Total wine consumption in the US will show static volumes for 2020, with consumers broadly drinking the same amount of wine, but doing more of it at home, according to modelling work based on Wine Intelligence’s Covid-19 consumer insights data collected during March and April 2020.
Off-premise volumes will grow by around 10 percent year on year, while on-premise volumes will fall 29 percent, according to the base case version of the Wine Intelligence model, which is based on recalled and intended consumption patterns, cross-referenced with US on- and off-premise wine market volume sales published by IWSR, Nielsen and Wines & Vines Analytics.
The base case model assumes no second wave of coronavirus infections hitting the US in the second half of 2020. A worst case model, assuming a second virus wave with a lockdown in October and November, suggests we would see a decline of around two to three percent in total wine volumes, with the on-premise seeing a year-on-year decline of closer to 50 percent.
The basis for the model was a survey of 2,000 US adults who drink wine at least once a month, conducted in March and April. They were asked to describe their normal wine drinking behaviour, how their wine drinking had changed as a result of lockdown and what their intentions were once lockdown restrictions were eased.
The research team behind the model decided not to include a specific prediction on change in dollar value of the market, citing the fact that there were too many variables to consider and that industry estimates about on-trade sales value vary widely. However, the researchers noted that the implications of a switch from higher value on-premise product to mainstream priced off-premise product would lead to a ‘significant’ value decline in the US market this year, even though overall volumes are predicted to remain stable.
Lulie Halstead, CEO of Wine Intelligence, said, “In line with what was observed in the wine market during and post the global financial crisis of 2008-10, wine volumes held up in the US market, but the mix shifted towards more value brands, favouring both domestic and more dominant import brands both of which we anticipate seeing in 2020.
“Increased tariffs and the dominance of domestic wine sold through the online and DTC channels has already put pressure on import brands in the US market and these current shifts will further the pressure on exporters to the US market.”