Gaze into the crystal ball: Tentative trends for 2021

by | Jan 11, 2021 | Article

In these most unpredictable times, how will the trends and predictions for the global wine space in 2021 hold up? We asked a few brave souls to gaze into the crystal ball …

It was the best of times and the worst of times to be in the predictions game during 2020. In retrospect, the absence of a deadly global pandemic was a major omission from most major future trend reports for 2020. Yes, crystal-ball gazing might seem a bit foolish under such circumstances. Yet predictions and forecasts are more valuable now than ever before. Even if the fog shrouding the future of the global wine trade seems particularly impenetrable right now, it helps to have some sense of the way forward.

We picked the brains of four major role players in the global wine community on what the wine industry can expect from 2021.

James Reid

James Reid,
General manager of SA operations, Accolade Wines

“I think we have our own structural issues in South Africa brought on by the surplus situation. South Africa had a very tough time coming through the drought because we didn’t have the wine to service all our markets. When we didn’t have that wine, those markets started looking elsewhere. Now that we have wine again, we have to re-engage those markets and get them back and enthused by South African wines.

“Our focus is to re-emphasise that we’re open for business and talking to our international customers to come look at SA wines. I think we still offer incredibly great wine around Sauvignon Blanc and Chenin on the white and Shiraz and Pinotage on the reds. Those are the varieties we’re focusing on as a business.

“We also need to do a lot more and get ourselves more geared up around sustainability. As an industry, we already have a lot of the building blocks such as the Integrated Production of Wine (IPW) scheme, so we can measure how much carbon we use on a farm. We should be growing grapes and taking in carbon so we actually become carbon negative. So by the time you buy a bottle of wine you’re actually a carbon creator, and you can offset that against something else. We have the capacity to do that.”

Gavin Dittmar

Gavin Dittmar
CEO of Meridian Wine Merchants

“On-consumption will remain subdued for at least the first half of 2021. Expect 50-60% of what we were selling before Covid-19 in this segment. We may get lucky and have a late ‘tourist’ season from Europe, the UK and possibly other countries like the USA (January to April). The 2020 festive season may be extended with some schools / tertiary institutions opening up later.

“We’ll see strong retail sales as most people will be in holiday homes. Trusted brands will continue to do well. Shoppers will not experiment as much with their money, preferring to spend on what they know to be good. The wealthier consumers will spend more on wine for at-home consumption. Previously, they would have bought high-priced wine at restaurants and clubs and have lower-priced wines for at-home consumption. But they are entertaining more at home now and will be serving high-quality wines. By buying at retail prices rather than restaurant prices they can afford to enjoy more premium wines. By winter 2021, I expect South Africa would have learned how to deal with the virus better, and the possibility of a vaccine is very high, which should make a big difference by May 2021, when our winter really starts.”

Mark Meek

Mark Meek,
CEO of IWSR

“Beverage alcohol has proven to be quite resilient in the wake of the ongoing Covid-19 pandemic. According to new IWSR forecasts, total beverage alcohol volume across 20 key markets (driving 75%+ of global beverage alcohol consumption) will perform better than expected this year, with volume consumption down -8% in 2020, instead of the double-digit decline originally expected. Outside of RTDs (ready-to-drink), wines, in general, are a more resilient category within beverage alcohol, with an easier transition from the on-premise to at-home consumption. Although wine consumption will continue a long-term pre-pandemic declining trend in some markets, one of the bright spots in the category is sparkling wine, which we project to recover to 2019 levels by 2023. Sparkling wine in South Africa specifically is likely to see an almost +10% volume CAGR, 2020-2024. Although the alcohol ban weighed heavily on the South African beverage alcohol industry, wine sales saw an uplift once the ban was lifted in the second half of 2020, thanks to the category’s suitability for stocking and a strong ‘value for money’ proposition.”

Richard Halstead

Richard Halstead
COO of Wine Intelligence

“2020 will be remembered for many things – including some unexpected silver linings. In a world of lockdowns and economic uncertainty, consumers took comfort in things they could easily access that felt uplifting – speaking to friends, reading (or re-reading) books, cooking, healthy living, and drinking wine. Our view is that changing the calendar to 2021 will not immediately change the narrative. However we think things will start to change by the middle of the year, as vaccinations become more widespread and the medical community learns more about controlling the virus. More activities will become possible, including travel and eating out, and those in the tourism industries and the on-premise with the financial strength and smarts to remain solvent will have a great second half of 2021 as pent-up demand is released. In some ways this will be great news for the wine sector, which supplies these industries and tends to sell more value-added product in hospitality settings. In other ways it will be less good: people will have more diverse opportunities to spend money than they do right now, and that diversion of spending away from food and wine to drink at home will take some of the spark out of the off-premise wine market.

“On the whole, we see a mixed picture for wine in 2021. Economically, there will be hard times in many consumption markets, as countries take stock of the damage to government finances and the wider economy, and tax rates rise to start to pay for yawning fiscal deficits. With less money in our pockets, and uncertainty over our future employment and wealth prospects, we are unlikely to want to splash out. On the other hand, wine has become a more central part of many consumers’ lives over the past 12 months. For some, it’s a case of a habit restored; in others, it will be a new legacy of lockdown. In both cases, we think the habit of drinking, and caring, about wine, will persist for some time, or at least until our lives become busy and crowded with other interests again.”

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