In spite of regulation and taxation issues, lower alcohol wines are drawing a crowd in key markets
Producing great lower alcohol wines, generally accepted to be wine with alcohol levels below 10.5% ABV, can be a bit of a labour of love. It’s tough to produce wines that taste great with less alcohol – especially reds – and often costs more than producing the standard “full fat” version. Also, the tax system in Europe distorts the category, by incentivising the production of very low alcohol wine products of 5.5% ABV and below, at which point the product quality all too often fails to meet even modest expectations.
And yet there appears to be a growing consumer demand for wines that come in a bit “lighter”, or lower in alcohol, as consumers increasingly try to balance their desire for a drink with concerns for health and wellbeing.
In the first piece of research of its kind, Wine Intelligence has investigated the consumer needs of consumers in the lower alcohol category in Canada, Denmark, France, Germany, Sweden, Switzerland, UK and USA. The multi-market report released this week by Wine Intelligence reveals that across these 8 markets 38% of wine drinkers are identified as lower alcohol wine buyers (buying wine in the sub 10.5% ABV category). This amounts to over approximately 80 million wine drinkers, with USA and Germany currently leading the way.
The key factors driving purchase of lower alcohol wine across the majority of the markets are the perception of it being better for health than regular strength wine and avoiding the intoxicating effects of alcohol. For most consumers, it would appear that lower alcohol wine is not going to take the lion’s share of their spending – instead, lower alcohol wines perform a supporting role in their portfolio, meeting the needs of occasions for which the need to stay in control and look after their health are more salient.
Further momentum in this sector will come from targeting the potential buyers – those who currently don’t buy in this category but are open to the idea. This group currently represents 16% of the 8 markets or 35 million regular wine drinkers / wine drinkers. Although lagging behind in terms of current usage of lower alcohol wine, France is a key wine market for potential drinkers, with almost the same amount of potential consumers (24% of wine drinkers) as current buyers (25%). In the 3 categories of lower alcohol wine explored in the report (1%-5.5% ABV, 6%-8.5% ABV and 9%-10.5% ABV) France is consistently the market with the highest proportion of potential buyers.
Of course, lower alcohol wines still have some way to go until they are recognised as mainstream products. Just under half of wine drinkers were identified as non-buyers who not only didn’t buy but were also not open to the idea. Poor quality and taste perceptions of the products are the main barriers for this group. More telling is the non-buyer group reporting a lack of awareness and understanding of the product category as a whole. If the lower alcohol sector is to continue to grow and one day become a mainstream product, campaigns which fill this gap in the consumers knowledge and change negative perceptions will be key.