Dr. Nadia van der Colff
20 May 2021
In this blog post (the last in the Wine Consumer Series brought to you by Sauvignon Blanc SA), current global and local consumer trends are addressed with some insights relevant to South African wine and Sauvignon blanc in particular.
Alcoholic drinks landscape and trends
As the global alcoholic beverage landscape witnessed significant changes and challenges since 2020, it is no easy task to decipher current and future consumer trends. With financial crises looming in many markets, consumers are expected to switch or buy down at lower price points across alcoholic beverage categories1.
With wine’s key selling points and attraction centred around exclusivity, aspiration and quality, some consumer segments might struggle to keep buying their favourite wines. On the contrary, financially less affected consumers, indulge in exclusive food items and wines to compensate for losing out on travel and dining experiences.
The Covid-19 pandemic has, to an extent, polarised the consumer market with contradicting trends playing out in the wine category1.
Health and indulgence trends
Health and no/low-alcohol wine
Even before the pandemic, a lot of consumers were already more health-conscious and cutting down on alcohol. Especially the younger generations are more likely to consume less alcohol in general2.
In 2020, a record number (23%) of teetotal UK consumers between the ages of 18-24 was recorded2.
Beer currently dominates the low and no alcohol UK market, yet New Zealand light wine increased by 20% volume sales from 2018-2019 in Britain (read more about New Zealand light wines and Sauvignon blanc in blog post 4)2.
Local indulgence and niche wine markets
In a local wine consumer survey (n=2774) conducted during the first Covid-19 pandemic alcohol sales ban, almost 50% of the respondents reported having consumed more wine during the first two weeks of lockdown. In addition, 27% of the respondents intend to spend more on wine in the future while 5% indicated that they are more likely to experiment with unfamiliar wines than before3. However, considering national sales data, almost 20% less still wine (volume) was sold in 2020 compared to 20194.
It is, therefore, important to continue to find local niche markets for wine brands and Sauvignon blanc amongst highly engaged wine consumers.
Bigger and smaller packaging trends
In 2020, for the first time, more bag-in-box (BIB) wines were sold in the South African market than bottled wine4. Innovative premium BIB wines, such as Woolworth’s new range, delivers to consumers’ need for high quality wine at a more affordable price.
As consumers spend more time at home, there are no crowds to impress and drinking wine from a box becomes an easier choice.
BIB wines are currently also trending in the US, UK and Japan5. However, BIB is considered by some as a short-term trend, with consumers reacting to lockdown restrictions. In the local developing market, with perhaps a bigger segment of the market under financial pressure, BIB might become a long-term trend.
Internationally, canned wines are trending in countries with well-established ready-to-drink (RTD) markets such as Australia, the US and UK.
“Younger consumers are drawn to canned wine’s convenience, versatility, environmental credentials, portion control, and fresh marketing approach” – The IWSR, 20215
With a large developing market and a young population, canned wines might become a long-term local trend, competing mainly with RTD’s. Considering the established RTD market, dominated by sweet alcoholic drinks and strong brands, appropriate product and marketing strategies need to be developed for canned wines.
More research is required to determine whether Sauvignon blanc in a dry style, is appropriate for the local market’s canned wine preferences.
(Read more about local consumers’ wine journey and perception of Sauvignon blanc in blog post 4)
Sauvignon blanc in fashion
Sauvignon blanc, as a single varietal, is currently a firm favourite in the local and UK markets, with a growing interest in the US.
Perhaps the biggest opportunity for South African Sauvignon blanc is in the US market where the demand is still growing rapidly.
Sauvignon blanc is currently the third best selling variety in the US6, however, it was also the fastest growing US wine category with a sales increase of 38% during the first part of 20207.
Locally, Sauvignon blanc appeared to be more resilient during 2020 than other varieties, most likely as it is regarded a low risk and uncomplicated choice for consumers.
(Read more about local consumers’ perception of Sauvignon blanc in blog post 1)
Although 20% less still white wine was sold in 2020 than in 2019, Sauvignon blanc sales declined by only 6.8% in the local market, compared to Chardonnay (- 19.7%) and white blends (- 38.4%)8-9.
Market development and implications for Sauvignon blanc
Rigorous marketing should be done to gain market share in the mature UK Sauvignon blanc market. As more of the younger UK generations abstain from alcohol, and the UK is one of South Africa’s major export markets, new export markets should also be developed for long-term export retention.
US and other markets
As pointed out, the US Sauvignon blanc market is growing rapidly and should be tapped into optimally before the market is mature and saturated. Some alternative and developing e-commerce markets that could be considered for wine sales and exports are Mexico, Colombia, Argentina, Netherlands, Israel, Nigeria, Kenya, Singapore and the Philippines10.
Sauvignon blanc appears to be a firm favourite locally. However, as with all product life cycles, a plateau in sales might be reached.
Careful analysis of the alcoholic beverage category, as well as consumer and Sauvignon blanc trends, are critical to identify and adjust according to changes in market dynamics.
Short-term as well as long-term Sauvignon blanc strategies are required to navigate the ever-changing global and local wine markets.
At least for now, South African wine, and especially Sauvignon blanc, is probably well-positioned to provide the discerning local and global wine consumer with high quality at an affordable price.
This blog post concludes the consumer series that provided consumer insights for South African Sauvignon blanc.
- Euromonitor. (2021). Alcoholic Drinks: Top Three Trends: Darkest Before the Dawn? Available: https://blog.euromonitor.com/alcoholic-drinks-top-three-trends-darkest-before-the-dawn/?utm_campaign=blog&utm_medium=social&utm_source=linkedin
- SIBA. (2020). British Craft Beer Report. Available: https://www.siba.co.uk/2020/03/13/siba-british-craft-beer-report-2020-highlights/.
- Consumer Solutions. (2020). Unpublished consumer survey data. https://www.consumersolutions.co.za.
- SAWIS. (2021). Wines sold by container 2020. Available: http://www.sawis.co.za/info/stats_winesold_2020.php
- The IWSR. (2021). Global wine trends to watch in 2021. Available: https://www.theiwsr.com/global-wine-trends-to-watch-in-2021/
- Concours Mondial du Sauvignon. (2021). The rise and rise of Sauvignon blanc in the global marketplace. Available https://cmsauvignon.com/en/the-rise-and-rise-of-sauvignon-blanc-in-the-global-marketplace/
- King, R. (2020). Sauvignon Blanc has become the go-to wine for Americans during the pandemic. Fortune, Jun 2020. Available: https://fortune.com/2020/07/14/sauvignon-blanc-sancerre-coronavirus-white-wine-trends/
- SAWIS. (2020). South African Wine Industry Statistics 2019 (No 44.) Available: http://www.sawis.co.za/info/annualpublication.php
- SAWIS. (2021). Sauvignon blanc sales statistics. [Email correspondence]. 18 May 2021.
- The IWSR. (2020). Beverage alcohol ecommerce value grows by +42% in 2020, to reach US $24 Billion. Press release. Available: https://www.theiwsr.com/wp-content/uploads/IWSR-Beverage-Alcohol-Ecommerce-Shows-Rapid-Growth-2020.pdf