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Global consumer trends in the short term

Market Bulletin | Issue 207
23 Jun 2020
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The COVID-19 pandemic has changed consumer purchase behaviour – including the purchasing of wine. But how long are these changes expected to last?

Alcohol sales in general have declined since countries went into lockdown, but there are signs of recovery with IRI reporting positive growth in their collected point of sales data for the 4 weeks ending 17 May 2020 compared to a year ago across several markets including the United States of America (USA) and the United Kingdom (UK).

Certainly, the IWSR do not expect the global beverage alcohol market to fully recover until 2024, noting that the key difference between the Global Financial Crisis in 2008 is that there was a relatively quick recovery (a J-curve) as opposed to gradual recovery likened to a ‘Nike swoosh’. This pattern is said to be reflective of a longer lasting impact to the global alcoholic beverage sector due to the impact to the on-premise and global travel retail.

Figure 1: Global wine consumption

Source: The IWSR

A number of consumer research companies including Kantar and Wine Intelligence reported in June that, to an extent, consumers will not return to pre-pandemic behaviour in the short term due to persistent safety concerns as countries balance the transition to reopening businesses and preventing further outbreaks along with financial pressures. But while a number of changes have been observed in regard to consumer behaviour during the height of the lockdown, there are some ‘sticky’ behaviours to take into consideration over the next 6–12 months.

Going online to shop

One of the more obvious changes to consumer behaviour expected to remain is the continued use of e-commerce channels and online delivery platforms. This topic was recently discussed in our Market Bulletin ‘How the pandemic has boosted digital retail’. Kantar noted from their COVID-19 barometer that e-commerce continues to grow, citing that 40 per cent (vs 33 per cent in wave 3) of consumers now say they have increased or significantly increased their online purchasing. GlobalData report an even higher proportion from their Recovery Consumer Survey conducted from 10–14 June 2020, in which 53 per cent of respondents intend to shop for groceries online in the foreseeable future. Wine Intelligence’s recent survey shows that this is mixed across the markets with China, already accustomed to shopping online, having the greatest percentage of regular wine consumer more likely to purchase beverages and groceries online after the restrictions have eased. In the USA, 30 per cent are more likely but only 9 per cent have bought wine online in the past 6 months.

Figure 2: Percentage who are more or less likely to shop online for beverages and groceries when the danger of COVID-19 has passed and normal activities are permitted

Source: Wine Intelligence

Price sensitivity and reduced spending

The IWSR and Wine Intelligence both consider price sensitivity and reduced spending will continue over the coming 12 months.

When comparing still wine consumption between 2008 and 2009, the IWSR data shows that while low-priced wines declined, standard/value priced wine grew and premium and above priced wines remained steady. The IWSR expects that despite the overall drop in still wine consumption predicted in 2020 across all price bands, consumers will continue to gravitate to value products, but will still look to treat themselves with luxury items.

Figure 3: Global consumption of still wine by price bands

Source: The IWSR

Survey results from Wine Intelligence’s COVID-19 report series confirm this with consistent findings across several markets indicating that regular wine consumers are going to try to spend less and save more over the coming 12 months. Despite this, their data suggests consumers will continue to purchase goods that provide comfort and luxuries such as wine whilst putting off larger expensive purchases such as a holiday.

Health and hygiene

Prior to the pandemic, the health and wellness trend was gaining momentum as discussed in our market bulletin ’demand for low and no alcohol beverages expected to continue to grow’. Further to the increase in low/no alcohol options as shoppers look for healthy alternatives, Nielsen indicated in their ‘Life beyond COVID-19’ article that, in the fast-moving consumer goods space, health and hygiene are more desirable which includes the security of the packaging. Results from GlobalData Recovery Consumer Survey shows that 21 per cent of respondents put secure packaging as their top priority as a result of the pandemic, ahead of natural ingredients and recyclable packaging. Although these are still all important to consumers.

Figure 4:  The importance of specific aspects as a result of COVID-19

Source: GlobalData

Staying at home

People have started to like their lockdown habits according to Kantar, with many wanting to maintain healthier eating, spending time with family and personal development. Results from GlobalData’s first week of their Recovery Consumer Survey supports this with 62 per cent of respondents indicating that they will continue to cook more meals at home after the pandemic period along with 51 per cent who said they will dine at home instead of restaurants. This result suggests that despite official lockdown rules being relaxed, consumers globally have differing levels of comfort when it comes to returning to on-premise. These results were relatively consistent between gender and age groups.

Figure 5: Consumer behaviours after COVID-19

Source: GlobalData

Wine Intelligence report that around a quarter to a third of regular wine consumers are very resistant to returning to the on-premise. While around half of the population are expecting to return to their normal pattern after the pandemic period ends.

This content is restricted to wine exporters and levy-payers. Some reports are available for purchase to non-levy payers/exporters.

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This content is restricted to wine exporters and levy-payers. Some reports are available for purchase to non-levy payers/exporters.