Social factors can impact greatly the demand for wine

It is generally accepted that global wine demand is affected by changes in the habits and preferences of wine drinkers. This article aims at giving more details about these social factors that can decrease wine demand both locally and globally.

You can click here to access the article examining the social factors that have the capacity to increase demand in the wine market.

When consumer preferences are changing

Over time, consumers’ preferences for wine tend tp shift. For instance, rosé has gained a lot of popularity recently, particularly in the USA. In a same vein, Prosecco sales have surged dramatically in regions like the UK and the USA. Prices will grow if supply cannot keep up with demand; however, the expansion of the Prosecco Denominazione di Origine Controllata (DOC) area has raised supply while restraining price increases.

When younger people drink less wine

In some countries, younger people (a category ranging from legal drinking age to mid-thirties) consume less wine. This could be due in part to their perception of wine as an old-fashioned drink that their parents or grandparents consumed, and their preference for other alcoholic beverages. In countries such as the United Kingdom, younger people are also spending less time in bars, preferring to communicate with their peers through social media.

When health concerns hit wine demand

Younger drinkers are becoming more conscious of the harmful health impacts of alcohol, which has led to lower wine consumption. Health-related government campaigns, such as the Loi Evin in France (a French law drastically limiting the promotion of alcoholic beverages), have been linked to a considerable decrease in wine consumption.

When changes in lifestyle impact wine consumption

Modern lives are busy and frequently provide little time for the lengthier meals that were previously associated with wine consumption. Additionally, while drinking wine at lunch has long been a custom in many nations, businesses are increasingly forbidding employees from taking alcohol during the workday.

When reputational shifts become an important factor in wine demand

Any negative criticism on social networks, from influential magazines, renowned journalists or any other authority in the world of wine can damage the reputation of a region, a producer or ‘a particular wine. Although it can take years for prices to be affected, a loss of reputation or a scandal involving a particular appellation can have long-term effects that may be difficult to change. Some effects may take a little time to be felt but are nonetheless catastrophic.

As cheaper wines disappeared entry customers are switching to other alternatives

Many traditional wine-producing countries produced, sold, and consumed enormous amounts of inexpensive wine on a local level. Certain countries have implemented measures to curtail excess production (especially targeting cheap wines), leading to a decrease in the quantity of these wines that are obtainable. Some consumers have simply shifted to other, less expensive alcoholic or non-alcoholic drinks in place of purchasing more expensive wine.

A shift in spending habits might have disastrous consequences.

Some countries are considered price-sensitive markets when it comes to wine demand. In these countries, consumers, even the more affluent ones, are not willing to spend more than the lowest price possible in order to buy a given wine. The most famous examples of price-sensitive markets for wines are Germany and the UK.

In these markets producers operate within a narrow price range. As a result, competition is often intense. Customers therefore pay less.

Another consequence is that producers are often reluctant to pass on increases in production costs to consumers in price-sensitive markets because they fear losing markets to competitors.

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