A tale of two virus experiences- Wine Intelligence

Contrasting data from Canada and South Korea demonstrate how coronavirus can have significantly different impacts on attitudes and behaviour

As with many other wine markets, Canada’s regular wine drinking population were on a roll prior to the onset of the global Coronavirus pandemic. While they weren’t increasing the amount of wine they drank, they were becoming more enthusiastic about spending more money on the wine they did buy, and enjoying it at more social and formal occasions, either in-home or at a restaurant.

The arrival of coronavirus has, predictably, disrupted this trend. With lockdown restrictions in place, and social activities not possible, Canadians have broadly maintained the amount of still wine they buy while cutting back on sparkling wine and liquor, according to our new Canada Covid-19 Impact Report. They have also reverted to spending less on a bottle of wine for all occasions.

Previous social occasions among Canadians have broadly been replaced, one-for-one, by new occasions such as catching up with friends online or having more meals round the dinner table with family (including wine), or even sneaking a drink or two in during the day.

Thinking about the future, Canada’s regular wine drinkers are showing a lot of caution about returning to their old social lives. Unlike other markets, where younger consumers are straining to get back into the swing of things, Canada’s younger wine drinkers share the reluctance of their older peers to go out and meet with other people at bars, restaurants and events. The Canadian on-premise sector may have to wait longer than other countries for their trade to return in earnest.

By contrast, South Korea must be one of the few countries that can say it has had a ‘positive’ virus experience so far. The lack of negative impact on people’s everyday lives can be seen in the data in our South Korea Covid-19 Impact Report, also released today. In contrast to Canada, Koreans appear to have taken the pandemic in their stride. Almost two thirds of imported wine drinkers say they intend to return to a restaurant when permitted (in Canada, this is under 19%). Neither do consumers in this market appear concerned about stepping onto a plane or going to the cinema – again, in stark contrast to Canadians.

However, the South Korean wine drinker has taken the onset of the virus and associated restrictions to reduce their wine drinking. While Canadians maintained their wine drinking – albeit with lower spend per bottle – Koreans have bought less wine, and spent less per bottle, during the pandemic. This parsimony is consistent across age, gender and even involvement groups. Highly engaged wine lovers have slightly increased their consumption but have significantly lowered how much they spend on a bottle.

One explanatory factor for this lack of a boost for wine during the pandemic is the absence of the internet as a factor in purchasing. Unlike other markets (including some Canadian provinces), South Korea does not have a functioning online wine retail channel, as this is still prohibited by government legislation. The prospect of having to shop for wine in a physical store (along with other everyday food and beverage needs) may have reduced the temptation to indulge in extra wine buying.

Assuming that no major recurrence of the virus besets the market over the next few months, the likelihood is that South Korea’s wine market, and particularly its on-trade channel, will bounce back quite rapidly from the trough of March and April. This will be a welcomed development for wine producers who have had success over the years in this market and bodes positively for other markets where public health measures have been more successful.

Canada’s on-premise channel does not look so fortunate. The level of reluctance among Canadian wine drinkers to re-engage with social activities in bars and restaurants will be a significant drag on the wine sector’s recovery post-pandemic. It may also halt, at least temporarily, the 10 year trend in Canada towards trading up to more expensive, interesting and aspirational wine.

Author: Richard Halstead