Wine Quarterly Q1: Can the US Wine Market Regain Its Momentum?
Consumption growth in the US wine market is slowing. If the industry is to return to its previous growth rates, it is going to need to make bold moves to respond to a changing market structure, and an emerging consumer with different values. Wineries will need to invest in e-commerce capabilities and re-think traditional brand building strategies.
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“Tariffs, trade agreements, and the coronavirus outbreak have shaped global trade in recent months,” according to Stephen Rannekleiv, global Strategist Beverages at Rabobank. “Hopefully, the latter will be contained quickly, but lost demand from the period will not be recovered. Tariffs and trade disputes are here to stay, and although they may not affect absolute volumes of consumption in the countries involved, they will trigger some reshuffling in global trade.”
Despite a decline in wine production in 2019 and the likelihood of somewhat smaller crops in a number of southern hemisphere countries in 2020, price increases are elusive due to uncertainties about demand in China and the US. Both markets are facing uncertainty, and together they represent around 20% of global consumption, as well as nearly half of total demand growth between 2014 and 2018.