February 4, 2022

Wine and spirits market at a glance

Spirits have weathered the storm and growth is expected across the bar, according to IWSR’s Vinexposium Report 2021

Alcoholic beverages have proven they are one of the most resilient consumer goods in times of crisis, with the past year being no exception.

A number of pre-Covid trends gathered pace during 2020, including modernisation, e-commerce, convenience, premiumisation and home-premise. Agave-based spirits bounced back, with growth being driven by the world’s largest Tequila market, the United States, where volumes increased 16%, compared to Mexico where they declined 17%. Gin also appears to be on the path to recovery, with Spain and ‘boom markets’ like Brazil, South Africa and Russia driving up demand. Whiskeys from Japan, India and the United States, are also expected to grow thanks to their ‘thirsty home markets’, while a return to on-trade and strong new arrivals will boost Irish whiskeys. For rum, growth is expected to come from low-cost markets like India and the Philippines, but also premium ones such as France and Spain, where it is increasingly seen as a cocktail ingredient or sipping spirit. Strong growth in core markets such as the United States and China will also drive Cognac and Armagnac sales upwards through to 2025. Last but not least, scotch growth is expected to come from the delayed recovery of the Indian market and a general whisky boom in Eastern Europe. Appetite for wine is equally on the rise in parts of South America like Brazil where cheaper domestic products are faring well against imports. In Colombia too, people are increasingly consuming wine at home, whereas before the pandemic it was largely reserved for restaurants and special occasions. The same is true in Singapore and the Philippines where a growing middle and upper class is increasingly buying fine wines, as well as in Russia where consumers are turning their backs on Vodka and other spirits. But in China, disruption caused by Covid-19 to social drinking occasions and large events has accelerated the decline in wine consumption seen over the past few years. In the UK, the longterm outlook is bright, but volumes will be adjusted down in the short term as the on-trade market recovers. Sparkling wines have seen growth in many parts of the world, with record annual volumes of Astri, Proseco and Cava in Russia, where its seasonal nature is slowly eroding. Thailand and Canada have also seen bubbles becoming increasingly popular, with growth expected to return as bars and restaurants welcome back customers. Russia’s champagne boom was a one off, largely driven by the Covid-19 lockdown and international travel restrictions, and growth is expected to slow as conditions return to normal. Finally, in Canada, growth is expected to flat-line as Champagne faces fierce competition from more reasonably priced sparkling wines.