Sign Up

Global trends in export markets

Market Bulletin | Issue 267
28 Jun 2022
Previous  | Next   News

The Australian wine and grape sector is heavily reliant on export markets as around 60 per cent of our production is exported annually, the remaining 40 per cent is sold in the domestic market. Currently, there are 1200 companies exporting to 112 destinations around the world. Thus it is crucial to consider the broader global trends influencing wine markets now and into the future. 

Current operating environment

Before looking at some of the broader trends influencing wine markets around the world, it is critical to acknowledge the unprecedentedly difficult operating environment that has impacted – and continues to impact – trade and profitability across the sector over the past two and a half years. It has been described as a “perfect storm”, but it is far from a perfect environment in which to trade – especially in export markets. And prior to this perfect storm arriving, many key markets were already faced pressures in a long-term decline in the number of wine consumers.

The loss of Australia’s wine trade to mainland China has been dramatic, and this came on top of bushfires and the sudden arrival of the COVID-19 pandemic. The pandemic has obviously had an enormous impact on the world since 2020. In a relatively short period of time, it has altered the way many people think, feel and process their world. It has affected businesses in many ways, from closures to booming sales. 

Specific to wine, travel restrictions have changed how we do business in export markets with less  face-to-face activities and physical presence in-market. Widespread shutdowns of the on-trade and lockdowns have seen a shift in wine purchases from the on-trade to the off-trade, with the already growing online and direct-to-consumer sales channels significantly increasing in usage. While the on-trade has gradually opened in many markets, recovery has been hindered by labour shortages. 

Image credit: AdobeStock

Even as global demand returns, getting product into market continues to be hampered by the on-going chaos in global shipping, with significant delays and increased shipping costs. The combination of a fundamental shortage of container ships and sudden and strong rebound in global demand and compounded by COVID-19-related labour shortages, industrial action and other factors have led to port congestion, schedule delays and increased costs that escalated in 2021 and have yet to be resolved. This is particularly problematic for Australian exporters, given our biggest export destinations are on the other side of the world. However, it is also means that there are difficulties in getting imported wines into Australia, opening up short-term opportunities for Australian wines in the domestic market.

In the midst of the pandemic and the loss of the China market, Australia then delivered a record level of wine production in 2021, which combined with a reduction in overall sales volume, saw inventory levels and stocks-to-sales ratios increase to beyond ideal levels. The increased stock levels placed significant pressure on tank capacity for some wineries leading into the 2022 vintage and downward pressure on grape and wine prices, especially for reds. White wine prices have generally held up, assisted by lower production levels in Europe and New Zealand. 

The operating environment worsened further in 2022. Inflation has hit its highest level in decades in many countries, with the conflict in eastern Europe pushing up energy and food prices and squeezing households’ real incomes. Price pressures — and economic growth downgrades — have increased, triggered by the conflict.

Some economists fear a return to the chronic inflation and recessionary environment of the 1970s. Rising inflation has also resulted in a rise in interest rates. The impact is two-fold. Firstly, the rise in the cost of living leads to less disposable income to spend on luxury goods such as wine. And secondly, inflation leads to an increase in the cost of grower and winery inputs, which may or may not be able to be passed on to the consumer, adding further pressure to an already difficult operating environment.

While the current operating environment is challenging, the disruptions can also drive and accelerate change and create new opportunities for the wine sector. There are also a number of trends outside the broader operating environment that are influencing wine markets. Some are global, others more market specific. 

This Bulletin will examine four trends.

Sales by price segment

Over the past five years, the global volume of wine sales has fallen by 1 per cent per annum. The volume of wine consumed globally fell a further 1 per cent to 2.53 billion cases in 2021. The decline was entirely in still wine (down 2 per cent in 2021), while sparkling wine reported a strong recovery of 9 per cent growth to a record 284 million cases after a sharp decline in 2020. 

In contrast to volume, the total value of global wine consumption increased by 5 per cent in 2021 to US$205 billion. This was driven by the volume growth in premium wine sales (US$10 per bottle and above), which grew by 5 per cent. The commercial end of the market (below US$10 per bottle) declined by 2 per cent in volume but still accounts for the vast majority of still wine sales with an 86 per cent share. Premium wine now has a 14 per cent volume share of global wine consumption, compared to 12 per cent in 2016.

The IWSR has forecast for growth to continue in premium and above sales, at an average rate of 2 per cent per annum out to 2026. In comparison, it has forecast commercial/value sales to be relatively flat.

The general consensus is that younger drinkers are the key drivers of premiumisation. For example, research in the UK shows that 54 per cent of 18–34-year-olds are likely to choose a premium drink versus just 35 per cent of those over 55. Millennials are known for their greater desire for authentic, high-quality and ethical products, and as their spending power continues to grow, so will their influence in the drinks market.

As mentioned earlier, inflation is at decade highs in many markets around the world. For example, in the USA, the inflation rate is at 8.5 per cent – a 40-year high. While recent reports suggest that prices in the UK could rise by 15 per cent over the coming months. The likely impact on wine sales will depend on the individual consumer, such as their income level, wine engagement and brand loyalty. Some may cease buying wine, some may trade down, and others may stay loyal to their favourite brands but possibly buy less. The most likely outcome in the short term is that price rises will be absorbed by inflation.

Health and wellness

The concept of health and wellness has been around for a long-time. However, the pandemic has heightened its awareness and importance among consumers. Research from McKinsey shows that consumers care deeply about wellness their interest is growing. In a survey of roughly 7,500 consumers in six countries, 79 per cent of the respondents said they believe that wellness is important, and 42 per cent consider it a top priority. In fact, consumers in every market they researched reported a substantial increase in the prioritisation of wellness over the past two to three years. Wider trends in the food and beverage industry are seeing more consumers prioritise health when buying products. The alcoholic beverages industry is no different – and this trend is opening up opportunities for no- and low-alcohol (NOLO) wine in particular. Attitudes towards non-consumption of alcohol are becoming much more positive and accepting, as evidenced by the numerous ‘dry month’-type initiatives, ‘mindful drinking’ and the #sobercurious movement.

As a result, in many markets around the world, consumers are moderating their alcohol consumption, including wine. According to Wine Intelligence, 48 per cent of wine drinkers globally claim to be reducing their alcohol intake in some way, with 1 in 4 saying they are switching to lower alcohol options. This is a particularly strong sentiment among younger consumers. There has also been a long-term decline in both the total number of regular wine drinkers as well as the share of the legal drinking population that drinks wine regularly. 

Moderating alcohol consumption can mean either not having an alcoholic drink at all or choosing a no-alcohol or low-alcohol version of an alcoholic drink. Wine Intelligence found that 22 per cent of regular wine drinkers were doing so by not drinking alcohol on some occasions, while the proportions choosing no-alcohol or low-alcohol alternative products were 14 per cent and 13 per cent respectively.

While the market for no- and low-alcohol wines is currently relatively small – representing 1 per cent of global still wine sales – the value of NOLO sales has been growing at 30 per cent per annum over the past five years and the IWSR has forecast growth of 14 per cent per annum over the next five years to reach $3 billion by 2026. This compares to a forecast growth rate of 1 per cent per annum for the value of all still wine sales. As a result, it is forecast that the global share of NOLO wines will double to 2 per cent. 

While no- and low-alcohol products are often combined as a single category, there are some significant differences between the two that should be considered when evaluating the opportunity for a particular product. 

Globally, according to IWSR low-alcohol wine accounted for three-quarters of the NOLO category in 2021 and had double the value growth of the no-alcohol segment. This is driven by the USA which dominates the low-alcohol category.

This highlights that there are significant differences by market. The USA is by far the biggest market for NOLO wines according to IWSR, but low-alcohol wine takes a much larger market share (91 per cent) than no-alcohol, largely because of the strength of the health and wellness trend in the USA. However, in most other markets globally, no-alcohol wines are seen as higher in quality and better value. In the UK, for example, lower duty costs give no-alcohol wine a competitive advantage and thus 70 per cent are no-alcohol wines.

Another important difference, according to IWSR, is in the underlying motivators for consumption. No-alcohol products are a clear choice for those trying to have an ‘alcohol-free night’, or who are required to have zero alcohol in their systems due to driving, health or work requirements. They are also a suitable option for people who never consume any alcohol.

Low-alcohol products can also satisfy a consumer requirement to moderate their alcohol consumption, but these products are more often aligned with general health and wellness trends like reduced calories, reduced sugar etc. than specifically with alcohol moderation. 

In many markets, younger consumers are generally drinking less wine and gravitating towards lower alcohol RTDs and spirits while older consumers who are heavier drinkers of wine are moderating their alcohol intake.

The challenge for Australian wine producers is to make a no or low alcohol wine that consumers will embrace. According to Wine Intelligence, the key motivators for purchasing no- or low-alcohol options are ‘it’s better for my health’, ‘I enjoy the taste’ and ‘I like to stay in control’, while conversely, the top three barriers are ‘not enough alcohol’, ‘not really wine’ and ‘I dislike the taste’. Product innovation will be crucial as well as work in persuading consumers that switching to no- or low-alcohol wines won’t compromise their enjoyment.  


Like all areas of retail, wine saw a significant shift to online purchasing during the initial wave of the COVID-19 pandemic. This trend is forecast to continue over the next few years. Statista forecasts that revenue from online sales of alcoholic drinks will grow at an average annual rate of 7.5 per cent between 2022 and 2025 to reach more than US$123 billion. Wine makes up about 15 per cent of total online alcohol sales value globally and is expected to have a slightly higher average annual growth rate of 8.3 per cent.

Another positive trend in e-commerce is the increase in the number of users expected over the next three years, which is even higher than the value growth at an average annual rate of 11 per cent over the same time period. Wine has the highest number of users of any alcohol segment and the highest percentage of the total population that purchases the product online.

Research from Wine Intelligence has found that regular wine drinkers across 10 out of 11 countries studied, reported spending more on a bottle of wine on average online than in a retail outlet. Only in Hong Kong was the average reported spend per bottle higher in a retail store than online.

Online wine shoppers are more likely to be younger, higher income and urban and be more frequent wine drinkers. They are also likely to spend more. Strategically these are the most desirable consumers that wine producers can target in the current trading environment.

There is also a significant untapped potential online wine consumer base in most markets. For example, a third of regular wine drinkers in the US, Canada and Brazil say they are open to online purchases in the future but do not currently participate in the channel. China is the only market that appears to be reaching full penetration. 

Image credit: Drobot Dean

The market is developing into two separate spheres: impulse purchases for immediate consumption, led by apps, where speed matters more and cost matters less – young consumers are more likely to use apps; and ‘traditional’ web browser e-commerce, which is driven by offers and perceived range. ISWR reports that the growth in wine purchase via Apps is trending at or ahead of growth of traditional web browser wine purchasing.

Although the increase in e-commerce is expected to persist post-pandemic, there will be less ‘low hanging fruit’ available in terms of migration to online spending, now that social mobility is returning to normal levels, and that realising further growth will require a lift in investment in providing a better customer experience. This is particularly important, because the growth in e-commerce is largely coming at the expense of other channels. According to IWSR, the value of wine sales globally is only expected to increase by an average of 1 per cent per year between now and 2026, while volume is expected to remain virtually static. This means that understanding the e-commerce channel and being able to maximise the opportunities it presents is important for wine businesses, in order to counteract likely declines in other channels.


The global operating environment for our sector is on the cusp of considerable change and there is a strong desire to incorporate a greater scientific evidence base to demonstrate our sustainability credentials globally. The rapidly changing international landscape means there is a significant market access risk over the medium- to long-term if the sector does not act. 

From the perspective of the sector, embracing sustainable practices helps create a purposeful brand story. One that is known for making exceptional wine that supports a greater good. Sustainable practices help nurture the land and pass it on in a better condition, creating value and security for generations to come.

In addition, retailers and distributors are increasingly demanding compliance with sustainability policies, and this has impacted on how wine is shipped to export markets. For example, 85 per cent of wine exported to the United Kingdom is in bulk and packaged in market, partially due to cost savings but also in an effort to reduce the carbon footprint of transporting wine from Australia to the UK.

Consumers are also increasingly motivated by sustainability in their purchase habits. Research from Wine Intelligence shows that across five major wine markets – US, UK, Canada, Sweden and Australia – more than half of regular wine drinkers are motivated by sustainability. They are more likely to be younger, higher-income and more engaged with alternative wines. 

This is supported by some recent research conducted by Wine Opinions that showed that in the US, 28 per cent of wine drinkers aged in their 20s cited sustainable practices as being “very important” in their wine purchase decisions, compared to 23 per cent of those in their 30s, 12 per cent in their 40s and 8 per cent of the over 50s. 

Sustainability is a multi-faceted area. At the production level, there is demonstrating sustainability credentials in the vineyard and winery and production practices. This is driven by growers and producers as well as retailers and distributors. And then there is product innovation in response to consumer demand. Firstly, there is a move toward more sustainable packaging types such as lighter glass bottles, bag-in-box and PET bottles. Research shows there is increasing awareness and acceptance of alternative packaging types among consumers, although some markets are more advanced than others. For example, in Sweden, 64 per cent of wine drinkers are aware of PET bottles and just over a quarter of them say they purchase wine in PET bottles. Swedish consumers are relatively more environmentally conscious than in other markets and have a positive view on environmentally friendly packaging. Innovation in packaging is an example of where the shipping crisis may lead to an acceleration in adoption of lighter-weight packaging to save costs as well as the environmental benefits.

There is also innovation in the development of alternative wine styles such as natural wines, preservative free wines, organic wines, and biodynamic wines.

Wine Intelligence reports that while less than one in five regular wine drinkers are engaged in the sustainable and alternative wine category, there is a rising tide of positive sentiment about alternative wines. 

Wine Australia tracks the exports of biodynamic and organic wines, and the data shows while it is a very small category (less than 1 per cent of total exports), it is growing, from $3 million in 2012 to $16 million today. The number of Australian businesses exporting biodynamic and organic wines has also grown, from 41 to 54 over the same period.

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

Levy payers/exporters
Non-levy payers/exporters
Find out more

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