Germany experienced a decline in wine consumption last year, as reported by the German Wine Institute (DWI) based on an analysis by NielsenIQ.
The data revealed that wine purchases dropped by four per cent, while the revenue generated from wine sales declined by five per cent. Notably, domestic wines suffered more than international competitors, with German wine sales decreasing by five per cent and revenue by six per cent.
Key Factors Behind the Decline
DWI Managing Director Monika Reule attributes the downturn to several factors, including demographic changes, evolving consumer preferences, and increased cost-conscious purchasing behavior due to economic uncertainties. "Last year, four per cent fewer households bought wine and paid particular attention to the price," Reule explained.
As financial pressures mounted, German consumers displayed increased price sensitivity. For the first time since 2010, the average price of both domestic and international wines dropped slightly, by four cents per litre. However, price differences between German and foreign wines also influenced purchasing decisions. On average, German wines were priced at 4.47 euros per litre, while international wines remained slightly cheaper at 3.72 euros per litre. This price gap led to a modest shift in demand toward imported wines.
Market Share Shifts and Consumption Trends
The decline in domestic wine consumption affected the overall market share of German wines. In terms of sales volume, German wines saw their market share drop by one percentage point to 41 per cent, while their share of revenue fell to 45 per cent. Among foreign competitors, Italian wines maintained their leading position with an 18 per cent market share, while Spanish wines dropped to 14 per cent (-1 percentage point), and French wines saw a slight increase to 11 per cent (+1 percentage point).
Beyond retail purchases, the overall wine consumption balance in Germany, including out-of-home consumption, showed a per capita decline. Germans over the age of 16 drank an average of 22.2 litres of wine in the last wine year, 0.3 litres less than the previous year. Sparkling wine consumption also fell, with per capita intake dropping by 0.2 litres to 3.6 litres annually.
Outlook for the Wine Market
The reported wine consumption trends cover the two-month period from August 1, 2023, to July 31, 2024, encompassing the total German market volume of 15.9 million hectolitres of wine and 2.6 million hectolitres of sparkling wine. While economic factors continue to influence purchasing behavior, the long-term trajectory of Germany’s wine market may also be shaped by broader shifts in lifestyle preferences, sustainability concerns, and evolving consumer tastes.
As the industry navigates these changes, German winemakers may need to adapt their strategies to maintain competitiveness, focusing on price adjustments, marketing efforts, and innovations that align with consumer expectations in an increasingly dynamic market.
Source: DWI