Ireland story image 180x180 - Ireland: a post-COVID wine renaissance?

Ireland’s wine market looks like it will emerge stronger after a year of pandemic and lockdowns, despite the twin blows of on-trade restrictions and loss of tourism revenues

It seems strange to sound a positive note about the Covid-19 pandemic of 2020 in the context of anything, let alone the wine business in Ireland. As with other markets, Ireland’s economically significant hospitality and tourism industries have been decimated by lockdown restrictions and lack of air travel over the past year, and the effects of this crisis will be felt in bars, pubs and restaurants throughout the nation for some time to come, especially in tourism hotspots such as Dublin. The consensus among market experts seems to be that it will take 3-5 years for Ireland’s restaurant trade to recover from COVID, assuming lockdown restrictions are eased by the middle of the year.

And yet at the same time, Ireland’s wine trade has largely weathered the storm, and, in some cases, seen remarkable business growth. Importers and distributors with the agility to pivot away from on-trade towards retail channels and their own direct-to-home business have had a good year, as have those who have worked positively with hitherto successful restaurant businesses to set up pop-up wine and food retail or takeaway and delivery businesses.

More fundamentally, Ireland’s wine drinkers have used the enforced stay-at-home rules to indulge in their wine habits – both drinking more and drinking better. While the whole story in terms of wine sales in 2020 is still to be written, the anecdotal evidence suggests that the category experienced no overall loss of volume because of the shuttering of the on-trade – if anything, the market may have expanded in volume terms in 2020. At the same time, the trade is reporting increased interest in higher value wines, and also in more diverse styles and origins. Trade respondents mentioned that their Pet-Nat, organic and natural wines have been moving well in recent months, as has their more special interest products from more niche origins such as Portugal, Germany, Austria and Greece, as well as more mainstream offerings from Chile and Spain.

In the mainstream retail channels, Chile remains top dog, with leading brands Santa Rita and Casillero del Diablo consolidating their hold, along with Australian brands Wolf Blass, Yellow Tail and McGuigan. Spain is undergoing something of a renaissance, fuelled by new interest in established regions such as Rioja, and newer consumer discoveries such as Rias Baixas and Rueda. New Zealand is also a success story in 2020, with Villa Maria gaining significant ground in awareness in a market dominated by rival Oyster Bay. Brands appear to have benefited from government legislation outlawing the use of deep discount multibuy promotions, and the legislation allocating specific areas of supermarket floorspace to alcohol. In the eyes of some trade observers, this has led to a more conducive shopping experience, with underlying product and brand values given more opportunity to shine.

Ultimately, and not surprisingly, 2020 was the year of the online shopper in Ireland. While this group remains a small (but growing) minority of consumers, it corresponds to the high earning, high spending, educated urbanites who are increasingly influential in Ireland’s economy generally, and particularly in the wine market.  These consumers typically did not suffer as much economically during Covid, and have been sitting on unspent holiday and going out budgets, and in many cases they have applied them to buying more interesting and expensive wines online, including Champagne which staged something of a comeback in late 2020 according to several sources. Trade opinion is divided on the extent to which consumers will remain loyal to the online channel post-lockdown, but agree that Ireland’s wine drinkers are going to emerge from the pandemic as more educated and thoughtful consumers of the category.

Richard 180x180 - Ireland: a post-COVID wine renaissance?Author: Richard Halstead

Email: Richard@wineintelligence.com

 

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