LONDON--(BUSINESS WIRE)--Technavio analysts forecast the global wine market to reach a global consumption of more than 30 billion liters by 2020, according to their latest report.
The research study covers the present scenario and growth prospects of the global wine market for 2016-2020. The report lists still wine and sparkling wine as the two main segments of which still wine accounted for more than 83% of the total market in 2015.
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Technavio food and beverage analysts highlight the following four factors that are contributing to the growth of the global wine market:
- Mergers and acquisitions in the market
- New product launches
- Increasing wine production
- Increase in marketing and promotional activities
Mergers and acquisitions in the market
Vendors are currently opting for M&A strategies to increase their global presence and expand their product portfolio and consumer base. Vendors are also able to focus more on product innovation and increase their profit margins by collaborating with each other. Also, companies are making acquisitions to improve their positions with their wholesalers and also to gain entry into new markets. For instance, E. & J. Gallo acquired many small wineries in 2015 and 2016 to extend its market share in the global wine market.
New product launches
According to Manjunath Reddy, a lead analyst at Technavio for alcoholic beverages research, “Another factor driving the growth of the global wine market is the new product launches in the market. In today's competitive world, the product life cycle is getting shorter, and the players in the market are under pressure to come up with new products to remain competitive and also to satisfy the increasing consumer needs.” In June 2016, Gik, a Spanish company, launched a new wine and the company claims that it is the world's first blue wine. In June 2016, actor Tituss Burgess launched a new wine under the brand name Pinot Noir. The partnership between the National Wine Centre, Botanic Gardens of South Australia, and Jacob’s Creek winemakers is launching a new botanic garden wine label in September 2016, and the product is claimed to be world’s first wine produced solely from grapes grown within a botanic garden.
Increasing wine production
One more growth driver of the market is the increasing wine production in developing countries and new markets. The consumption of wine is increasing around the globe, and it is mainly due to the increasing consumption of wine by the younger generation. To meet the increasing demand, players in the market have increased wine production around the globe, and this is expected to continue during the forecast period. In 2015, global wine production was about 274.4 million hectoliters, an increase of about 2% compared to 2014. The total wine yard area is also increasing around the globe, and this factor is also helping to increase the production of wine.
EMEA dominates the global wine market. However, APAC is expected to be the fastest-growing during the forecast period and is expected to increase its market share during the period.
Increase in marketing and promotional activities
The alcoholic beverage market in the US is driven by the increased number of marketing and promotional activities of the vendors. Most market vendors are large-sized firms that have international businesses. As a result, these vendors have sufficient capital to invest in promotions to build their brand image of their beer, spirits, and wines to increase customer loyalty.
Competition in the market is increasing and many companies are launching new varieties of alcoholic beverages to gain a competitive edge in the market. Companies are also engaging in aggressive marketing tactics to break through this competitive clutter. However, restrictions and regulations from regulatory bodies on the marketing and advertising of alcoholic beverages pose a challenge to the vendors' strategies at times.
In April 2014, AVP Pro Beach Volleyball Tour announced its partnership with Barefoot Wines. As part of the partnership, Barefoot Wines appeared on court, in national television advertising, and at special on-site activities during all seven of the AVP’s tournaments across the US. Also, Barefoot Bubbly will be the toast of choice for all post-tournament championship celebrations. Similarly, wine brands are increasing their presence in every major music festival. In 2015, Jamieson Ranch Vineyards sponsored five music festivals under the “Taste the Music Tour” sampling program. In North America, wine manufacturers spend about 53% of their advertising budget on sponsoring entertainment activities.
Browse Related Reports:
- Global Alcoholic Drinks Market 2016-2020
- Global Alcohol Ingredients Market 2016-2020
- Global Alcoholic Beverage Packaging Market 2016-2020
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Technavio is a leading global technology research and advisory company. The company develops over 2000 pieces of research every year, covering more than 500 technologies across 80 countries. Technavio has about 300 analysts globally who specialize in customized consulting and business research assignments across the latest leading edge technologies.
Technavio analysts employ primary as well as secondary research techniques to ascertain the size and vendor landscape in a range of markets. Analysts obtain information using a combination of bottom-up and top-down approaches, besides using in-house market modeling tools and proprietary databases. They corroborate this data with the data obtained from various market participants and stakeholders across the value chain, including vendors, service providers, distributors, re-sellers, and end-users.
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