Corona: first wine sales figures now available
Lockdown & loss of the hospitality industry
Some three quarters of Austria’s wine production is sold within the nation’s borders. 58% of the country’s total domestic wine consumption (about 137 million litres) can be attributed to the hospitality industry and events (as of 2019). With the closing-down of restaurants from mid-March, the most important domestic avenue for wine sales went on hiatus for two months. For a better understanding of the magnitude involved: for the period of the restaurant closure from mid-March to mid-May, an estimated twenty-three million litres of wine were not sold – a colossal volume, and a loss that will not be offset.
Since reopening: Austrians remain loyal to their wine
The hospitality industry in Austria was allowed to reopen on 15 May. It is too soon to make estimates concerning wine consumption since then; however, feedback from restaurateurs and sommeliers indicates that returning guests have not lessened their attention to domestic wine, but rather continue to order in a patriotic frame of mind. Price sensitivity varies: while guests at some restaurants choose their wine with more attention to what they are paying than before the temporary closure, customers at other restaurants do just the opposite and treat themselves. Flexibility regarding the wine accompaniments, active recommendation of Austrian wines (by the glass as well) and the confirmation of their great value for money support the guests in their selections, and encourage price acceptance.
In any case, the extension of curfew to 1.00 in the morning as of 15 June is eagerly awaited.
Export: increases until March, since then unclear
According to the first figures from Statistik Austria, wine exports – which have been rising steadily in recent years – also demonstrated a positive trend in the first three months of this year. By the end of March, export volume had increased by 7.5% compared to the same period in the previous year, while revenue from sales increased by 6%. EU countries and non-EU nations drove Austria’s exports to an equal degree.
With the global spread of the coronavirus pandemic, the conditions for exporting wine changed fundamentally. In any case, it is still too early to make reliable predictions; the situation with regard to the more than one hundred countries which now import Austrian wine is too diverse and complex. Information from winegrowers shows a variable picture, depending on the export country and sales channel. At the end of April, Pau Roca, director general of the International Organization of Vine and Wine (OIV), anticipated a global decline in wine consumption, a decrease in average prices and consequently a decrease in sales revenue and profits for wine producers. It remains to be seen how these evaluations will affect Austria’s wine exports in their various sales channels and price categories.
Wine sales in domestic trade increased
With the closure of the hospitality industry in Austria, wine sales were only possible – and to a limited extent – via trade channels (cellar door, retail grocery, retail wine merchants). In order to gain an insight into the development of the different sales channels during the lockdown phase in March and April, the AWMB has obtained the first relevant data from the market research institute GfK. There are some positive trends: 2,800 representative households surveyed reported that compared to the same period last year they had bought almost 17% more wine and spent 12% more on it. In addition, the frequency of wine purchases rose, as did the volume of wine per purchase.
Stability at the cellar door, retail grocery advances
Fortunately, the number of households that bought their wine directly from the producers remained stable compared to the previous year, according to the households’ reports. As expected, the Corona lockdown brought increases in the retail grocery sector, compared to March/April of the previous year: 7% more households reported that they had bought wine there.
Austrian red and rosé wine in great demand
Austrian wine seems to have benefited particularly, with sales growth of over 25%. In comparison: sales of foreign wines fell by almost 2% in the same period. The growth in sales of the Austrian red and rosé wine product group by almost 51% is remarkable, while white wine increased by more than 14%.
Less momentum in revenue
A bit of downside: total revenue figures, according to the households’ information, also point upwards, but to a lesser degree than volume does. Compared with the 25% growth in volume of Austrian wine sales, the 12% increase in revenue (compared with 10% for foreign wine) suggests that the additional volume sold consisted of wines in the lower price segments, which made for a decline in the average price. The revenue increase in sales of red and rosé wine of over 14%, in particular, lagged behind its volume growth, while revenue from sales of white wine, at just under 11%, grew only slightly less than volume.
Austrian Wine Marketing Board
Ms Sabine Bauer-Wolf
Head of Communications
Mr Georg Schullian
Teamleader Press, PR & Corporate Design