Wine in Switzerland

PRE-COVID-19 PERFORMANCE

Wine continues to lose popularity amongst local consumers in 2019 due to rising health consciousness and limited interest from millennials

Wine continued to lose popularity amongst Swiss consumers in 2019, with another year of declining demand through both off-trade and on-trade channels. Whilst beer has managed to adapt to consumers’ changing demands in terms of health consciousness, leading to the development of non or low alcoholic options, this is more difficult for many wineries to develop as it involves dealcoholisation facilities that are too expensive for independent producers with small production capacity.

Local wines, climate change and harvests

Imported wines are facing increasing competition from local options, as Swiss consumers who continued to enjoy drinking wine regularly sought products from domestic vineyards rather than choose lower-priced imported wines. This is leading to the increasing share of domestically-produced wines.

Schenk SA retains leadership of fragmented competitive landscape in 2019, experiencing increasing pressure from private label

While wine tends to be relatively fragmented in Switzerland, 2019 witnessed increasing consolidation amongst the leading producers and distributors. Furthermore, there has been an increasing trend towards domestic wines in Switzerland and thus a growing share of Swiss wines in the local retailing landscape, with this trend expected to grow over the years.

2020 AND BEYOND

COVID-19 impact

On-trade volume sales of wine are expected to fall by 28% in 2020 in light of the impact of COVID-19. This compares to an expected drop of 1% forecast for 2020 during research conducted in May 2019 (before the spread of COVID-19).

Affected products within wine

Lack of celebrations during lockdown, particularly due to social distancing measures with a ban on the meeting of more than five people from 20 March, reduced demand for the formerly positively performing sparkling wine through off-trade. This resulted in Q2 declines for champagne, and stagnation for other sparkling wine as the latter still offers greater affordability for small family celebrations at home.

Recovery and opportunities

As lockdown measures are gradually eased and horeca establishments reopen in Switzerland, local consumers may remain cautious at first before regaining greater confidence to venture outside of the home environment to socialise, driving a significant upturn in demand for wine through the on-trade channel in 2021. This trend will however, have a negative impact on sales of wine through off-trade as they venture outside of the home environment after being forced to spend long periods of time at home.

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