Global wine market to grow “by 37.8 million cases” to 2022 – premium is stronger
Market analysts at alcoholic industry research body IWSR have released their Vinexpo Report 2012-2022, claiming that despite a “blip” in Chinese demand, global wine consumption is expected to grow by 37.8 million cases to 2022. They also highlighted something Dominion has spoken about a number of times recently: that in wine, as in other luxury markets, the premium brands are outpacing their less-prestigious peers.
Constellation Brands’ share price has risen by 7% over the past three months
Source: Yahoo Finance
According to the report, premium wines will see demand increase by 50 million cases to 2022. The lower end of the market, however, will suffer, seeing 57.7 million cases worth of demand dry up. That’s a sentiment that is shared by Dominion holding Constellation Brands, which is in the process of selling off its cheaper brands.
IWSR also said that China’s current “blip” of demand was not a long-term concern – despite seeing an 8% to 10% drop in wine imports last year due to the slowing economy. Given that China’s one of the world’s major markets for wine, that spooked investors. According to IWSR CEO Mark Meek, it shouldn’t: “wine consumption will grow in China. We are seeing a blip and it’s economically driven as far as we can see and, therefore, we still forecast it to grow strongly.”
Meek also said that millennials weren’t continuing to drink wine at the pace he had previously expected: “We were under the impression that millennials were contributing to the uptake in wine consumption because it was seen as a sophisticated form of intake. But that’s dropped off. For one reason or another, millennials in the US seem to be switching off from wine – what the key reasons are for this are yet to be discovered and whether it’s just a blip we will find out.”
Meek said Africa was on pace to be the fastest growing wine drinking region over the period, with a compound annual growth of 3.1%, while North America is expected to be the biggest-drinking nation in 2022, responsible for 24 million cases on its own.
Dominion holds a number of wine sellers in its Global Trends Luxury Fund, including Treasury Wine Estates, Constellation Brands, and more.
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