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What The Market Says
English Speakers Embrace Wine
Tuesday, 17th October, 2006  - David Farmer

English speaking countries developed a taste for wine much later than the traditional, wine producing European countries, and while their consumption is static or falling that of North America and the U.K. is booming.

For the year ending March, 2005, wine sales in Canada of $4.2 billion exceeded spirit sales. Beer is still king with $8.4 billion in sales but the growth of wine has far exceeded that of other liquor. For example red wine sales have grown 60% over the last five years.

In the U.S. a similar story has unfolded with wine sales growing every year for the last 12 years and over the last nine years have risen 40% to nine litres per head in 2005. Retail wine sales are now worth $25 billion.

Sales have doubled in the U.K over the last decade and the per capita consumption is on a par with Australia at around 20 litres per head. Ireland has also shown strong growth. In Australia we took to drinking wine earlier than other English speaking countries with sales growing strongly through the 1970's and 1980's. After levelling out they have again grown over the last five years.

Big shifts in a consumer spending are not unusual though in the mature alcohol market the swing to wine consumption is most dramatic. It is said that favourable views about the health benefits of wine was one of the reasons that made drinkers switch from other forms of alcohol.

An article from Bloomberg, June, 2006, highlighted the following reasons for the U.S. based on data collected by Adams Beverage Media and a 2005 study by Merrill Research of San Mateo, California: "1. News stories about how moderate wine consumption can be a positive in terms of health; 2. Change in consumer attitudes regarding occasion appropriateness; 3. A strong U.S. economy; 4. Rising disposable incomes; and 5. Branded advertising."

The wine industry is different to other liquor beverages in having a large reporting business that comments about the making and selling of the many wine products. This business provides consumers with an endless variety of insights about wines in general, right down to specific wine recommendations. Possibly these wine commentators have played a significant role in influencing consumers to try wine.

What ever the reasons for the rise in wine consumption the wine industry must be doing something right and presumably it would be careful not to alter the current approach.

Far from it as many advise that the current model of selling wine is elitist and difficult to understand with the myriad of labels and wine lore making it intimidating for many consumers. There is a trend by some marketers to 'dumb down' the trade.

Not unusual is a recent comment by Paul Van der Lee from South Australia's Wine Industry Association who says daunting wine lists are discouraging young people from drinking wine.

"They can often see wine as an intimidating beverage choice... There's a lot of ritual that surrounds wine, there's a lot of technical language and it's very risky for somebody to venture into what might appear a bit of a social minefield. Because there's the potential embarrassment if people mispronounce the name of the wine or choose the wrong wine."

It may well be that the effort required to learn about wine is its best marketing ploy. The idea of simplifying wine lore and making it less technical is enticing but may be quite the wrong way to go.

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