The remarkable growth of wine consumption in China is set to increase by over a third to nearly $23bn over the next five years, reveals new data commissioned by Vinexpo from IWSR.
With consumption of still and sparkling wine forecast to reach 192 million 9-litre cases by 2021, China will be propelled into the second most valuable world wine market behind the USA.
The country’s consistent annual growth was revealed in 2016 when the value of the Chinese wine market jumped by 8 million cases (value of $1.29bn) to $15.24 bn. The growth was driven exclusively by still wine; sparkling wine declined marginally.
China is currently ranked fifth in value for still wine after the USA, France, Germany and Italy. By 2021 China is expected to overtake Italy as the fourth largest market for still wine.
Demand for premium wine will also account for growth in value of 13 million cases over the next five years. This will cement it position as the world’s second largest market for premium wines.
Red wine is by far the most popular colour with China forecast to drink an additional 24 million cases of red wine by 2021.
Vinexpo comments that wine is the hottest category in China and young people are entering the category en masse. Wine offers a modern, sophisticated drink, and, for women, a more stylish option than beer. “As China grows richer, displays of knowledge and education are replacing wealth as an indicator of status; wine is expected to be one of the main beneficiaries”, says Guillaume Deglise, CEO of Vinexpo.
Together, the USA – valued at $33.87bn in 2016 – and China are expected to drive a recovery in the global wine market, says Vinexpo.
Local Spirits dominate
Locally-produced spirits dominate world consumption and China is no exception where spirits such as Baiju make China one of the top five spirits consumers.
However, measured as a share of pure alcohol, consumption of Baiju is so high that a significant increase is unlikely.
Nontheless, since 2011 while consumption of national spirits has declined a drive to premiumisation is apparent and premium Baiju will benefit.
The US and China will be key drivers of the premium trend to 2021. Combined, they are expected to add a further 30m cases in ‘premium+’ spirits, compared to a global increase of just over 46m.
The top 5 premium+ growth market performers are: the US; China; UK; Russia, and Mexico. Over the next five years China is expected to be a key driver of the premium trend in Baiju, Gin and Tequila. Cognac is forecast to show overall growth in the period.