China, mass retail and Web to drive global wine sales

LONDON Fri Apr 26, 2013 2:40am IST

A man introduces his products inside a wine store at the business area of Ruzhou county, China's central Henan province, December 17, 2012. REUTERS/Aly Song/Files

A man introduces his products inside a wine store at the business area of Ruzhou county, China's central Henan province, December 17, 2012.

Credit: Reuters/Aly Song/Files

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LONDON (Reuters) - Mass retailers and the Internet will increasingly dominate the $164 billion global wine market at the expense of bars and restaurants, industry experts said on Thursday.

A report commissioned by VINEXPO, an international wine and spirits trade fair, also highlighted the dramatic rise of China as a consumer of wines - mostly its own. It topped all other countries in volume and value between 2007 and 2011.

"China is the champion," VINEXPO Chief Executive Robert Beynat said.

The report, "Distribution in the World and Expected Changes by 2020", showed that in the 18 countries that drink three-quarters of the world's wine, the key trends are rising mass sales and a decline at corner shops, bars and restaurants.

"We will probably see corner stores disappear eventually," Beynat told reporters, adding that they were in decline everywhere except China.

The report said the "off-trade", where wine is consumed away from the premises, accounted for 71.7 percent of all volumes worldwide. France's Carrefour (CARR.PA) and Britain's Tesco (TSCO.L) are typical of the big retailers that lead the way in most markets.

Just over three in four Chinese buy wine in hypermarkets, compared with two-thirds in France and 46 percent in Germany.

The fast-growing Chinese market also topped online sales, with 27 percent of consumers sometimes buying wine this way. Japan, Brazil and Britain were just behind.

The report predicted 47 percent of Chinese would buy wine on the Internet by 2020. Japan, Britain, Australia and Germany would also see a rising online trend, but Internet sales would stagnate in France and Russia.

Beynat suggested that the 2008 financial crisis and ensuing global economic malaise had made consumers much more conscious of value for money, hitting the "on-trade" in wines, bars and restaurants, where prices are higher than in stores or online.

Richard Halstead of Wine Intelligence, the research group that produced the report, said new innovations were emerging in the off-trade.

One is "consumer risk reduction", a strategy to classify wines more simply by taste, type and food-matching to make it easier for consumers to avoid mistakes when they buy.

Another is the drive to connect drinkers with winemakers - exemplified by Britain's Naked Wines, whose customers choose which makers to buy from and even how they blend their wines in some cases.

VINEXPO 2013 takes place in Bordeaux, France, from June 16 to 20. Featuring 2,400 exhibitors from 45 countries, it is expected to draw 48,000 visitors from 135 countries.

(Editing by Mark Trevelyan)

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