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Analysis - Will lower-alcohol wines avoid withering on the vine?

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Why have lower-alcohol wine brands struggled to establish themselves? And, what regions offer the biggest potential for growth for the segment?

Lower abv wines remain a niche element of the market

Lower abv wines remain a niche element of the market

These questions are explored in a new report from market research firm Wine Intelligence. As 'healthy choices' has become a buzz term for consumers in many categories, the lure of 'healthier' wines has yet to attract a critical mass of consumers. “This is surprising considering the increased awareness of alcohol-related health concerns and growing consumer demand for healthier products as well as an influx of government initiatives promoting social responsibility,” the report says. 

So, what gives?

Stephen Lacey, Wine Intelligence's research manager, points out that, from a legislative view, the market is still “fragmented and complex”. Lower-alcohol wines lack a “unified defintion”, he adds. In the EU, for example, a wine must have an abv of between 8.5% and 15%. While in the US, a wine can have an abv of anything between 7% and 22%. And, in Canada, wine with an abv of 9% of lower can be referred to as 'light'. 

Another reason, the report notes, is concern around the quality of lower-alcohol wines and how they are produced. Competition from other drinks categories, meanwhile, is also having an impact, the report suggests. Brewers, for example, are stepping up their efforts to produce low alcohol variants to target today's wine drinkers.

Even so, there is plenty of potential for the wine world. France and Canada are identified as the key regions for potential growth for reduced strength wines, out of the eight markets examined in the study (the others being the UK, US, Germany, Sweden, The Netherlands and Belgium). In 2013, France had 9.19m buyers of the category, which has risen to 12m in 2014. The country still has 18.45m wine consumers who are yet to be tempted by the low abv category.

In Canada, there were 5.65m buyers in 2013, which has fallen to 5.1m in 2014. However, the number of “potential” buyers – ie consumers who are open to buying – has risen from 2.9m last year to 3.5m this year.

The US remains the biggest buyer of lower-alcohol wines. The country saw a rise in buyers from 33.8m in 2013 to 37.8m this year. However, Wine Intelligence notes, the perception of low abv wines as being of “inferior quality” is still a “major barrier” in the country. 

So, what makes someone buy a lower-alcohol wine? In the US, unsurprisingly, the largest proportion, 45%, said 'taste' was the motivating factor. Behind that was “better for my health” (33%), closely followed by “I will be driving” (31%). Some 25% said “less calories”. 

Part of the reason for the shift to reduced alcohol brands is government policy and campaigns around responsible drinking. This is particularly the case in the UK, where the Government's Public Health Responsibility Deal is aiming to remove 1bn alcohol units from the market by December next year. Tax incentives for lower-alcohol products have also helped.

Wine producers, it appears, still have a job to do to convince consumers that lower-alcohol wine can match the quality of more traditional strength varieties. Yet, with the growing number of health-conscious consumers, it is clearly a segment worthy of a sustained focus.


Sectors: Wine

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