Premiumisation still key, but perception of alcohol is changing, industry warned

Premiumisation is still a key trend for spirits, data from the IWSR and Wine Intelligence has found, as consumers continued to drink ‘less but better’ – but the drinks industry needs to address the shifting perception of wine in younger drinkers.

Vinexpo opened its inaugural show in Paris this week, alongside Wine Paris (picture shows Vinexpo Bordeaux)

Presenting the evidence at the joint Vinexpo Paris, Wine Paris conference this week, the organisations’ research found there was volumes growth across most spirits sub-categories in the standard and above brackets, but premium and super-premium growth expected to grow the fastest at 4.7% CAGR between 2018 and 2023, compared to 0.4% for standard-and-below spirits over the same period.

In contrast to spirits, while sparkling wine is expected to see growth in the standard segment, driven by the US, Italian and Russian markets, and the popularity of rose is likely to continue, particularly in the UK (up 50%), Canada (up 41%) and the US (up 36%) this growth is unlikely to make up for the overall decline of still wine.

Richard Halstead, COO of Wine Intelligence said rosé’ – which was previously considered to be almost exclusively a female drink – was being driven by women, younger people and men.

A forecast of global volume over the same five year period showed spirits (including local spirits such as Baiju) are likely to rise at a faster rate than wine, rising 0.6% compared to wine’s more modest total growth of 0.2% growth.

The conference heard that the overall perception of alcoholic beverages has changed, notably among young people, who it said were looking for better quality products and attach particular importance to a product’s environmental credentials – they want to drink “less but better”.

Brexit update

The inaugural Vinexpo conference also included an update on Brexit, which raised questions about the regulatory environment for cross-border customs, the likelihood of customs fees and the rules for labelling bottles.

“The objective, for all, is to succeed in building a privileged partnership between the United Kingdom and the European Union that permanently secures the environment for trade,” Vinexpo and Wine Paris’ organisers said.

Tax was also a key issue, with the potential of anywhere from €13.10 to €32 per hectolitre being applied on imports, which would directly affect the consumer, it said.