The global wine market size was valued at USD 471.27 billion in 2022. It is estimated to reach USD 809.82 billion by 2031, growing at a CAGR of 6.2% during the forecast period (2023–2031). In recent years, an excess of grapes has been observed, primarily attributed to fluctuations in the dynamics of supply and demand. These grapes are used for wine production, driving the global market growth. Moreover, the surging sales of wine through e-commerce platforms, owing to the convivence it provides, is further boosting the market expansion.
Wine is an alcoholic beverage formed by fermenting fruit. The process of fermentation involves the utilization of sugar present in fruits by yeast, resulting in the production of ethanol and carbon dioxide, accompanied by the release of heat. While wine production can involve a range of fruit crops such as plum, cherry, pomegranate, blueberry, currant, and elderberry, the prevailing practice predominantly focuses on grape cultivation. Therefore, the term "wine" often denotes grape wine specifically, without any additional specification.
Wine is one of the world's oldest and most popular alcoholic beverages, with a rich history that dates back thousands of years. Red wine, white wine, rosé wine, and sparkling wine are among the numerous varieties and styles of wine. The specific grape variety, winemaking techniques, and growing region all contribute to each type of wine's distinctive flavors and characteristics. Numerous nations have enacted legal appellations to define wine styles and qualities. Typically, these regulations restrict the geographical origin, permitted grape varieties, and other aspects of wine production.
|Market Size||USD 809.82 billion by 2031|
|Fastest Growing Market||North America|
|Report Coverage||Revenue Forecast, Competitive Landscape, Growth Factors, Environment & Regulatory Landscape and Trends|
Increasing planting practices and favorable weather conditions in the past few years have resulted in the oversupply of grapes. Since there is a several-year lag between planting vines and shifting production to more popular varietals, the supply of wine grapes is often at variance with demand. According to the report "STATE OF THE WORLD VITIVINICULTURAL SECTOR IN 2019," published by the International Organisation of Vine and Wine in 2020, the world area under vines, corresponding to the total surface area planted with vines—including young vines not yet in production, was estimated at 7.4 mha in 2019.
Over the years, the cultivation of grapevines has led to a prominent increase in genetic diversity via sexual reproduction. The preservation and transport of vine seeds by people, which was likely a common practice in the past, has contributed to the creation of new varieties. The diversity has also increased due to natural genetic mutations, common in grapevines, and further assisted by ongoing vegetative propagation. Such factors boost the market growth.
E-commerce platforms offer unparalleled convenience to consumers, allowing them to peruse a vast selection of wines from around the world without leaving their homes and with just a few clicks. This convenience especially appeals to those who lack easy access to brick-and-mortar wine stores and specialty shops. In addition, online wine retailers typically offer a larger and more diverse selection of wines than brick-and-mortar stores. This vast selection enables consumers to explore various grape varieties, regions, and styles, broadening their wine preferences and knowledge.
Additionally, e-commerce platforms frequently provide comprehensive product descriptions, customer reviews, and ratings. Despite lacking expertise in wine, this information empowers consumers to make informed choices regarding their wine acquisitions. It increases transparency and assists consumers in selecting wines that correspond to their tastes and preferences, thereby boosting market expansion.
Increasing tariffs are being levied on wine imports by the governments of various countries, leading to rising product prices. This is expected to hinder the wine market growth. For instance, in January 2021, the U.S. government placed a 25% tariff on high-alcohol wine from France and Germany. The increased tax has garnered significant criticism from organizations like the Distilled Spirits Council of the United States and the U.S. Wine Trade Alliance. The imposition of tariffs would directly impact European wine and spirit products while also causing severe consequences and disruptions for other stakeholders in the U.S. hospitality business, including distributors, producers, and importers of alcohol.
The surging consumption of wine among consumers has been acting as a primary driver for the industry. Wine is considered an integral part of many European cultures and is regarded as a standard lunch and dinner accompaniment. Research conducted by the European Association of Wine Economists and the Chaire Vins et Spiritueux de INSEEC U. published in May 2020 stated that wine consumption increased dramatically during the confinement period brought on by the COVID outbreak in Spain and the rest of Europe. The study highlights that 36% of consumers began consuming wine more frequently.
Furthermore, the surging population of millennials worldwide is driving the global wine market. Alcoholic beverages, including wine, are gaining popularity among millennials, who are more willing than other consumer segments to try new varieties and flavors. In 2022, one-third of India's population consisted of millennials, presenting an enormous opportunity for domestic players to expand their geographic presence and increase their customer base.
Based on region, the global wine market is bifurcated into North America, Europe, Asia-Pacific, Central and South America, and the Middle East and Africa.
Europe is the most significant global wine market shareholder and is estimated to exhibit a CAGR of 5.21% during the forecast period. Europe is the most established wine market, with nations like Italy, France, and Portugal having the highest per capita wine consumption annually. Europe remained the world's highest consumption center for wine, at around 58% of the global volume in 2019. According to a report published by USDA Foreign Agriculture Services in 2020, Germany is the fourth-largest wine producer in the European Union. France, Italy, and Spain are the top three. It is estimated that 8.4 million hectoliters of wine will be produced in Germany in 2019 for marketing in 2020.
Most of Europe's wine production is concentrated in the Southern region, where consumers prefer local wine over foreign wine. However, countries like the UK, the Netherlands, Austria, Germany, and Belgium can offer significant growth opportunities for the wine market. These countries have insufficient domestic wine production, and the consumers are more open to foreign wines. The Eastern European wine market is relatively small, but wine consumption in this region is increasing, providing further growth opportunities for wine producers. This is expected to drive market growth in the upcoming years in Europe.
North America is anticipated to exhibit a CAGR of 6.2% over the forecast period. Americans and Canadians are among the richest wine lovers in the world, with a highly diverse taste for the drink. As per the blog published by The Grapevine Magazine, in 2019, Canadians are drinking less than consumers from some leading wine-consuming countries, but they are spending more on wine and branching out to explore new tastes and varieties from a wider range of wine-growing regions. The locally-produced brands of wine also influence consumer attitudes toward wine, with more Canadians now seeking high-quality domestic wine. Ontario's Niagara region remains the dominant source of Canadian wine.
Furthermore, as per the Mexican Wine Council (CMV), the average per capita consumption of wine doubled from 450 milliliters in 2012 to 960 milliliters in 2018. Mexico is increasingly becoming popular in the wine market due to its delicious gastronomy, tourism, and wines. Mexico is a significant producer of wine and continues to grow in production capacity. It is even recognized internationally, especially for the wines of Baja California. These aspects are foreseen to drive the demand for wine over the forecast period in North America.
Asia-Pacific market is driven primarily by China, Japan, and South Korea. The region has significant potential because of its large customer base, surging disposable incomes, and favorable climatic conditions for wine cultivation, particularly in China. Non-grape wine is experiencing wide penetration in all major markets of Asia-Pacific. In particular, red wine is expected to spur growth, as it is perceived to benefit health. The launch of various new wines is also propelling the market's growth in the region. For instance, in February 2021, Villa Maria, a New Zealand-based winery, launched its first range of organic wines, EarthGarden. The range includes Bordeaux Blend 2019, Pinot Noir 2019, Rosé 2020, and Sauvignon Blanc 2020. The producers claim that organic farming accentuates flavor in natural produce. As a result, wines made from organically grown grapes have more intense and evocative flavors. Villa Maria plans to convert the entirety of its vineyards to being organically managed by 2030.
The Middle East and Africa wine market gets little international attention compared to powerhouse countries like France and Italy. Alcohol drinking is strictly prohibited in several regions of the Middle East, such as Kuwait, Saudi Arabia, and Iran. Thus, the consumption of alcoholic beverages in this region is likely to remain low compared to North America and Europe. In addition, the consumption of alcohol in most countries in Africa and the Middle East is less than 5% of the worldwide average. However, players have been introducing alcohol-free iterations of wine, beer, and spirits, offering a premium trade-up alternative for consumers in regions where alcohol is banned. Such innovations are also ideal for markets where alcohol consumption is restricted, and this is expected to create a positive outlook for the wine market in the coming years.
The global wine market is bifurcated into products and distribution channels.
Based on product, the global wine market is segmented into table wine, dessert wine, and sparkling wine.
The table wine segment is the largest revenue contributor to the market and is expected to exhibit a CAGR of 6.31% over the forecast period. Table wines are non-sparkling, unfortified, and dry. Their accessibility through various off-trade channels and popularity among the vast population as a cost-effective option for regular consumption are the driving forces behind segment expansion. Novice wine drinkers often prefer table wines because they are affordable and easily accessible in retail. There has been a shift from hard liquor to milder alcoholic beverages such as beer, wine, and seltzers due to lifestyle changes. As a result, there is a notable increase in the demand for table wine due to this trend in the number of new wine users.
A survey completed by the European Parliament in October 2020 indicated that off-trade wine volume sales ranged between 52% and 82%, with consumers preferring local brands over fine wine brands. The table wine market is projected to experience growth due to rising sales volumes in the United States, European Union, and China, as well as the impact of these developments on consumption habits.
The sparkling wine segment is experiencing an increasing demand for effervescent wines. Albeit Champagne is the most notable of sparkling wines, the industry has witnessed an increasing proliferation of inexpensive sparkling wines. Increased consumer interest in spritz beverages and the spread of aperitivo culture in Europe has fueled the demand for sparkling wine. Similarly, changing lifestyles and rising disposable income levels among the middle-income classes of emerging economies are also key factors driving the demand for sparkling wine. Major urban hubs such as Beijing, Shanghai, Hong Kong, Singapore, Seoul, Taipei, and Mumbai have witnessed a surge in high-income population, facilitating the sale of premium sparkling wines.
Based on distribution channels, the global wine market is bifurcated into on-trade and off-trade distribution channels.
The off-trade segment dominates the global market and is expected to exhibit a CAGR of 4.6% over the forecast period. Retail stores, supermarkets, and hypermarkets comprise the off-trade distribution channel for wine. Due to the ongoing pandemic, the off-trade channel of wine distribution experienced greater growth than the on-trade channel. The lockdown increased demand for off-trade wine sales. As per a report by IWSR Drinks Market Analysis, approximately 80% of alcohol sales in the United States were generated by the off-trade distribution channel in 2020, while the on-trade distribution channel generated the remaining 20%.
Supermarkets and hypermarkets have been offering various wine deals, including huge discounts and coupons, another factor propelling wine demand via the off-trade distribution channel. Consumers can purchase alcohol from stores at a cheaper rate than bars and pubs. Moreover, the price of an entire bottle of wine is less than in bars, owing to the extra table charges and taxes. These factors have also propelled the growth of the off-trade distribution channel.
The on-trade distribution channel includes outlets like clubs, hotels, bars, restaurants, and coffee shops. The COVID-19 pandemic had a prominent impact on the expansion of this sector due to the closure of the businesses mentioned above and the cessation of international tourism due to global lockdowns. According to a report from mixer producer Fentimans, the first lockdown in the U.K. led to a loss of USD 14.5 billion in on-trade drinks sales in six months. Nevertheless, by category, wine in the U.K. was least exposed to on-trade closures as over 85% of wine consumption is at home, as per an article by IWSR Drinks Market Analysis. Since the lockdown's relaxation and the availability of vaccines, the on-trade channel for wine has resumed operations.