Boom times ahead for British Wine as Covid boosts at-home drinking around the world

Working in the business of market insights, the world of food and drink always throws up some interesting headlines and this week proved to be no different.

While many of us fear climate change for various different reasons, Sky News revealed that rising temperatures may actually bring various benefits to the wine economy in the UK, notably by turning the South Downs into a ‘wine-growers’ paradise’.

At present, just 0.4% of agricultural land is used for viticulture, but as temperatures shift, the report suggests that around 34% of this could be suitable for winemaking in the future. One indication of the pace of change is the reported 90% increase in vineyard coverage during the past five years, equating to five new vineyards being planted each year.

Boom times for British wines

According to the Evening Standard, business is in the UK wine industry is already ‘booming’ though, this despite the well documented problems associated with Brexit and the continuing pandemic. Sales of British and welsh wines at Waitrose rose by nearly 50% versus 2020 in just January to May this year. Buoyed by the rising temperatures, grapes have thrived and led to six wine vintages in the past decade in comparison with just the two that graced the Noughties.

Interestingly, the pandemic has also delivered some silver linings to businesses. Denbies Wine Estate recorded a 500% increase in sales during the past year, while exhausted holiday walkers found a ’slice of escapism’ in buying Christmas supplies from its Cellar Door Shop. 

USA: Spirits volumes surge as Covid boosts at-home drinking

Sales in alcohol have also boomed across the pond, with new data from IWSR Drinks Market Analysis indicating that consumption in the US rose by 2% in the last year, driven by at-home drinking fuelled by the pandemic. That trend looks set to continue too, with flavoured subcategories outperforming the more traditional drinks, as alcohol volume sales rise by nearly 4% year-on-year by the end of 2021.

While flavour was the top consumer driver for the ready-to-drink (RTD) market, it appears US citizens doubled down on their spirits intake, with pandemic sales posting the largest volume increase since 1990.

According to Drinks Business, agave-based sprits such as Tequila and Mezcal were the big winners alongside Cognac and Armagnac, posting volume gains of +15.9% and 20.1% respectively. Interestingly imported wine volumes from the likes of Chile, Italy and New Zealand grew by more than 2.5%, easily beating domestic offerings as sales of low-alcohol wines also doubled in 2020.

South Korea: Homsul drives imports of fruit wine

Another notable shift occurred in South Korea where more than 69,000 tons of fruit wine were imported during the last year as consumers began to drink at home alone in a new trend known as ‘homsul’.

Significantly, although this translated to a 30.4% increase in sales of products retailing at just under $9USD steadily throughout the year, BeverageDaily reports that beer imports continued to fall, dropping by more than a fifth (83,000 tons).

China betting on Ningxia wine exports

When big numbers are involved, China is never far away and this week, CNBC reported that its central government had approved a 15-year wine development plan for the Ningxia Hui Autonomous Region which it hopes will one day rival the production levels in the French wine capital of Bordeaux.

With the Helan Mountains’ diverse variety of grapes already accounting for the majority of domestic wine production China sees a rich future for Ningxia’s wine exports which rose by more than 46.4% last year. In fact, by 2035 the plan is to produce some 600m bottles ($3.12bn) and become ‘an internationally important and influential production area, with a scale matching that of Bordeaux’.