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Insight of the Day: Alternative futures in the wine industry

Key Insights from the IWSR Report on Alternative Wines:

  • Growth Opportunities: Despite a decline in the overall wine industry, alternative wines (natural, organic, sustainable, and Fairtrade) are showing potential for growth.

  • Shifting Consumer Focus: While climate concerns initially drove interest in alternative wines, consumers are now primarily drawn to their perceived higher quality and health benefits.

  • Target Demographic: Younger legal-drinking-age wine drinkers, particularly millennials, are the most engaged buyers of alternative wines. They associate these wines with high quality and are willing to pay a premium for them.

  • Organic Wine Dominance: Organic wines have the highest awareness and market share among alternative wines, with Germany, France, and the UK leading in consumption.

  • Emerging Markets: Opportunities for growth exist in newer markets like Hong Kong, Brazil, and New Zealand, where awareness and consideration of alternative wines are increasing.

  • Australian Organic Wine: Although exports have declined recently, the domestic market for organic wine in Australia has grown steadily since 2012.

  • Natural Wine Trends: Pétillant naturel (pét-nat) and orange wines are gaining popularity in Australia, with several wineries experimenting with these styles.

  • US Market Dynamics: While US consumers have historically been connected to sustainability and alternative wines, this engagement has declined in the past year due to economic pressures. However, the market for organic and natural wines remains stable, driven by millennials.

Key Takeaways:

  • The alternative wine market presents a significant opportunity for growth in an otherwise declining industry.

  • Understanding the motivations and preferences of younger consumers is crucial for success in this market.

  • Organic wines are the most established and popular segment within alternative wines, with potential for growth in emerging markets.

  • The Australian organic wine market is growing domestically, with increasing interest in natural wine styles like pét-nat and orange wines.

  • The US market is experiencing a decline in overall engagement with sustainability, but the organic and natural wine segments remain strong, driven by millennial consumers.

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