Fine Wines/Champagne and Spirits in Germany

PROSPECTS

High-income individuals drive fine wines/champagne and spirits

In 2019, Germany’s economy revealed signs of slowing down which generated fear of recession among the population in general. However, among the higher-income residents, consumption of luxury alcoholic drinks remains firm and healthy with signs of growth in the forecast period.

Generational shift pushes sales of luxury brandy and cognac down

Among fine wines/champagne and spirits, only luxury brandy and cognac is performing negatively, while other categories are increasing at good rates. Luxury brandy and cognac is not expected to return to positive current value growth until the second half of the forecast period.

Consumers develop connoisseur skills and social status

In Germany, there is an increasing trend towards individuals becoming connoisseur-like and investing time and money in the art of understanding fine wines or whiskies. The trend is developing due to the accessibility of information via the internet and the increase in knowledge.

COMPETITIVE LANDSCAPE

LVMH Moët Hennessy Louis Vuitton SA loses steam

LVMH Moët Hennessy Louis Vuitton SA enjoys great exposure in fine wines/champagne and spirits due to the presence of several distinct brands in its portfolio. Consumer trust in the company is significant as five of its brands rank among the top 10 in fine wines/champagne and spirits overall in Germany.

Increasing competition shortens the gap with the leading player

In 2018, major brands were able to narrow the gap with the leading player in fine wines/champagne and spirits in Germany as their total value sales increased. Healthy growth in fine wines/champagne and spirits is leveraged by the vast majority of brands’ growth which intensifies competition and investment to reach the top.

Smaller players control the majority of fine wines/champagne and spirits sales

Despite significant consumer awareness of the top and best-performing brands, smaller brands play a big role, dominating a great proportion of value sales of fine wines/champagne and spirits. This situation is expected to persist as craft alcoholic drinks increase their preponderance within consumer choices.

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