The still wine market, although outpaced in growth by sparkling wine, remains the dominant force in the wine industry, with an estimated global value of USD 293.5 billion in 2024, out of a total wine market of USD 353.4 billion according to Statista.
This predominance is expected to continue into 2025, but the market faces significant challenges that could impact its stability, from inflationary pressures to shifts in consumption patterns and uncertain policy landscapes.
Inflation’s Continued Influence
Inflation remains a primary force reshaping the global wine market. Even though inflation shows signs of cooling in certain Western markets, it continues to impact consumer purchasing power and spending behavior in key areas such as Japan and the Asia-Pacific region. As IWSR – International Wine & Spirits Research reports, inflation reduces household purchasing power, which in turn impacts consumer choices, making the still wine market particularly sensitive to economic fluctuations. Consumers in regions hit hard by inflation may lean towards more affordable or “value” wine options, while inflation-driven cost-of-living pressures in other areas could shift demand toward occasional, premium, or “affordable luxury” purchases.
Moderation Trends: A Boost for Premium and No & Low Alcohol Wines
An additional trend impacting the market is a growing preference for moderate drinking, particularly among younger generations. This shift is driven by rising health consciousness and the increasing acceptance of non-alcoholic or low-alcohol alternatives. These no & low-alcohol wines, which have improved significantly in quality in recent years, are expected to continue gaining ground as social acceptance of moderation rises, and as no-alcohol alternatives lose their previous stigma. This trend suggests a potential for growth within the premium wine sector, as consumers opt for high-quality, lower-quantity choices, in line with a "less is more" consumption philosophy.
Political and Policy-Related Uncertainties
Beyond inflation and consumption changes, the global still wine market is subject to potential shifts from political and policy changes, notably in the United Kingdom and the United States. The UK’s reform of alcohol taxation, scheduled for February 2025, could prompt pricing shifts, especially for mid-range products, depending on how the excise duty changes play out. In anticipation, some brands have already adjusted by launching mid-strength wines to meet potential demand for lower-alcohol content offerings at more accessible price points.
Meanwhile, in the United States – the world’s largest wine market – recent concerns about a resurgence of tariffs under former President Donald Trump’s new policies loom large. During his previous administration, tariffs on EU wine imports, with the exception of Italian wines, affected demand. Should new tariffs come into play, the market could see significant price adjustments, potentially curbing demand for European still wines and shifting preferences toward domestic or non-EU imports.
Additionally, ongoing geopolitical conflicts, particularly in Ukraine and the Middle East, further contribute to a global economic climate of uncertainty. These conflicts not only raise operating costs for global logistics but also impact the cost of raw materials and overall supply chain stability.
The Changing Landscape of Key Wine Markets
Over the past decade, the landscape of the most attractive markets for still wines has evolved, though the United States has remained consistently at the top. This market resilience is a testament to the nation’s robust wine culture, consumer base, and purchasing power. In 2024, Canada, Switzerland, and Norway also feature prominently as top markets, with the UAE making an unexpected appearance at number five, thanks to the country’s burgeoning business tourism sector. Conversely, some traditional markets, such as Germany (currently at position 12) and Japan (at 13), have been hit harder by inflation and economic challenges, contributing to lower rankings.
China’s dramatic decline, moving from a top-five position between 2015 and 2020 to rank 17, is notable and reflects broader economic shifts. The country’s post-COVID economic slowdown has cooled its once-expansive demand for imported wines, particularly impacting mid- and lower-tier imports.
Future Trends and Outlook
IWSR’s analysis underscores that inflationary pressures and changes in consumer habits will continue shaping the market, with particular impacts on the still wine segment. The hospitality sector, while recovering from the pandemic, has faced rising operating costs, impacting its ability to fully bounce back, particularly in the nightclub and high-turnover restaurant sectors. However, the emergence of more informal, early-evening social occasions has presented new opportunities for wine consumption in less traditional settings.
Looking to the future, the trend toward moderate drinking, policy-related uncertainty, and inflationary pressures will likely spur innovation across the wine industry. Brands may respond with lower-alcohol options, more accessible pricing, and premium offerings aimed at quality-conscious consumers who are buying less but choosing more carefully.
Source: WineNews