Global wine consumption fell only 3% during 2020, according to the OIV in Paris, in their annual state of industry report, released on April 20. The decline was primarily due to the impact of Covid-19, reported Pau Roca, Director General of the OIV, who compared it to the impact of the 2008 financial crisis.
However, the vast differences in wine consumption between countries was more dramatic. Brazil, for example, increased 18.3%. Part of the reason was that during Covid, Brazilian wine e-commerce increased significantly, and it became easier for Brazilians to purchase wine in this format.
But e-commerce was only one factor, according to Rafael Romagna, International Marketing Analyst with Wines of Brazil, “People stayed at home during the Covid pandemic and started to consume more Brazilian wines; and because of wine e-commerce expansion, it was easier.” The fact that Brazil is developing a middle class with higher income earners, also may be at play here.
In China, it was a very different story. Wine consumption dropped by 17%, due to a variety of issues. Roca cited structural changes in the Chinese wine industry, such as a decrease in vineyard and wine production, as well as competition from imported wines.
“Tight lockdown killed consumption scenes such as business dinners, family gathering, friends gathering, marriage ceremony and post funeral eating together,” reported Ma. “Even today the restaurant business is not fully recovered, and wine has lost a big part of the stage.”
Furthermore, “Chinese also have strong family tie, where wine and overall alcohol are used less for stress comforting,” continues Ma. “Instead it is usually used for enhancing ‘relationships’ and celebrations. There was hardly any celebration during the pandemic.”
Yet in the US and France, wine consumption stayed flat. It didn’t show a sharp increase or decrease, according to the OIV. Perhaps this is positive as the US is the number one largest wine consuming nation in the world, and France is number two.
The only other country that had a large decrease in wine consumption was South Africa, and that is primarily because the government banned the sale of alcohol during several months of the pandemic.
In conclusion, Roca doesn’t believe that the Covid crisis will impact the global wine industry for long. “We are going to recover more or less quite fast,” he predicted. The fact that global production was up only 1% to 260 mhl in 2020, also bodes well as supply and demand are not that far apart.
She mentions that wine has suffered more than beer and spirits in China, because it is part of a lifestyle. “People wear masks for more than a year now – the sale of lipsticks also dropped sharply.”
This article by Liz Thach first appeared in Forbes, April 20, 2021.