Online wine sales are increasing due to coronavirus

With billions of people now under some form of lockdown due to the Covid-19 pandemic sweeping the world, there have been major changes in the way people are shopping.

Bars, restaurants and cafes are all shut down in the UK, in much of Europe and across some of North America among other regions. With everyone housebound, wine aficionados have had to find new ways to ensure they have enough in. And naturally this has meant a huge uptick in online wine sales.

Online wine sales are rapidly increasing

The wine industry is going through a patch of sales that is rivalling, if not beating, the Christmas rush. For example, US based wine club Winc told Forbes that it has seen an increase of 578% in new members week over week. Sales are also rising fast, with a 49.6% increase in consumer direct sales.

According to Nielsen, wine sales in the US were up by 27.6% in the week ending 14 March 2020, compared with the same week in 2019. Wine app Vivino is also showing massive increases, with its highest recorded sales date on 13 March 2020. In both the US (162%) and Italy (282%), the app has seen a huge increase of merchandise sold.

Now that the majority of people are working form home and having to enforce strict social distancing measures, home consumption of wine will continue to rise. And alongside this will be a wider take up of ecommerce for the wine sector. While wine sales online have always been relatively popular, they’ve lagged behind sales in pubs, bars and restaurants. As this is temporarily halted, we will continue to see the ecommerce sector for wine sales expand.

Some sellers are struggling to keep up with demand

Other smaller wine companies in America have also witnessed sales take off rapidly. Gold Medal is an independent wine club that curates limited production wines from California. Owner David Chesterfield explained to Forbes that the company has seen an increase in revenue of $517,800 in 28 days when compared with the previous 28 days. This is more than a 200% increase.  Some small wine shops are hastily moving online for the first time, in order to keep employees paid and businesses going.

Here in the UK, the situation is much the same. Since 21 March, when the bars, restaurants and clubs were formally closed by the government as part of the nation’s efforts to slow the spread of coronavirus, sales of wine and other alcoholic drinks continue to climb.

Some online wine sellers have had to temporarily pause orders in order to keep on top of restocking. Naked Wines told the Times that: “… we’ve made the decision to temporarily pause accepting orders while we work through existing ones.” Sales for French and Italian wines for the company jumped to 68% last week, and English wine sales are also increasing.

It remains to be seen how online retailers will cope with the surge in demand, and how much of these sales increases are down to stockpiling. Pubs are beginning to sell alcohol as takeout as part of creative ways to keep in business, and this could bring online sales down again.

However, at Ideal Wine Company, we believe this could be a turning point for wine and ecommerce. As people become used to buying wine online during the pandemic, it’s highly likely that this will continue when restaurants and pubs begin to open their doors again.

German ice wine scuppered by warm winter

For the first time in many years, German ice wine isn’t being produced. A warmer than average winter means that temperatures failed to drop low enough in German vineyards to make the ice wine. And with climate change affecting the wine industry all around the world, this could be a sign of things to come.

What is German ice wine?

Eiswein in German, ice wine is a type of dessert wine. The winemaking process includes grapes being frozen while still on the vine. When this happens, the water freezes but sugars don’t, which allows winemakers to develop a more concentrated, sweeter grape juice.

Ice wines need the freezing process to happen before fermentation, rather than afterwards. Other dessert wines are made from grapes that are affected by noble rot (botrutis cinereal). This is what gives wines from the Tokaji, Sauternes and Trockenbeerenauslese an intense, sweet flavour. But German ice wines are free of noble rot, giving it a refreshing and distinct sweetness nicely balanced by acidity. An ice wine harvest usually happens before New Year, and in some cases afterwards.

Producing ice wine is always a risk for winemakers, as the grapes can rot before the frosts come. It also means that there has to be a large workforce able to harvest the grapes while they’re frozen, which means a tight timeframe. This is why there is usually small amounts of ice wine worldwide. Its production is limited to regions in the world that get cold enough, and Canada remains the biggest producer. Germany is the second biggest producer of ice wines, until the 2019 harvest.

Warmer winters mean less ice wine

The German Wine Institute announced recently that temperatures failed to fall to the necessary temperature of -7C (19F) in the winter of 2019/2020. This applies to all German wine growing regions and means there won’t be any ice wine from this year’s crop.

As there have been a number of warm winters in a row, Germany’s ice wine production has been steadily dropping. Just seven winemakers from Germany made ice wine in 2017 after only five were able to in 2013.

Ernst Buscher from the German Wine Institute told the Guardian that should warm winters continue into the future, Germany’s ice wines will become even more expensive and rare.

The main markets for German ice wine are the US, Scandinavia, Japan and China. It looks as those ice wine will become more sought after and reach higher prices among fine wine collectors as climate change continues to affect growers around the world.

How is coronavirus affecting the global wine industry

Coronavirus continues to cause concern around the world, affecting global stocks and many business sectors. And there is also fallout within the wine industry around the world.

The virus has now reached every continent apart from Antarctica, with countries including China and Iran suffering the highest number of fatalities so far. And as consumers in China cut back on buying wine, and cases remain stranded at customs, winemakers are seeing stocks fall.

Coronavirus is affecting wine industry

China is the biggest market for luxury wine in the world. The country accounts for just under a third of LVMH (Moet Hennessy Louis Vuitton) sales, which covers Cloudy Bay, Dom Perignon and Moet & Chandon. China also accounts for 10% of all sales of Pernod Ricard, which includes Jacob’s Creek and Campo Viejo.

And as the market slows, global brands are expecting major hits to sales. Spain’s biggest wine company, Torres, expects a 50% fall in March 2020. Bordeaux wines, which are very popular in China and the wider Asian market, fell 38.3% in the second week of February. According to Liv-ex, this is a record low.

Australia is also seeing strong hits to wine sales, particularly following the massive fires of recent months. With vineyard damage affecting some sales, other grapes have been affected by smoke taint. China imports about $1.3 billion worth of wine from Australia each year, which is 20% of the national crop. According to Forbes, sales were down for Australia wine by 90% in January and February 2020.

Wine shows are being postponed

China was due to host the massive China Food & Drinks Fair in Chengdu this month, but it has had to be postponed due to the virus. This annual show attracts 300,000 buyers and 3,000 exhibitors and aims to link up global distributors and promoters.

Other shows including the China International Alcoholic Drinks Expo (CIADE), TaoWine and the TWC Chengdu Fine Wine Showcase have also been moved to later in the year.

Imports have been particularly affected by coronavirus, due to dwindling numbers of customs officials. For example, usually around 33% of all Chilean wine goes to China but since the start of the year, exports have dropped by 60%. Before the outbreak of the virus, China imported approximately 350 containers of Chilean wine every day. Right now, 50 cases are going through customs daily. The rest are stuck at the port.

Exports are rerouted to ease port congestion

To mitigate the backlogs at Chinese ports, brands are trying to reroute shipments. However, with Italy and other countries reporting more cases every day, and more than 50,000 people under quarantine, alternative routes may also be difficult to access.

In China there has also been a huge fall in operating income across food and drinks businesses. According to the China Culinary Association, operating income has dropped 100% across more than three-quarters of businesses. This means that while food and drink companies are paying wages, insurance and rent, no money is coming in.

Fewer people are going out to eat and drink, which is also impacting wine sales. And while brands are trying to increase deliveries to make up for the money they’re losing, drivers are reluctant to risk catching the virus. Despite this, alcohol delivery companies have seen a 50% growth in February in China, after a leap of 60% over the Chinese New Year.

As the virus continues to spread, it’s likely that fine wine collectors and regular consumers will notice shortages in supply.

Why is non-alcoholic wine becoming more popular around the world?

It may not be the traditional way to enjoy wine, and it’s certainly not the favourite choice for fine wine aficionados, but non-alcoholic wine is becoming more popular than ever. According to a report from FoodBev Media, the non-alcoholic wine market could be worth $10 billion by 2027.

The report predicts that, between 2019 and 2027, the non-alcoholic wine market will get to a compound annual growth rate of 7%. A percentage of consumers are turning away from alcohol, either completely or in part by cutting down, and this is reflected in this sector’s increasing popularity.

Europe and North America buy the most non-alcoholic wine

Europe consumed more than 40% of the non-alcoholic wine market in 2018. Despite this, it appears that North America is fast becoming the most prominent market for non-alcoholic wine. This region will achieve a growth rate of 8% by 2027.

In a blog earlier this year, Ideal Wine Company looked at the growing interest in low-alcoholic wines. There has been a marked shift in quality in this sector, which is increasing consumer interest in these alternatives to traditional wine. And this report shows that there is also a growing interest for wine with 0% ABV.

Choosing to consume non-alcoholic wine, beer and spirit alternatives is a major trend currently moving the goalposts within the global drinks industry. While there have been low and no-alcohol alternatives on the market for years, the sharp uptake in sales figures shows that there is a general movement in this direction from a percentage of drinks consumers.

Trend for health and wellbeing driving interest in sector

During the past ten years, the non-alcoholic wine market share has markedly increased. Tied in with the overall trend for wellbeing, improving health and making specific choices to boost health, non-alcoholic wine is now positioning itself as one of the beverage categories with the most potential for growth.

Winemakers and producers of other alcoholic drinks are moving their focus towards creating good-quality non-alcoholic and low-alcohol versions of traditional products. This move is supported by various global zero-tax policies aimed at encouraging drinks producers to widen their offering in this category.

At the same time, in some parts of the world, wine drinking is waning slightly. For example, figures show that wine drinking dropped by 0.9% in 2019 in the United States. While this isn’t a huge amount, it is the first drop in consumption figures for a quarter of a century. Last year, wine represented 11% of the total alcoholic drinks sector in the US.

The report also predicts that there will be a huge increase of 99% in online sales of non-alcoholic wine within the same timeframe (2019 to 2027). This follows the same move into ecommerce by fine wine collecting, investing and buying. Key players worth keeping an eye on in the non-alcoholic wine category include McGuigan (Australia), Castel Freres (France) and E&J Gallo (California, US).

Wines from around the world showcased at Wine Paris 2020

Wine Paris 2020 took place between 10 and 12 February 2020. It was the first dedicated wine platform in Paris and was organised in response to market demand. A forecast study by International Wine and Spirit Research (IWSR) shows that Europe will continue to be the number 1 market for wine over the next five years. And, as part of the expo, IWSR showcased some of its highest rated French wines.

The best French wines on show at Wine Paris 2020

At the IWSC stand, delegates found some of the best French wines from regions all over the country. Wines on show came from Alsace, Cotes du Rhone, Languedoc and Champagne, and were available to thousands of visitors to taste during the three day exhibition.

Each French wine on show at the expo had been given at least 90 points by IWSC’s wine experts. The showcase included the Alsace Pinot Gris Selection de Grains Nobles Clos des Anges 2015, which scooped the highest number of points from the experts last year at 96.

A gold award winner last year, the wine was praised by judges for a flavour brimming with: “intense spice, white peppercorns, clove cooked pairs, cinnamon and glace chestnuts”. A smooth palate, chalky minerality and citrus acidity cuts through the sweetness, with a smoky spicy feel to finish.

Wines from around the world at Wine Paris 2020
Other winners from the IWSC also showcased at the event included wines from New Zealand, Austria and Italy.

From New Zealand, Church Road Grand Reserve Chardonnay 2019 was praised by judges for its “intense lemony… succulent stone fruit nose, followed by a luscious full-bodied complex and layered palate”.

Italy’s Borgo Isolabella Augusta – Nizza DOCG 2015 has vanilla, clove, cherry and fresh ginger flavours, with a complex palate. The judges praised its beautiful texture and well-balanced acidity. And from Austria, the Weingut Rabl Gruner Veltliner Ried Loiserberg Alte Reben 2017 was included thanks to its complexity and intriguing flavours of tropical fruit, orange blossom and peach.

Wine Paris 2020 aims to unite global industry

Wine Paris 2020 brought together 2,200 exhibitors from every French wine region, all showcasing the highest quality French wines. More than 30,000 buyers attended, with at least a third from overseas. The event aims to link together every kind of global wine professional, including importers, restaurant owners, sommeliers, specialised distributors and sales agents to taste the latest vintage wines, discover new wines and trial the extensive range available.

During the event, Wine Paris 2020 hosted Wine Talks, which were round-table discussions among engaging and passionate personalities to share best practice and creativity. This year marked the first joint event between Wine Paris and Vinexpo Paris, and the first industry event of the calendar year.

AS well as the conferences and discussions covering industry issues including “The future of French wines in the US” and “Trends and major challenges in the global spirits market.”, there was also heavy promotion for specific industry sectors. These included organic wine and other environmentally forward-thinking choices, and the ‘Be Spirits’ area, which featured 100 brands from 14 countries.

Looking ahead to 2021

French Minister for Agriculture and Food, Didier Guillaume, opened the exhibition and welcomed the inclusivity of combining the two complementary events as a boost to the country’s international influence in the wine industry. The top three countries represented by the trade and industry members at the joint exhibition were the US, Belgium and the UK.

The joint exhibition was so successful that Wine Paris and Vinexpo Paris are already preparing for 2021’s event. The plan for next year is to establish an event with even more international scope for visitors, exhibitors, producers and buyers.