Wine in Germany

2021 DEVELOPMENTS

Wine consumption habits altered by impact of pandemic

Off-trade volume sales of wine returned to declines in 2021, in line with a longer-term trend, which was only briefly interrupted in 2020, when consumption occasions strongly switched to the home in the first year of the pandemic. On-trade sales only witnessed a modest recovery in 2021, as foodservice outlets remained subject to pandemic-related restrictions, such as only opening for takeaway services in the first quarter of the year, and with food and drinks allowed only for consumption at outdoor terraces from late March.

Rise of still rosé wine and sparkling wine helps maintain volume sales in mature category

As consumers continued to seek to treat themselves at home due to the trading restrictions affecting foodservice, they increasingly opted for premium wine, thereby contributing to the rise in unit prices for the category through off-trade in 2021, notably for sparkling wine and still light grape wine. Germans also became increasingly interested in learning about various types of wines, their history and provenance, which continued to drive premiumisation.

Robust performance of largest brand amid erosion of private label from discounters

Although private label holds the highest combined volume share in wine, it continued to gradually lose ground in 2021. The private label ranges of the two largest discounter chains, Aldi Einkauf GmbH & Co oHG and Lidl & Schwarz Stiftung & Co KG, which occupy the top two spots in the competitive landscape, due to the prominence of discounters as the largest distribution channel for wine, experienced declining share as discounters faced an erosion of its lead against the rise of e-commerce.

PROSPECTS AND OPPORTUNITIES

Younger Germans expected to drink less wine than older generations

Off-trade wine sales are predicted to stagnate over the forecast period, as growth is expected to remain undermined by unfavourable demographic factors. The wine drinking population in German is skewed towards older generations, while young adults, including millennials and Generation Z, increasingly adopt healthier lifestyles, notably by drinking less alcohol.

Focus on local provenance positioning and sustainability strategies

Despite the overall maturity of wine, the long-term trend towards home entertainment, the growing popularity of home delivery services as an alternative to cooking, and the rising interest in food pairings are likely to remain key drivers in helping consumers become more knowledgeable about still light grape wine, thereby sustaining growth in off-trade value sales.

Rosé and still wine set to be driven by wider assortment of German wine, while vermouth is expected to reach a new audience

Still rosé wine is expected to continue to record solid growth in off-trade volume sales and to benefit from a rise in the offer of German rosé wine, although its performance will remain closely dependent on summer meteorological conditions, as consumption is higher during hot and dry weather. Still white wine is also expected to record positive growth, supported by premiumisation efforts by German vineyards, notably with brands seeking to offer a more distinct positioning associated with drinking occasions such as celebrations to target a younger audience.