> 2020 – What happened? At the start of the pandemic, I gave a gloomy but not catastrophic assessment of what to expect in the market for beverage alcohol. Unfortunately, much of it turned out to be accurate, although there were some areas that did better than expected. The severe shock to on-premise sales unfolded as feared – wholesaler depletion data shows on-premise sales ended the year down 56%, and restaurants’ share of all wine sales declined from around 17-18% to 6%. Off-premise retail sales did spike, even more than anticipated, with staggering increases in online sales. The initial online surge was majority retailers’ websites, virtual retail and delivery apps; but wineries made up ground as the year went on. Winery direct-to-consumer sales were mixed, with tasting rooms (of course) way down, but clubs holding up and ad hoc sales increasing. Not so for craft beer, which suffered a brutal year due to their dependence on keg sales via restaurants, bars and tap rooms. What didn’t happen? After some initial chaos, the distribution system did not seize up or slash purchases as badly as feared (some imports and tariffs aside). The recession was for most industries short and not too deep, without a domino effect. The Federal government got its act together to pump the economy monetarily and fiscally and the election of Biden locked that in for the short term and provided steadier policy. For the most part, the product trends from pre-pandemic continued throughout. Hot categories like Tequila, Prosecco, hard seltzer, Sauvignon Blanc, Oregon Pinot Noir, and small containers continued to lead growth. Weak categories such as White Zinfandel, jug wines and mainstream big brand beer lagged.
> The Emerging Post-Pandemic Drinks Economy. The most recent Wine Market Council webinar featured a panel of me, Dale Stratton from WMC and SipSource, Professor Robert Eyler (SSU) on economics, and Dave Bratton (Destination Analysts), a leading tourism researcher. There was general agreement that the return of on-premise sales and tourism will be gradual and patchy, but pent-up demand is there and spending per trip or restaurant visit will be up dramatically by the end of the year. (Here wine is favored as its demographic was less impacted by the pandemic recession). Online sales will only partially recede, and will stabilize at a new, much higher base demand than in 2019. Economic scars from the pandemic will linger in logistical bottlenecks, reduction in the number of products stocked, and shortages of skilled on-premise labor in some areas.
> Annual UC Davis/Organisation Internationale de la Vigne et du Vin sponsored Wine Marketing Course is coming up – every July I manage and teach in a weeklong course that gives industry members and entrants a complete, practical road map to marketing wine in the U.S. We cover everything from product/package conception through importing and distribution down to consumer aspects. It features lectures by experienced speakers from all over the industry. This year’s course, like last year, will be online. For details, go to UC Davis OIV course.
> Tea, Cheese & More: consumer research, structural analyses and sensory research all show distinct parallels between a number of food and beverage categories, including cheese, beer, cider, chocolate, olive oil and wine. These are all products with a wide range of flavors and prices, that have big, brand driven or commodified low ends and a long tail of fragmented, artisanal high ends. While the details of flavor, logistics and costs differ, many of the key issues in consumer adoption and distribution strategy are similar. I will be giving a lecture on just this topic for a UC Davis Global Tea Institute course in June. Meanwhile, I’ll be spending time brushing up on my tea sensory and distribution knowledge.
> Wine Market Council Appointment– I was honored to be appointed Research Director of the Wine Market Council in the Spring of 2020. The Wine Market Council is a non-profit organization with members from all tiers of the industry, including importers, retail and suppliers. Its mission is to carry out fundamental consumer research to give members, and the industry as a whole, a better understanding of the major trends and most promising new products and markets. Members get access to regular webinars and all research data. Full Glass Research will continue to do projects in the wine, beer, cider, cheese, tea and similarly artisanal, flavor-driven categories.
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