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Australia and New Zealand are two of the best-known New World wine-producing countries, but while both benefit from considerable popularity at home, markets such as Vietnam, South Korea and Germany offer room for growth.
CGA research tools paint a vivid and constantly expanding global wine market. Such vibrancy represents an exciting opportunity for Australia and New Zealand’s wine industries to expand their reach beyond domestic borders.
According to CGA’s latest ‘OPUS’ data, Italy boasts the highest rate of on-premise consumers who prefer wine, with 45% of the country’s drinkers choosing wine when out. Indeed, positive levels of consumers who drink wine are registered across the globe – particularly in Australia and New Zealand, as well as a number of key European wine-making and -consuming countries.
Some of these markets, however, show challenging degrees of acceptance of foreign wine, especially those with a solid wine-making heritage. Mediterranean regions – France, Spain and Italy, for instance – are generally more reluctant to go for imports, even more so if they originate from the New World.
Great Britain (GB), Germany and some Asian markets, on the other hand, are less hesitant to embrace imported wine, therefore these offer the greatest market potential for Australia and New Zealand’s brands. CGA data show that fewer consumers drink wine in Vietnam and South Korea yet at the same time, these markets boast the highest proportion who are upping their wine consumption. This suggests these markets could experience noticeable growth over the coming years. Indeed, while 21% of Vietnam’s on-premise users drink wine, just under 40% claim they drink it more frequently than a year ago. Similarly in South Korea, 17% of on-premise visitors are wine consumers, but almost one in four has been imbibing more of it over the past 12 months.
Varied demographics…
Australian and New Zealand’s domestic markets tend to be dominated by older residents of suburban and rural areas. In Australia, 67% of wine drinkers are aged over 35, with a large percentage – 21% – over 65. The figures increase dramatically once consumers of domestic and New Zealand wines are singled out, as up to 43% are 65-plus, while just 15% are below the age of 35.
Consumption of domestic and Australian wine in New Zealand, meanwhile, is even more markedly defined by the older demographic, as up to 54.4% of drinkers are aged over 65. GB and Germany show similar demographic trends and while this segment represents a small proportion of consumers, opportunities still remain to entice them into the category across English-speaking and European markets.
In Vietnam, Australian and New Zealand wine consumers are disproportionately younger [77.1% and 85.6%, respectively]. Remarkably, 22.4% of wine drinkers in New Zealand are below the age of 24. Meanwhile, South Korean drinkers are generally middle-aged urbanites. Income and average spend in the on-premise differ across markets too. In Australia, wine drinkers’ personal income and expenditures are lower than the average consumer, likely reflected by the lower cost of domestic product compared to imported labels. Conversely, income and monthly spending tends to be higher in GB, Germany and South Korea.
… and varied interactions
Wine-drinking occasions are generally uniform across these markets, with imbibers tending to favour the late afternoon or evening hours. Looking at local eating behaviours and cuisines to tap into the dining occasion could become a potentially lucrative export strategy for wine producers.
Unlike the time of consumption, however, consumers’ motivations to engage with the category diverge considerably across markets. When out of home, the average Australian, New Zealand and British drinkers order wine mainly to enjoy themselves, relax and socialise with peers. Meanwhile, around 30% view wine as a ‘treat’ or something to be ‘savoured’.
In Germany, savouring and treating oneself are key elements of the wine-drinking experience. These factors play a role in other markets too, yet nearly 29% of South Koreans also look at wine as a celebratory drink, while 20% order it to ‘energise’ – all elements that can be integrated into a brand’s communication and advertising strategies in this vibrant, growing market.
To succeed abroad, brands should be prepared to supply wines with wide-ranging price tags. Vietnam and New Zealand’s on-premise consumers are keen on premium bottlings. Between 12% and 15% of Australians look for mid-priced range wines of between AUD20 and AUD35 [US$13.24 and $23.18]. Similarly, about 60% of South Korean consumers spend KRW4,000–KRW15,000 [$3.02–$4.53] on a single glass of wine, yet a significant 19.1% is willing to pay upwards of KRW20,000 per serve.
In Australia and New Zealand, consumers are particularly price-sensitive, as around 40% look for bottles that they feel are worth the cost. At the same time, however, more than one in four say they are primarily interested in the liquid’s perceived quality, while some rely on the reassuring effect of familiar brands.
Value for money is of paramount importance across export markets too, but Vietnamese and South Korean consumers are more inclined to trust the name on the label: up to 30% choose their wine based on the varietal’s perceived quality and reputation. While this might represent a challenge for lesser-known wines, it can turn into an opportunity when targeting the large share of consumers who trust staff, menu or peer recommendations, particularly in Vietnam, where 27% of on-premise users trust their friends’ advice.
A matter of style
Most wine drinkers consume both red and white wine, but suppliers should be aware of regional tendencies. GB on-premise visitors display a slight predilection for white, with 60% choosing it compared with 50% red and 38% rosé. Rosé displays comparable levels of acceptance in Germany, but red and white are more uniformly consumed.
On the other hand, South Korea is characterised by a marked inclination towards red wine, with nearly 74% of people drinking it as opposed to a smaller, yet significant, 58% ordering white.
When it comes to grape varieties, drinkers are significantly more selective. Around 25% of Australia and New Zealand on-premise users look at the grape variety when ordering wine, while in Vietnam the figure’s 27%. There, some of the most popular white grape varieties are Sauvignon Blanc and Chardonnay, while the most sought-after red varietals include Merlot and Tempranillo.
Australian wine ranks fifth in Vietnam, sixth in South Korea and seventh in Germany, while New Zealand ranks ninth in Vietnam and South Korea, and 11th in Germany. In countries that are still relatively unaccustomed to Australian and New Zealand wine, a deeper understanding of grape variety trends is paramount to developing efficient sales strategies. Providing consumers with varietals they resonate with can help them familiarise with lesser-known wine regions and generate sufficient brand trust to lure them into different wine styles further down the line.
Looking inward
To further complicate export challenges, a wine’s origin often affects consumers’ decision-making process. It’s a key factor for 36% of drinkers in Germany and one in five in Vietnam, South Korea and GB. In Australia and New Zealand, where consumers show a considerable thirst for domestic wine, a quarter state that origin is a crucial consideration.
Indeed, while exports show ample potential, the domestic markets display margins for growth too. Forty-three per cent of all Australian on-premise users choose wine, with 25% consuming it more frequently than a year ago and 63% about the same. Similarly, in New Zealand, almost 18% of on-premise drinkers have increased their wine consumption over the past 12 months.
New brands tend to be introduced in the two Antipodean countries’ on-premise through carefully designed by-the-glass programmes. This is because compared with European and Asian markets – such as GB, Italy, Spain and Vietnam – Australian and New Zealand consumers are keener on by-the-glass than by-the-bottle consumption. In fact, 75% of Australians order by the glass, while only 40% choose bottles. In New Zealand, over 80% opt for single serves and just 30% bottles.
Not only does Australia and New Zealand’s bias towards by-the-glass provide ample opportunities to introduce new labels, but the relative affordability of single serves may also motivate people to trade up more easily.
This article has been available to Global Drinks Intel subscribers since May. For details on how to join them, please click here.
