In 2018, 13 per cent of the volume and 36 per cent of the value of wine consumed around the globe was premium wine (defined as US$10 per bottle and above), according to International Wine and Spirits Record (IWSR) data accessible via Wine Australia’s Market Explorer. The share of value has grown from 33 per cent in 2013, indicating a growing trend towards premiumisation.
Consumers in established markets are consuming less frequently, but pay more per bottle
The Global Compass 2019 report published by Wine Intelligence shows that in more established markets, consumers continue to pay more per bottle while consuming less frequently, moving from quantity to quality. They suggest that a combination of increasing concerns about health, the growing variety of higher priced products available on the market, and alternative forms of packaging where consumers can now purchase premium wine in smaller formats are driving the trend.
Euromonitor International’s Top 10 Global Consumer Trends 2019 report indicates that consumers are searching for authentic, differentiated products and experiences that allow them to express their individuality. Consumers in developed economies are re-evaluating their spending habits, moving away from overt materialism to simplicity, authenticity and individuality.
As emerging economies develop further, the same pattern is likely to emerge, with consumers tiring of generic products and starting to place more value on higher quality, unique and differentiated offerings, which convey a certain level of status.
USA – the world’s largest premium wine market
Interrogating the Market Explorer shows that the United States of America (USA) is by far the biggest premium wine market with 89 million cases of premium wine consumed at a value of US$17.6 billion in 2018. The volume of premium wine consumed in the USA grew at a compound average rate of 7 per cent per annum over the 5 years to 2018.
It is forecast by the IWSR that by 2023 the USA market will need an extra 23 million cases of premium wine (US$10 per bottle and above) to meet demand in this segment, with sales forecast to grow to 112 million cases.
Australia currently holds a 2 per cent volume share of the premium wine segment in the USA and thus there is a large opportunity to grow the share of this market segment in the next five years. Wine Australia provided an update on the USA market at the Australian Wine Industry Technical Conference.
Markets with Australia’s highest share of the premium wine segment
For markets in excess of US$100 million, Australia’s highest share of the premium wine segment was greatest in:
- Malaysia (28.6 per cent)
- mainland China (27 per cent)
- Singapore (24.3 per cent)
- Thailand (20.3 per cent), and
- Philippines (19.2 per cent).
For the world’s ten biggest wine markets by value, eight recorded growth in the premium wine segment over the past five years (see table 1 below), the two exceptions were France and Germany.
Table 1: Growth rate the in premium wine segment for the top ten wine markets by value
| ||5 year CAGR |
|USA ||6.8% |
|France ||-0.5% |
|UK ||4.0% |
|Italy ||3.9% |
|China ||8.5% |
|Germany ||-0.3% |
|Russia ||6.5% |
|Canada ||3.3% |
|Australia ||3.7% |
|Spain ||7.0% |
The Market Explorer has been used extensively in Wine Australia’s Growing Wine Exports workshops. These workshops are practical, wine-specific and hands-on skills development for new and experienced wine businesses looking to grow their exports or give their strategy a health-check. Register here for a workshop near you.
Wine Australia has developed the Market Explorer tool as part of the wine export capability development component of the Australian Government’s $50 million Export and Regional Wine Support Package.