hold for the wines we export? According to the wine intelligence report, export products can recreate the local sentiment by being authentic and trustworthy, by building messages and sharing brand stories.
Although we are all more aware of wellness, dare I say, post-pandemic, low and no alcohol drinks have been a trend for the past few years. This behaviour is driven by the focus on wellness and moderation and substituting wine for other lower or no alcohol drinks. Rather than abstaining, consumers, especially younger ones, downscale their consumption. Blending your drinks of choice (switching between alcoholic and non-alcoholic) is popular among younger generations. The challenge for wine is that low and no alcohol wine is less popular than the same category for beer or ready to drink (RTD) products. The perception for low and no alcohol wine is quite poor as consumers feel quality and taste are compromised, while RTD’s and beer perform very well in this category.
Considering these consumer trends, what are the opportunities for SA wine?
- Perhaps we have to reconsider the style of wine – not everything has to be a serious partner to food. There might be room for more lighter and easy-drinking wines. Less serious does not necessarily mean cheaper considering the trend for premium wine, but there is a definite demand for aperitif style wines as well as drinks with lower or no alcohol.
- Perhaps we should learn from the popularity of RTD’s and beer – especially when it comes to low and no alcohol and packaging in cans. In a certain category, drinks are more popular when they are carbonated and cold. Perhaps this is a market to explore with sparkling wines, whites and rosé.
- And talking about cans, perhaps we have to rethink packaging in general – more regular wine drinking that are not occasion or food related, might demand smaller containers. And what is the trend when it comes to carbon footprint and lighter glass? According to Halstead, this demand is driven by retailers who are conscious of sustainability. According to her, consumers already regard wine as a natural and sustainable product.
- While finding new market segments will always be important, don’t forget about our regular customers – even if they are older. They have pulled us through the pandemic and they stay utterly important.
- Highly engaged younger consumers are important when thinking about your online and social media presence – especially because these are your channels for direct e-commerce referral.
- Even though instant delivery apps sell smaller quantities, they offer a unique marketing opportunity and can be a wonderful tool for creating brand awareness.
- I believe everyone now offers their wine for sale online, but make it easy for consumers – they have a wide choice. Have a friendly and secure shopping site. Be fair with delivery fees. Be exceptional with customer service. Not seeing the customer in front of you and not talking in person, requires even more attention and professionalism.
This gives us plenty to think about. There’s no need to fly blind. Vinpro is committed to consumer intelligence and there is plenty of research available to guide you in decision making. Let’s not wait for better days. Let’s get informed, take what we have and make the best of it.