Amidst changing consumer preferences globally, mid-strength wine is presenting a growth opportunity for Australian wine businesses.
With funding from the Department of Agriculture, Fisheries and Forestry through the Grape and Wine Sector Long-term Viability Support Package, Wine Australia commissioned Nielsen IQ (NIQ) to conduct a rigorous project to identify the most promising consumer segments and category proposition ideas to build and scale the market for lighter-style wine across Australia, USA, UK, and China.
The project highlighted that consumers are changing how they drink alcohol – not what they want from it. Across all alcohol, moderation is now mainstream behaviour. However, this study has shown that consumers see moderation as managing consumption not a lowering of product expectations. Consumers still want alcohol, flavour and drinks to suit occasions, but the behavioural lens has shifted.
NIQ identified 13 demand spaces where mid-strength wine meets consumer needs for moderation-friendly, flavour-forward options suitable for social, everyday and personal occasions.
This week’s Market Bulletin provides an overview of the project ahead of a webinar exclusively for Australian wine industry members on 21 May.
Changing preferences present a one billion dollar per year opportunity
The global alcoholic drinks market, including wine, has been in a downward trend over the past decade. Wine consumption has declined at a much faster rate than other alcoholic drinks in recent years. Per capita wine consumption is now a quarter less than it was 20 years ago.
While cost-of-living pressures are having an impact, one of the major trends influencing wine consumption is the rise of mindful drinking. Increasing numbers of consumers are choosing to reduce or eliminate their alcohol and wine intake. As a result, there is a growing demand for wines that allow them to enjoy the experience of drinking wine while moderating their alcohol intake.
Drinking occasions and beverage choices are also changing. Wine has become less of an everyday drink and more of an occasion-based drink. This is impacting both consumption at home and in on-premise venues. In line with broader beverage trends, consumption and consumer preferences, especially among the young demographics, are shifting with more people opting for lighter and more refreshing wine options.
The mindful drinking trend has seen growth in the consumption of no and low alcohol wines (NOLO) and is one of the few wine categories to record solid growth in recent years.
Preliminary research conducted by KPMG in 2024 that was commissioned by Wine Australia suggested that a significant and growing opportunity may be in mid-strength wine with an ABV of between 7 to 9 per cent, rather than at the very low alcohol end of the spectrum. The KPMG modelling quantified the size of this mid-strength opportunity for Australian wine across 10 markets at almost one billion dollars per annum over a 10-year horizon.
While this only reflects an initial view and will depend on investment, product, and strategy; exploring innovation and new approaches may present opportunities for Australian wine alongside traditional models.
This initial research provided some clarity on the mid-strength opportunity, but more in-depth consumer research was required to define the mid-strength proposition for Australian wine.
Building the mid-strength proposition
Wine Australia engaged NIQ to understand whether mid-strength wine could be a real opportunity for the sector and specifically where the category propositions for consumers are. Using a comprehensive mixed-method research program of data analysis and in-depth customer research, NIQ found strong consumer appeal and clear commercial potential in Australia and key global markets.
The multi-layered approach ensured an accurate understanding of the category’s potential size and guided how the opportunity could be brought to life for the Australian wine sector and its future global footprint.
The goal was to identify consumer drivers and barriers, consumption occasions, the strongest market opportunities and recommended value propositions for the mid-strength wine category.
The consumer-led opportunity for mid-strength wine
The NIQ research has shown that consumers increasingly want wines that fit a lighter, more moderate lifestyle and mid-strength wine can meet these unmet needs across key markets.
NIQ carried out an extensive segmentation exercise from the ground up, to gain a deep understanding of the potential consumers and their needs across the key markets of Australia, USA, UK and China – to define the growth landscape and the demand spaces.
Across the four markets, they identified 13 clear demand spaces where a mid-strength wine offering would be relevant, spanning ‘social’, ‘every day’, and ‘me-time’ occasions. The 13 demand spaces show strong consumer desire for moderation-friendly, flavour-forward options that still feel social, enjoyable and familiar.
Several of these demand spaces across the four markets show commercially attractive scale, confirming that a mid-strength category has credible, multi-market viability.
These insights demonstrated the commercial potential of the category and also clarified who the core target audiences are, giving a clear sense of when and who this new proposition will speak to and where the greatest growth lies.
Matching moderation with expectation
The NIQ research showed that consumers are changing how they drink alcohol – not what they want from it.
Moderation is now a mainstream behaviour across all alcohol, but it is not about abstinence or sacrificing enjoyment. People still want alcohol, flavour, and drinks that suit the occasion. What’s changed is the behavioural lens: pacing, lighter moments, fewer drinks per occasion, and more deliberate choices that allow people to stay present and in control.
Moderation today is about managing consumption – not lowering expectations.
Even as they moderate, drinkers are clear on what still matters:
- drinks must still taste good
- they must still feel like a proper alcoholic choice
- they must still work socially and with food, and
- enjoyment remains the priority – not health optimisation
Anything that feels like a downgrade is rejected by consumers. This creates space, not loss, across alcohol categories.
People are not asking alcohol to be less enjoyable – they want options that are lighter in impact, easier to live with and better suited to everyday life, without giving anything up. This sets the context for new propositions – including wine – to meet people where they already are.
Immersive qualitative focus groups with Australian consumers who are representative of the three key demand spaces provided a deeper understanding of the occasions, unmet needs, and tensions shaping these moments. This exploration enabled NIQ to uncover a set of value propositions that directly responded to how Australians want to drink wine today.
These value propositions were then pressure-tested and brought to life through a collaborative workshop in late January with wine brand representatives from across the Australian wine industry. By combining consumer-led insight with deep industry expertise, we collectively shaped and refined the most compelling opportunities and category propositions.
The detailed research reports and summary of the major outcomes and takeaways are available exclusively for Australian wine levy-payers to analyse and dissect. Log in with your Wine Australia account linked to your Exporter ID or ABN.
On 21 May, Wine Australia will host a webinar for Australian wine stakeholders to discuss the research outcomes as well as the category’s technological innovations and regulatory issues to consider. Register here.