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A REPORT FROM GWS

In the second of a series of articles related to trends in the online wine industry, Global Wine & Spirits is now taking a look at who drives wine consumption worldwide and what the role of the Internet is in market growth.


World wine consumption is up, slightly. According to Vinexpo 2007, this represents a 1% yearly growth in expected volumes and 2.3% in expected value between 1999 and 2009. While the news is better for higher-valued wines overall, this growth is not happening everywhere and the US market has been the main engine for this growth. In fact, according to Adams Handbook, wine volumes grew a whopping 46% between 1996 and 2006 for the American market.

Taking a closer look at these consumers and their drinking habits, and based on a study of the Wine Market Council, it is interesting to note that a core group of drinkers is driving consumption and therefore growth. This core group of drinkers according to the same study represents 17.4% of the population, but consumes 92% of volumes. These consumers are going online too: while 5 % of these core drinkers had bought online in 2000, this number was up to 20% in 2006! They have also been buying from wineries: While 6% had bought from a winery site in 2003, 17% had bought from a winery website in 2006.

One wonders if this trend will spread outside the US, and what impact this will have on the online wine industry. A way to answer that is perhaps to look at generational behaviour. The under 30 population (Millennial Generation) are heavy Internet users. There is no doubt that they are a force to be reckoned with and that their consumption behaviour for wines will mirror trends observed in their consumption patterns elsewhere.

This generation has some disposable income but will have more as time passes. They are a large cohort, representing 26% of the US population, while the Boomers represent 29%. They like wine and are drinking more of it. According to Wine Market Council research, 40% of them (sampled) are said to be ?drinking more wine.? And they are drinking more imported wines as well: while Boomers favoured domestic wines in a large proportion (67%), the proportion of Millennial Generation drinkers who favoured domestic wines was down to 37%, compared to 32% who enjoyed imported wines and 31% who enjoyed both evenly.

The core drinkers of the Millennial Generation will be a group to watch closely. The question will soon become how quickly these consumption patterns and purchasing behaviours will be imitated by members of this generation outside the US?. Weren't they chatting online together yesterday?

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