In 2020, total volume sales only recorded marginal growth for wine, compared to positive growth of 4% the previous year. This weaker level of growth was due to a decline in on-trade volume sales, with the impact of COVID-19 in the country leading to an on-trade decline of 24%.
In the on-trade, the largest product area of still light grape wine saw one of the most significant hits in 2020, with its growing momentum from recent years abruptly halted some venues closed, and many consumers avoided open establishments. Interestingly, when it came to retail sales, still light grape wine and white wine were the only areas to underperform in the off-trade compared with the previous year.
With the growth of micro-breweries continuing to take place in Latvia across the review period, wineries, which were mainly producing non-grape wines, were gaining strong growth before the quarantine. During the lockdown period, many of these players moved to online retailing, enabling them to continue growing through offering safe delivery services to consumers.
As total volume growth in 2020 was significantly impacted by the closure of the on-trade, and consumers avoiding these establishments, total volume growth is set to be more positive in 2021. However, while on-trade will post a recovery, it will continue to be dampened by ongoing rules and regulations in place due to the outbreak of COVID-19.
Fostering the wine culture that was developing in Latvia prior to 2020 will be key to success over the forecast period. To this end, the use of technology and e-commerce could be an advantageous way of engaging with, and appealing to younger adult drinkers in particular.
Due to the country's rising health and wellness trend, the consumption of strong alcoholic drinks is expected to be in decline across the forecast period. As such, products that contain a stronger ABV, such as fortified wines, are expected to be challenged, while non-grape wine and light wine record positive growth.
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