Key trends for the alcohol category in 2018 - Focus

Euromonitor's senior alcoholic drinks analyst, Spiros Malandrakis, is on a roll: Hot on the heels of his consideration of the trends he sees shaping the spirits category this year, comes Spiros' thoughts on what's going to happen in wine.

Still light grape wine - Enter the dragon, as a shadow falls over the US

Historically, China might have been the proverbial dragon in the wine room, but it will be the accelerating transition from luxury towards the mass market that will inform the next chapter in its evolution- a development that will, in turn, shape the global wine industry, both in terms of supply and demand as well as in branding and positioning.

While red varietals will continue capitalising on the segment's already-established base in the country, rising levels of sophistication and the forces of westernisation will provide opportunities for alternatives to make inroads too.

Additionally, further reducing import tariffs and the intoxicating effect of free trade agreements will pave the way for the next wave of exporters that will follow in the footsteps of Australian wine's roaring success in China. Within that context, wines from New Zealand, Chile and Georgia will be next in line and deciphering their core offerings could hold the key to providing clues on the styles that will rise in popularity in the short to medium term.

On the other hand, and while the core US market appears to be in good health, anecdotal information suggests that the premiumisation narrative might be reaching its peak. Demographic pressures – the trailing Boomer effect and a Millennial demographic still unable to pick up the slack- could indeed lead to a gradual deceleration of premium offerings.

Could this be the first sign of a secular market change?

Cans, taps and blends for the Instagram generation

Wine will further shed its stuffy image to embrace democratisation in 2018. Canned formats - already spiking in the US - will lead the charge on the back of their portability, versatile character and durability credentials as well as due to the simple fact that younger demographics have already embraced them, in the case of craft beer pioneers. However, underlying industry conservatism, retailer pushback and distributors' relative lack of knowledge will still present barriers in the short to medium term.

Wine on tap will rise as the next contentious point of fierce debate: more efficient, environmentally-friendly and making higher-end options more affordable, draft wine has the potential to revolutionise on-premise rituals while raising accessibility levels.

Mellower, easily-pronounceable and generally-approachable red wine blends will retain their strong trajectories, even despite the vocal reservations of many wine critics. The same will hold true for balanced Merlots, dry Rieslings and fun, casual rose offerings while orange wine's Instagrammable appeal will further its reach beyond metropolitan centres.

The significance of the indulgence factor and the de facto blurring of category lines will also see a rise in cross-pollination initiatives like Bourbon barrel ageing – boosting flavour and richness in this way might prove to be a fad but it is a fad that will still have legs for a while longer.

Natural wine – a segment even more notoriously difficult to codify than craft beer- will enter the mainstream and even if it will not account for significant volumes, it will ultimately have an impact on transparency and low manipulation initiatives gaining traction across the entire industry.

Sparkling wines reaching out of their comfort zone

Champagne's much-vaunted direct correlation with macroeconomic developments can lead to downward pressures, considering the current levels of global political volatility and overdue and cyclical economic crises. Then, there is Champagne's  historical focus on the UK market, which will be going through the inevitable convulsions of the Brexit process.

Brut and non-dosage varietals will retain their dominance, but demi-sec variants could hold the key to raising penetration rates in new markets and demographics. Sugar-inclined palates could find them easier to approach while at the same time such products could help the category escape its aperitif limitations, work better alongside food pairings and even claim historical parallels harking as far back as Russia in the 1800s.

Champagne might be all about celebrating the art of blending but single vineyard and single plot offerings will gain traction with microvinifications providing an artisanal, terroir driven alternative to big brands - in a similar vein to micro-distilling.

But, as Champagne begins working in earnest on its approachability credentials, the journey for other sparkling wines will be in a diametrically-opposite direction. In the case of cava, the introduction of a new premium classification will attempt to cement the category's aspirational hopes, as Prosecco will focus on building brand equity while continuing to push its approachable premiumisation narrative.

Click here for more information about Euromonitor International's alcoholic drinks research.

Why 2017 has been the most dramatic year in living memory for wine - Click here for a just-drinks comment

Expert analysis

Finding Value in Alcoholic Drinks in Key Markets

Finding Value in Alcoholic Drinks in Key Markets

The new alcoholic drinks value shares model now available on Passport offers a new perspective on how companies are performing as well as positioned. This briefing looks at six key markets – the US, C...read more