Distribution and consumption habits are changing in the United States


At the economic level, the sharp increase in value is mainly due to the reopening of bars and restaurants, to the detriment of sales for home consumption. Structurally, several analysts agree that the wine sector does not focus enough on recruiting new consumers and the unprecedented competition exerted by spirits. The Dutch bank Rabobank summarizes the main factors impacting the wine sector in the USA in five ‘C’s: the Covid, the consumers, the channels, the (supply) chains, and the competitors. If the first remains unpredictable, the others are part of underlying trends. For example, only 32% of American adults drink wine, a percentage that rises to 25% of 20-29 year olds. Wine consumers are also predominantly non-Hispanic whites, pointing out, as Dr. Liz Thach points out in an op-ed in Forbes, the lack of recruitment of consumers from other ethnic and cultural groups. At the same time, spirits aggressively seize new consumer opportunities and engage with a diverse consumer audience spanning all age groups notes Rabobank, which also cites the rise of cocktail culture and the positive cultural references associated with spirits (through television series such as Mad Men or Boardwalk Empire).

Boundaries between beverage categories are blurring

Add to that the loss of power of the wine category in a distribution circuit that it has long dominated: e-commerce. According to Rabobank, the share of wine in sales of alcoholic beverages online amounts to 62% (72% in 2018) against less than 25% in physical stores. E-commerce represents 10.9% of US wine sales, compared to 3.1% for spirits and 1.5% for beer. Here too, spirits are beginning to encroach on this domain of wines, being now referenced, for example, on major sites such as Wine.com, not to mention the ongoing regulatory initiatives aimed at authorizing direct sales of spirits. For Gabe Barkley, CEO of the import company MHW, the evolution of online sales actually reflects a greater nomadism between categories of alcoholic beverages among consumers: only 17% of them drink only wine. Citing the acceleration of the involvement of BRSA brands such as Pepsi and Coca Cola in the alcoholic beverages sector, the importer believes that this phenomenon is leading to a profound change in distribution channels, merchandising policies and the supply chain. ” Consumers are now looking for products that match their style of wine and their changing perception of alcohol has been driven by technology, changing demographics and e-commerce. “.

Think about other distribution systems than the Three Tiers

Rabobank goes further: “ Will e-commerce replace the CHR circuit? In a few years, the turnover of cellars generated by online sales will equal or even exceed that of their activity in CHR “, she warns. And to add: E-commerce is the most powerful tool the wine industry has to encourage discovery and tell its story. ” with young consumers, “ i.e. the target he worries he has lost touch with “. For Gabe Barkley, e-commerce “ is a very good way to focus on its access to the American market. We have to think of systems other than three-thirds, there are other solutions. You have to choose your platforms according to what you want to accomplish. Do we rather want a market place function, or do we want to acquire data, for example?. This, knowing that electronic commerce serves as a gateway to other circuits.

The quest for authenticity, a boon for French wines

For France, the MHW company is rather optimistic. ” Since the lifting of punitive customs duties, France has rebounded well », Welcomes Steve Melchiskey, president of the import company USA Wine West, acquired at the end of 2021 by MHW. ” Bordeaux had a record year in 2021 adds Helen Gregory, founder of marketing agency Gregory + Vine. This French dynamism can be explained, not only by the lifting of customs duties, but also by a quest for authenticity expressed by consumers in a post-Covid world. ” Big brands have done well during the pandemic because they had the ability to secure supplies and shelf presence explains Steve Melchiskey. ” On the contrary, typical and regional products have suffered because their promotion depends a lot on dinners in the presence of winegrowers or masterclasses. Now consumers will return to the human factor and the authenticity of products, and retailers want to be able to offer something exciting to their customers. “.

Reasons for hope

For 2022, analysts and importers agree that these trends will continue, creating multi-level opportunities for exporters. Admittedly, the rise in inflation and the logistical difficulties ” which should not begin to resolve until the third or fourth trimester according to MHW, are raising headwinds in the US market, as elsewhere. But greater consumer openness, new market access, sustainable development, the wellness trend (no/low, organic), the rise of women and ethnic minorities and premiumization, are all carriers of opportunities for the wine sector.

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