The number of people in Germany purchasing wine has continued to fall in the first quarter of 2024, marking the sixth consecutive quarter of declining buyer reach.
This trend, reported by the German Wine Institute and based on data from market research institute NielsenIQ, shows a persistent decrease in the number of households buying wine, with German wines being disproportionately affected.
Buyer Reach and Volume Losses
In the first quarter of 2024, just over 34 percent of German households bought wine, a six-percentage-point drop compared to the first quarter of 2019. Excluding the anomalous spike during the COVID-19 pandemic in 2021, market researchers have observed a steady decline in buyer reach of one to two percentage points annually over the past five years. This diminishing buyer base is identified as the primary cause of the continuing volume losses in the wine market.
Despite fewer households purchasing wine, total spending on wine has slightly increased. This paradoxical trend is attributed to higher spending per purchase, suggesting that while fewer people are buying wine, those who do are willing to spend more.
Sales of German vs. Foreign Wines
The detailed sales data reveals divergent trends between domestic and foreign wines. Sales of foreign wines have risen by two percent, while German wines have suffered a 1.5 percent decline. This shift highlights a growing preference among German consumers for international varieties over local options.
Notable Trends in Specific Wine Categories
- Spanish White Wines: After a remarkable increase of over 40 percent in the first quarter of 2023, Spanish white wines have experienced a significant drop in value by around 31 percent in the first quarter of 2024. This sharp reversal underscores the volatility in consumer preferences.
- Italian Wines: In contrast, Italian wines have seen impressive gains. Rosé wines from Italy have surged by almost 42 percent, while red wines have grown by 12.4 percent in value. This robust performance indicates a strong and growing interest in Italian wine varieties among German consumers.
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New World Wines: Wines from regions outside the traditional European producers—often referred to as New World wines—have seen a marked decline in interest. The value share of New World rosé and white wines fell by about 30 percent, and red wines by nearly 22 percent. This trend suggests a potential shift back towards Old World wines, or possibly a narrowing of consumer choices in a tighter economy.
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German Wines: Within the German wine segment, there are mixed results. The purchasing value of German white wines has increased by 3.3 percent, indicating some resilience and continued appeal. However, German red wines have not fared as well, with their value dropping by more than 13 percent.
Implications for the Wine Industry
The continued decline in the number of wine buyers in Germany presents significant challenges for the domestic wine industry. Producers of German wines, in particular, must navigate a shrinking market share amidst growing competition from international wines. The increase in spending per purchase could be seen as a potential area for leveraging higher quality and premium offerings to sustain revenue despite falling volumes.
For international producers, the mixed performance across different categories suggests that market strategies need to be nuanced and responsive to shifting consumer preferences. The substantial gains in Italian wines, for instance, point to the effectiveness of appealing to changing tastes and perhaps broader marketing efforts.
Source: Wein.Plus