The global wine market was valued at US$ 296.3 Billion in 2016, according to Coherent Market Insights in a new report, Global Wine Market. The wine market is anticipated to exhibit a CAGR of 3.23% during the forecast period through 2025.
Still wine continued to dominate with over 83% of the market in 2016. The evolving consumer lifestyle along with the health benefits, such as lowering the risk of heart disease and type 2 diabetes, is a major driving factor in the market, the report says. The growing preference for wine has further boosted the demand for sparkling and fortified wine whereby sparkling wine expected to witness the fastest CAGR growth of around 5% till 2025. In terms of color, red and white wine holds majorly of the market with both contributing over 90% of the market in 2016.
Asia Pacific is pegged to be the fastest growing market for wine owing to increasing middle income population, rising disposable income and evolving lifestyle pattern in the region. Countries such as China and India stand to be the fastest growing markets in the Asia Pacific region as imports continue to rise from Europe and Americas, whereas Japan has witnessed slowdown in sales due the maturity of the market.
Baby boomers remains the major consumers of wine and although the market for millennials is small, there is rising demand for wine amongst them. This age group is willing to try new things and are looking for substitute for beer and spirits which is further enhancing the growth of the market, the study says.
Additionally, the focus on healthy lifestyle by the baby boom generation has further resulted in growing demand for organic wine. The process of growing grapes without the use of harmful chemicals such as herbicides and fungicides offers better health benefits and has resulted in creating a niche market for organic wine manufacturers.
In terms of pricing, the mid-range segment stands to be the most preferred option among the consumers with many shifting from the economic price range. The premium segment is mostly catered by the high income urban customers with countries such as the US and China being the leading countries in this segment.
Rise in government tax is also play an important factor in the growth of wine market. For instance, the proposal to change the tax structure of alcohol based drinks in Australia will impact the pricing of wine as price of cheaper wine will increase with the new tax structure. Additionally, a new excise tax set by the government of Thailand and Russia in 2017 will increase the price of imported wine which will impact the sale of wine in these countries. Owing to the ongoing increase in price of wine post Brexit, the price of wine is further expected to rise in UK owing to 3.9% rise in alcohol duty in 2017.
Product innovation stands to be one of the major factor driving the growth of the market. For instance, a new botanic garden wine label was launched in 2016 in partnership with Botanic Gardens of South Australia, National Wine Centre, and Jacob’s Creek winemakers. Additionally, wine infused with marijuana is also being sold in the US market to offer new varieties and flavors to customers.
Leading retail chains such as Tesco and Walmart offer their own range of wine catering to its customer groups and offering stiff competition to the branded wine companies, as are some full-service restaurants. Consumers are increasingly opting for these brands as they are priced much lower than branded wine, the report says.