2021: Predictions for a Year in Wine
1. Customers will become increasingly demanding.
The pandemic will feed through to the wider economy in 2021 as businesses, governments and consumers come to terms with the disruption of the past year. That won't mean that customers will stop drinking (or spending)...but they will be increasingly demanding. Well invested brands, with differentiated products and authentic stories will thrive...the "me too" players will struggle.
That won't mean that customers will stop drinking (or spending)...but they will be increasingly demanding.
2. Online is hear to stay.
DtC has been the growth engine of the industry for the last decade. In 2020 multiple additional online models have come to the fore as American's finally embraced the idea of buying wine online. Sure it took a global pandemic but in April 10 years of channel migration happened in 30 days. The chances are that if you are a wine lover you've either bought wine online or had a close friend that has. And for millions the discovery is that buying direct, online is convenient, great value and opens up a whole universe of choice. Expect online penetration to continue to grow in 2021
Sure it took a global pandemic but in April 10 years of channel migration happened in 30 days
3. That quarterly wine shipment might start to look expensive.
2021 could be the year that Napanomics bite. With consumer uncertainty building the justification for that $1,000 a quarter shipment will start to be hard to find. Expect the trend of falling bottle prices in the DtC market to continue, and volume growth be extremely hard to find in the $50+ category.
4. Independents will feel the squeeze.
Smaller independent producers have had a tough 2020. Lockdowns have hit crucial winery direct sales hard, and the near shutdown of the restaurant trade has closed off another key market for quality smaller producers. In 2021 I'm sure we will get back to eating out...but the on-trade will take years to recover to 2019 levels, and more cash strapped restaurants will seek the easy option of supply via big distributors. Competition for shelf space in the multiples will be fiercer than ever. To thrive independents will need to focus on what sets them apart: great wine and great stories...and look to alternate routes to connect with the consumer.
5. Some balance restored on the supply side.
2020 was a year of extremes. It opened with a near record level of unsold wine sitting on the bulk market. At some points through the fall some people would have you believe there wasn't a drop of wine in CA. In 2021 pricing will come back down in the bulk market as sellers remember they have over-supply from 2016, 2017 and 2018 in their cellars, and that wine consumption overall hasn't grown much (if at all) in 2020...even if some segments and players have.
In 2021 pricing will come back down in the bulk market
There we go. 5 chances to look foolish next year.
Leaky bucket plugger.
3 年I think tasting/sample gift boxes will bring in new customers and subscriptions will be the go-to to keep 'em coming back.
Driving Growth for DTC Brands | Generated $800k+ via Email & SMS Marketing
4 年One prediction for me is e-commerce is going bom in 2021
CRP Wine Trade Solutions - "Building Your Brand from the Store Shelf to the Vineyard"
4 年Good Stuff Nick. While wine consumption is relatively flat, I believe your spot-on, online prediction will foster growth in the millennial and younger. The trick will be how to transition from comfort brands to new labels. Congrats on your successes these past few years. See you on the bike in April??
SVP @ Invisible Technologies | AI for Enterprise
4 年Good thoughts, Nick! Speaking of Napanomics, I’m interested to see the extent of smoke taint from the 20 vintage and any market effects (more rose?!)
Chasing a little white ball while living out my passion for connecting people and adding value to quality brands.
4 年Interesting read! I am excited to follow along with a glass in hand and check in on those predictions! All the best for 2021!