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Top 5 wine predictions for 2018

Published:  10 January, 2018

Wine Intelligence has provided its top five predictions for the coming year.

According to the market research company, there will be “major impacts” on the sector as it sees some big shifts in the production and consumption, said communications manager, James Wainscott.

“We live in a particularly uncertain and fast-moving time of history. Extraordinary changes are occurring to our daily existence through technological change, and the global political landscape has become dislocated from long-established norms,” he said.

1. Climate change will throw up unexpected challenges

Wine Intelligence suggests that March and April will see harvests come up short due to the droughts last year in the southern hemisphere in countries such as South Africa.

“Hit by a doubly whammy of cold spring months and then summer droughts, European production is estimated to drop by 20% in 2018,” said Wainscott.

Wine Intelligence argued that the most obvious short-term impact will be rising prices, particularly in more desirable regions where demand is already strong, such as Prosecco. But it highlighted the threat of longer-term climate change, which could make it difficult for producers to maintain style and quality.

2. Brexit is going to hurt the UK consumer

The Wine and Spirit Trade Association has estimated that Brexit has pushed up prices 3% in three months, compared with a 1% increase over the previous two years.

Wine Intelligence said that the drop in the pound has increased overheads for importers and distributors, many of whom have been forced to introduce two rounds of price increases this year.

It also predicts that the on-trade will be hit by increased operating costs and said that the latest budget’s duty freeze on alcohol looks more like a “plaster than a panacea”. A higher National Living Wage is putting pressure on staffing costs and a real-term drop in pay means households are likely to eat out less. It also predicts that the restaurant trade will suffer, as it is unable to hire skilled labour from Europe.

3. Fizz will keep its sparkle

The bubble has yet to burst on the sparkling wine trend and Wine Intelligence said it expects to see “sparkling wine continue along its trajectory towards becoming an everyday delight".

China is a growing market with an 18% compound annual growth rate in sparkling wine volumes from 2012-2016. Champagne has climbed from the 5th most popular alcoholic beverage to the 4th (behind red wine, beer and then white wine.)

4. Alternative packaging will advance

The premiumisation of bag-in-box will continue, it predicts.

“Le Grappin has eased the way for appellation wines bagged and boxed, and also launched the “bagnum” (a 1.5 litre bag of wine),” said Wainscott.

It also revealed that convenience stores across Europe now carry single servings of wine and there are pouches, cans, glasses, vials and mason jars available.

5. Organic and sustainable wines will matter more

Organic wines are going to become more visible and desirable to wine drinkers, Wine Intelligence predicts.

It said that the confusion in the on- and off-trade that fails to convince consumers to trade up is set to change – bolstered by the success of organic for food labelling.

Its own research shows that 41% of regular wine drinkers in Spain are aware of sustainable and organic wines, but only 5% know about biodynamic wine.

“That’s why we expect organic and sustainable wines to break into the mainstream before long,” said Wainscott.