After an unusual summer season where wine volumes are expected to climb as more Swedes choose to stock up on bag in box and head out to the islands, the market will revert to its long-term trends – and the problems of engaging young adults in the wine category
In Sweden, July 1st is traditionally the day when out-of-office email bounces hit their peak. Big cities empty out and a myriad of islands in lakes and in the Baltic sea fill up with Swedes taking full advantage of good weather, long days and the opportunity to relax for up to four weeks.
Thanks to coronavirus, this year will be slightly different. In normal years, airports will have filled up with Swedish tourists on their way to the Mediterranean and beyond. In 2020, domestic tourism is predicted to take a bigger share of the cake thanks to the restrictions surrounding air travel. It may be also that some social distancing will be practised on the islands (some of which are tiny), though Sweden’s regulations on this matter are a lot more relaxed than other countries, at least at time of writing, and local commentators reckon that government “recommendations” are unlikely to be followed very closely.
It is likely that the domestic tourism boost, plus the relief of getting to the summer holidays amid all the coronavirus gloom, will boost wine volumes consumed in Sweden in 2020 for the first time since 2015. Bag in box sales are expected to benefit the most, which is likely to drive the net price per bottle equivalent down, again reversing a trend of the past five years to trade up in price and quality.
However, the longer-term trend evidence suggests that this Covid-related change is unlikely to be sustained. As we detail in our new Sweden Wine Landscapes 2020 report published today, businesses should plan around some of the fundamental changes in the wine consuming population and their attitudes to the category.
As with some other key markets, Sweden has been on a path towards drinking less, but higher quality alcohol for some time – particularly driven by the younger, urban, influencer consumers. In the particular case of Sweden, the policies of the alcohol retail monopoly, Systembolaget, have fostered this trend. Swedes have shown increasing knowledge of the wine category, and consumers are more willing to go up in price points to expand their repertoire, experience new wines, and embrace concepts such as organic wines, which now account for over 1 in 5 bottles sold in this market.
However, this is not the only story. Swedes have evolved the wine culture beyond taking a glass with food, and non-food occasions have been growing over the past few years. Perhaps related to this, Swedish consumers have learned to embrace the sparkling wine category. Volumes of sparkling wine have grown overall by 60% in the past five years, with the biggest beneficiary being Prosecco, whose volumes doubled to over one million cases between 2015 and 2019.
On a less positive note, younger Swedes are not engaging with the wine category as strongly as 10 years ago. A combination of a growing culture of moderation and excitement coming from other beverage categories such as beer and gin means wine is more and more reliant on older drinkers. This does however present a potential future opportunity for not only alternative wine options (low and no alcohol) but also alternative packaging formats, particularly non-glass alternatives in smaller serving sizes than traditional bag-in-box.