The global wine market is set to see a significant expansion in the coming years, according to a new report by Technavio. This report predicts the market will grow by £125 billion from 2024 to 2028, experiencing a compound annual growth rate (CAGR) of 4.93% during this period.
Several key factors are driving this growth, including the rising popularity of online sales channels and the increasing presence of private-label brands. However, the market faces challenges from competition with other alcoholic beverages, which are often perceived as being more affordable and accessible.
Private Label Wines: A Driving Force
Private-label wines have become a major focus for retailers worldwide, pushing the global wine market forward. Retail giants like Alibaba and grocery chains such as Tesco and Aldi are all embracing their own branded wines. This move allows them to capitalise on the increasing consumer demand for wine while also enjoying higher profit margins compared to national and global brands. These private-label wines are exclusively produced for a single retailer and sold under their brand name, setting them apart from winery-branded products.
A Flourishing Market
The wine market is looking positive overall, with growing product adoption, especially among younger consumers. Consumers are drawn to the delicate flavours and richness of the product. Health concerns, such as coronary heart disease, heart attacks, and strokes, have led some consumers to seek out wines with potential health benefits. Organic wines are also gaining popularity due to growing health consciousness and concerns about chemicals.
Sustainability and Premiumisation
Premiumisation and sustainability are key trends within the wine industry, with wineries increasingly adopting organic methods and focusing on reducing their carbon footprint. Socialising continues to be a major factor driving wine consumption, with restaurants, bars, and wine tourism playing key roles. Western cuisines and the vast array of wine varieties cater to diverse palates. E-commerce platforms are emerging as crucial retail sales channels, offering convenience and accessibility.
Challenges to Consider
The global wine market faces competition from a range of alcoholic beverages, including beer, spirits, and cocktails. This competition is driven by factors such as the availability of cheaper and more accessible alternatives, changing consumer preferences, especially among younger demographics, and the growing popularity of imported brands of beer, spirits, and cocktails.
The wine market also faces challenges related to the modern business landscape. Ensuring secure and timely delivery of perishable red wine within the e-commerce sector is a major hurdle. Sustainability and organic methods in wine production are becoming increasingly important for wineries seeking to attract health-conscious consumers.
Market Segmentation
The report offers a comprehensive analysis of the wine market based on distribution channel, product type, and geography.
Distribution Channel: The market is segmented into off-trade and on-trade channels. The off-trade channel encompasses sales through retail stores, supermarkets, and online platforms, while the on-trade channel includes sales in restaurants, bars, and hotels.
Product: The report analyses the market based on different types of wines, including red, fortified, white, and sparkling wines.
Geography: The global wine market is further segmented by region, with detailed analysis of Europe, APAC, North America, South America, and the Middle East and Africa.
The Future of Wine
The global wine market is poised for continued growth, driven by the increasing demand for high-quality wines, the rise of private-label brands, and the evolving preferences of consumers. The industry faces challenges, particularly from competition with other alcoholic beverages and the complexities of the modern business landscape. However, the wine market remains resilient and continues to adapt to evolving trends, offering diverse options and appealing to a broad range of consumers.