Half-year figures: wine exports resist Corona
Chris Yorke, CEO of the Austrian Wine Marketing Board (AWMB) comments: “So far, our wines have performed well in export, which of course makes us very happy! Unfortunately, we are not yet able to extrapolate a prognosis for further developments, as the global situation remains too uncertain”. He adds: “As always, it is intriguing to take a closer look at individual export countries; so far, Germany and Switzerland have demonstrated positive growth. In the USA we have indeed suffered downturns, but far less severely than the wine exporters France or Germany”.
Germany & Switzerland driving sales
In fact, export figures vary significantly depending on the country. Austria’s two most important export markets, Germany and Switzerland, performed particularly well in the first half of 2020, with sales volume increases of 14.3% and 31.3%, although revenue rose less dramatically, showing growth of 0.4% and 3.5% respectively. In Germany, Austria is doing much better than other wineproducing nations: according to their Federal Statistical Office Destatis, Italy lost 2.8%, France 9.6% and Spain even 12.9% of sales volume over the first half of the year in Germany.
USA: Austria more stable than France, Germany & Spain
While Austria’s wines in the United Kingdom recorded a slight retreat in volume (-3%) but a significant drop in revenue (-26.9%), declines in the USA in volume (-9.4%) and revenue (-11%) were closer together. According to the market research institute Gomberg, Fredrikson & Associates, Austria has thus far gotten off far more lightly in the United States than the wine exporting nations France (-37% volume, -55% revenue), Germany (-21% volume, -42% revenue) or Spain (-45% volume, -59% revenue). Italy has fared best so far in the USA, maintaining consistent volume with a loss of only 1% in value.
Positive development in the monopoly markets
The Nordic countries Sweden (+27.6% volume, +52.9% revenue) and Norway (+25.5% volume, +17.2% revenue) experienced very positive development. Canada, whose wine market is – like in most Scandinavian countries – controlled by a state alcohol monopoly (except for the province of Alberta), also saw strong growth of 58.9% in volume and 47.7% in revenue.
“It turns out that Austrian wine has remained an attractive product category in places where a variety of distribution channels were open – more attractive than wines from much bigger wineproducing nations. That speaks for the extraordinary quality that our growers bring to the market year after year”, says Yorke with notable satisfaction.
Austria: retail grocery & online wine trade post gains; increase in home consumption
A tendency has been confirmed on the domestic market that had already become evident since the lockdown: the latest feedback from retail grocery and e-commerce wine trade reports good rates of growth, not only in the entry-level segment, but also in upper price ranges. In addition, according to a consumer survey performed by the market research institute GfK, domestic consumption of Austrian wine rose by over 20% from January to May.
Hospitality industry remains uncertain
However, these increases cannot compensate for the fact that approximately 23 million litres of wine – around a third of the average figure for six months’ volume – could not be sold during lockdown by the hospitality industry. Figures from the relevant wholesale sector also indicate a decrease of some 30% in volume for domestic wine in the first half of 2020.
Generally speaking, the hospitality industry remains the weakest link in the chain, as it is dramatically affected by the measures taken against the spread of the pandemic Corona virus. While the situation in rural areas is currently somewhat more relaxed, customer capacity figures on the inner-city scene are quite low. The coming winter is a matter of particular concern, as it will exert considerable influence on the economic fate of many winegrowers and restaurateurs.
Tourism: appreciable differences between town & country
Tourism has always been a central factor in domestic sales of Austrian wine; this year the industry has been obliged to accept major declines due to the Corona virus: according to the Austrian National Tourist Office, there was a significant decrease in both arrivals (-43.2%) and overnight stays (-33 %) from May to August. There is also a large disparity between town and country. According to projections of the tourism authority, in the month of August the decline was most pronounced in Vienna (-71.5% overnight stays). While the state of Lower Austria (-18.4%) also experienced a downturn, there was even a small increase in overnight stays in Burgenland (+6.8%) and in Styria (+4.1%).
In some winegrowing regions, a currently healthy level of bookings means that winegrowers and restaurateurs can breathe just a bit easier, looking into the autumn.
Chris Yorke: diversification minimises risk for wine producers
“The situation of Austria’s winegrowers currently depends heavily on which and how many channels they use to market their wines. This demonstrates how effectively a diversified distribution structure – utilising multiple channels – minimises risks. This path should be chosen even more consistently moving forward”, summarises Mr Yorke.
The 2020 harvest: the coming weeks are critical
Favourable conditions for a good harvest can be confirmed, although the weather in the next few weeks is critical. Yorke shares the suspense of Austrian winegrowers across the country, who are currently busy harvesting their grapes, saying “I hope that autumn will now show its best side, and that our growers can bring a fine 2020 vintage into the cellar”!
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