With the publication this week of our latest two COVID-19 Impact Reports for Portugal and France, Wine Intelligence’s Luis Osorio and Jean-Philippe Perrouty reflect on the consumer insights, and broader economic context, revealed by the reports
Portugal and France represent two of the oldest, most involved and highest per capita consumption markets in the world, where wine is affordable, widely distributed and a historical habit. As such, one would expect a similar consumer behaviour pattern during lockdown. However, data is showing some significant contrasts – for instance, Portuguese consumers are decreasing their consumption while French consumers appear to be drinking more. We asked Wine Intelligence market directors Luis Osorio (Portugal) and Jean-Philippe Perrouty (France) to explain.
What is driving this disparity in consumption trends – Portugal down, France up?
LO: I would say that at a first level, the main driver for such disparity is probably economic. Portugal is a poorer economy which experienced a very severe recession during the global financial crisis, and therefore the French purchasing power is significantly higher. In both markets wine is similarly inexpensive so the price of a decent bottle relative to purchasing power might be significantly more favourable for the French. And at an unprecedented time of crisis and confinement, regardless of culture, that might have been a major reason.
JP: Regarding purchasing power, it may have had an impact indeed. In France, lots of businesses used the furlough scheme during lockdown, for about 10-11 million French employees. In this system, they were made temporarily redundant though kept earning in the region of 85% (sometimes more) of their net wages. And as in Portugal, wine in France is very affordable. About 7% of French wine consumers say they have stopped drinking wine during the lockdown. Among the 93% remaining wine consumers, we notice a slight increase in frequency of consumption, despite a huge drop in social occasions – though 1 in 2 say they have drunk wine in social settings during the lockdown… which was theoretically forbidden. I guess it could have been social situations with the people you live with, but I wonder if younger people in particular have been ignoring some of the social distancing rules.
LO: Same story in Portugal regarding more social occasions, which registered the most significant drops. In the opposite direction, Portuguese wine consumers seem to have taken a liking to ‘lockdown-specific’ occasions for wine drinking, with over half of consumers enjoying drinking wine at least once a week – particularly whilst having lunch / dinner at home or whilst having a better than usual evening meal with their families / partners.
Have new non-social, at-home occasions emerged in France as well?
JP: Findings in France suggest that a mix of both traditional and ‘new’ occasions of consumption have compensated for loss in social occasions, especially drinking wine with a better than usual meal with partner / informal lunch / aperitif on Skype, WhatsApp etc. Funnily enough, the consumers locked down with kids are the one with the biggest frequency increase – as someone in this position myself, this does not surprise me. Also among 18-35 year old wine consumers: about 2/3 of them say they have drunk wine in social settings during lockdown!
We talked about price of wine vs purchasing power. Are there other underlying drivers in Portugal?
LO: In Portugal, in 2019 and 2020 we started to finally see the moderation trend hitting significantly with very interesting findings published in February´s Portugal Landscapes 2020 report. During lockdown, consumers were at home in ‘saving mode’ and maybe also looked at wine as a something to cut out partially, so they consume less alcohol, which benefits their health, instead of looking at wine as the lockdown treat like we see in the US, the UK or in France.
What was the impact of the pandemic and lockdown in the online channels?
JP: Evidence so far from the panel data about sales in France suggest healthy growth for wine sales in the click & drive channel, though from a small base.
LO: Online wine-buying channels have been the biggest winner of the lockdown in Portugal, with the desirable, younger, affluent wine drinkers leading the way for internet purchasing, but still from a small base as well. I guess in this case, Portugal and France might be more similar. Wine is widely distributed, easily accessed and not expensive, so the online channel hasn´t been able to find a significant share yet. Lockdown was just the opportunity this channel was waiting for. I have some more qualitative feedback from people I know in Portugal doing their first online shop ever. I expect this channel to start developing a bit faster.
Looking ahead, how are consumers thinking about the future?
LO: Positively for the wine category, a significant proportion of Portuguese wine consumers do look forward to treating themselves to a better quality wine post lockdown, but the future priority seems to be spending less money and boosting savings and there seems to be quite a feeling of reduction in terms of treat-like priorities in the near future. But one thing I have learned about being Portuguese, is that we tend to look ahead very cautiously and from a half-empty glass perspective.
JP: Well, unlike the Portuguese, French consumers are expressing a strong need to go on holidays and to go to the restaurant. And I suspect wine consumption during at-home social events will probably pick up again now that government restrictions are being relaxed. It will be more difficult for on premises as consumers sometimes express a wish to avoid crowded places, such as bars. Regarding spend, the general mood is not about spending more, on the contrary: economic outlook is looking very uncertain and saving money is amongst the top priorities.