Fine Wines/Champagne and Spirits in Indonesia

PROSPECTS

With ban on alcohol rejected category looks to bright future

In 2017 there was a proposal to ban the sale of alcoholic drinks in Indonesia, but this was rejected by parliament. The government recognises the importance of tourism to the future of the Indonesian economy and the banning of alcoholic drinks would likely have a significant impact on inbound arrivals, with many foreign visitors likely to be put off visiting.

Fine wines on the rise as availability increases

Fine wines posted the most dynamic current value growth within fine wines/champagne and spirits in 2019. This was supported in part by the growing number of bars/pubs and lounges/clubs that specialise in fine wines/Champagne.

The search for experiences stands to benefit category sales

With younger adults placing a greater focus on experiences this stands to benefit sales of fine wines/Champagne and spirits, with consumers showing a growing willingness to spend money on socialising with friends and family. This desire for experiences is encouraging entrepreneurs to open bars and lounges to cater to this new demand which is only expected to grow as incomes rise.

COMPETITIVE LANDSCAPE

LVMH dominates with portfolio of prestigious Champagne brands

LVMH Moët Hennessy Louis Vuitton SA maintained its dominance in 2018 with it offering a portfolio of well-known and well-established brands. These include the popular and prestigious Moët & Chandon, Veuve Clicquot and Dom Pérignon brands of Champagne, as well as its Hennessy XO brand of cognac.

Distribution expanding but internet retailing yet to take off

Grocery retailers remains the dominant distribution channel for fine wines/Champagne and spirits, as until relatively recently consumers were only able to buy alcoholic drinks either through store-base retailers or through the on-trade. Nevertheless, a growing number of online retailers are now present in the market offering a range of alcoholic drinks with the option of home delivery.

Education key to the development of fine wines/Champagne and spirits

Tasting events are a popular marketing tool used for promoting sales of fine wines/Champagne and spirits in Indonesia. These events are seen as a popular social occasion for wealthier consumers in Indonesia, while they also present the opportunity to educate potential customers.

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