wine sales

The impact on Europe's Mediterranean countries will be higher, where the percentage of bars, pubs, and restaurant is high, and the tourism effect on the countries’ economy is also substantial. Credit: Yulia Grigoryeva / Shutterstock.

One of the sectors hit hardest by the global pandemic is foodservice. This has subsequently had a huge impact on alcoholic beverages sales, especially in Europe, and more particularly in the Mediterranean countries, where the out-of-home drinking culture is stronger than in other parts of the world. The International Organization of Vine and Wine (OIV) is anticipating that the European wine makers’ revenue will be halved in 2020 due to Covid-19, and that the wine sales coming from other retail channels such as supermarkets will not be enough to help the overall sales.

Last Thursday (23 April), the OIV announced via a video message that one of the most important effects of the coronavirus was a big shift in the wine distribution channels, culminating with the radical disappearance in most countries of the HORECA channel. This has subsequently had a large impact on wine sales, especially in Europe, where the social drinking culture outside of home is widespread. The organisation estimates that in Europe, the shutdown of this channel will bring down a 35% reduction in volume and reach more than 50% loss in sales value. The effect will be slightly disproportionate among regions, with a higher impact on the Mediterranean countries, where the percentage of bars, pubs, and restaurant is high, and the tourism effect on the countries’ economy is also substantial. Furthermore, the wine sales coming from off-trade channels are not sufficient to counteract the negative effects of the Covid-19 pandemic. In fact, according to GlobalData’s Covid-19 tracker consumer survey – week 5, 33% of global consumers (11 countries surveyed) say that they have stopped or are buying less wine than before*, whilst only 13% claim to be buying more**.

Although European countries have started easing the restrictions, with some Italian regions even starting to open pizzerias and takeaways defying the central government, it remains to be seen whether people, locals and tourists, have enough confidence to restart life as it was before the lockdown, and enjoy going out without any fear of contracting the virus. Restaurants should prepare low numbers of visitors even months after all restrictions are stopped. Restaurants and wine producers must find ways to collaborate and provide consumers with new and innovative ways to enjoy a drink without feeling anxious, and keeping the profits up at the same time.

*GlobalData’s Coronavirus (COVID-19) Tracker Consumer Survey – Global – Week 5 – stopped/lower/significantly lower quantities

** GlobalData’s Coronavirus (COVID-19) Tracker Consumer Survey – Global – Week 5 – more/significantly more/stockpiling

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