While on-premise restrictions and the loss of foreign tourists represented major setbacks for Spain’s wine sector, the COVID era is having a positive change in Spanish attitudes towards wine
How was 2020 for wine in Spain? Ask restaurants owners and wineries dependent on this sector, the answer is, predictably, bad or very bad. For the manager of online wine sales in a major supermarket group? Astoundingly good year, from their point of view. But even this range of answers can vary depending on whether the question was posed during the worst months of the pandemic or during more hopeful ones. Overall, 2020 for wine in Spain was an emotional and business rollercoaster.
Spain, a country with fewer than 40 million adults, welcomed 83.5 million foreign tourists in 2019, more than USA, China, Italy or any other country bar France*. Many of these tourists were drawn by a vibrant bar and restaurant life, a channel representing more than 50% of Spain’s wine market by value before the pandemic**.
The loss of tourists is one of the main explanatory factors why wine volumes in Spain fell in 2020. The fact that more Spaniards drank wine at home during 2020 could not make up for lack of tourists and the on-trade closures. The maths simply don’t add up for Spain as it does in markets less reliant on inbound tourism, such as Sweden or the UK for example.
Fortunately, the news is not all bad. Our latest evidence from the Spanish wine market suggests that 2020 has brought 3 positive developments in terms of consumer behaviour:
- Emergence of wine as the ‘relaxing drink at home’. Wine was not forgotten by consumers; instead, it adapted to a more appropriate occasion: a relaxing drink at the end of the day alone or with close family.
- Consumers continued to treat themselves during the pandemic. Sure, consumers were not dining out as they did before, but consumers compensated by moving some of that discretionary spend to informal and formal dinners with a partner or close family at home during 2020.
- Younger consumers entered the wine world earlier. This is particularly relevant as younger consumers in Spain are notoriously late starting to consume wine compared to other markets. During the pandemic, younger consumers were more exposed to wine than they would otherwise have been if bars and discotheques were open.
And perhaps the most striking emerging habits is in where consumers buy their wine with the number of consumers buying wine online doubling in Spain during 2020.
This fact begs two follow up questions: Who are they? In conversations with e-commerce practitioners, their view is that new consumers are mostly the ones who previously bought in shops and have migrated their behaviour – “we see an increase of sales for power brands such as Protos or Marques de Caceres” according to one e-commerce practitioner. Our evidence points to the same direction. New online consumers come from all ages and genders, but show a significant bias towards supermarket buyers. So those who built their brand in the physical world will also be benefit from this transition to the online world.
Will they continue buying online? This remains an open question at time of writing, though our view aligns with that of many in the e-commerce world: the online sales genie is out of the bottle, and will continue to make headway. The same e-commerce practitioner tells us their expectation is for further growth, “but at a +25% level” (their online sales grew 50% in 2020).
2020 was mostly a year to forget for the Spain wine market as it depends a lot on tourists and the on-trade, but these emerging consumer habits could shake negative domestic consumption habits incorporating new occasions, new consumers and new ways of buying wine.
* Source: UNWTO World Tourism Organisation 2019
** Source: Interprofesional vino de España/OeMv 2018