The wine category in 2019 - just-drinks predicts

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In just-drinks' wine review of 2018, we looked back at the last 12 months for the category. But, what's in store for 2019? We take a look into our crystal ball to predict the biggest news and trends for the year ahead.

just-drinks gives its forecasts for the year ahead in wine

just-drinks gives its forecasts for the year ahead in wine

Private equity to keep comin'-a-knockin'?

Two wine acquisitions by The Carlyle Group stole the headlines in 2018, with the private equity group snapping up Accolade Wine and majority control of Grupo Cordoniu. Much as the wine sector has long had a reputation for being less about profits, more about aesthetics, Carlyle's double entry will likely highlight wine to its private equity peers. Will there be a private equity pile-on into the category in 2019?

The Chinese also at the M&A table

The keenness of Chinese investors to buy into wine is nothing new. Indeed, there's a raft of French chateaux in Chinese hands, while Yanghe Distillery Co's purchase last year of a stake in Chile's VSPT Wine Group proved the attraction is not limited to just the Old World. This latter transaction, however, sets the context: In November, just-drinks' spirits commentator, Richard Woodard, predicted that the spirits category should prepare itself for the diversification of its Chinese brethren, many of whom have long limited themselves to one brand and one market. With this diversification will come M&A activity, Richard forecast.

There's every likelihood that China will also see wine as a category worth getting even deeper into on a global basis this year.

Get into cannabis - now

The cannabis explosion affecting the drinks industry last year resulted in a remarkable flurry of activity from the likes of brewers and soft drinks producers. The wine category, much less so. In September, our wine commentator, Chris Losh,  flagged this low level of activity in wine, warning that the sector is dangerously exposed to the cannabis tidal wave.

"De-stigmatised, chic and available in multiple formats, cannabis is a major disruptor for the wine world in one of its most lucrative markets - the US," wrote Chris. "The volume end of the wine category, consumed in non-food-related occasions - think blush Zin, Pinot Grigio, Prosecco et al - could be under serious threat."

This year, then, wine producers would be wise to - at least - look at getting their own slices of what will certainly be a competing segment or - at best - plough some R&D cash into combining marijuana and wine in a product with both mass appeal and an acceptable pricepoint.

Brand names to jump category borders

The wine category is all-too-aware of the threats from other drinks categories, In the US, for example, spirits has been eating into wine's (and beer's) alcohol market share for quite some time now. Many brand owners have woken up to this challenge by sweating the asset of an established brand name and branching out into neighbouring categories. Think, Smirnoff Cider from Diageo or Brown-Forman's Jack Daniel's Tennessee Cider.

Accolade Wines had a go in late-2017, launching Echo Falls Summer Berries Vodka in the UK. I've been told that, since launch, the iteration has surprised Accolade in its popularity. In the search for growth, then, we can expect more brand owners to look beyond their borders. Could moves outside of wine be joined by moves into wine?

Here's Brexit

Finally, it's (almost) here. Two-and-a-half years since voting to leave the European Union, the UK is poised to start its next chapter at 2300 GMT on Friday 29 March. The cries from the business community for certainty are deafening right now. Will those cries fall silent at the end of March? With no transition agreement in place yet, that's doubtful.

More specifically for the wine world, the writing has been on the wall for the UK market for some time, with the country no longer considered as exciting a place to do wine business as, well, almost everywhere else. My suggestion? Over the weekend of 30-31 March this year, take a read of Chris Losh's forecast that Brexit will be a disaster for wine (written the week after the referendum in 2016) and see if he was right.

just-drinks Review of the Year 2018 - December Management Briefing

Sectors: Wine

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