Alcohol market in France: letters of nobility and new trends

The alcohol market represents a significant part of the French economy. Indeed, between the Wines of Bordeaux, Burgundy, Alsace, Cider of Brittany, Calvados of Normandy, Cognac and pineau des Charentes, each region showcases flagship alcohol, appreciated by France and internationally. Wines and spirits account for some 721,000 jobs in France and export sales increased by 8.5% to reach 12.9 billion euros in 2017. However, per capita consumption of pure alcohol per litre in France decreased by 16%. However, these figures should be put into perspective depending on the type of drink. Technological and marketing innovations play a key role in the evolution of this market and consumer trends are constantly evolving.

Consumption habits shaken up

The health crisis has profoundly disrupted everyone’s lifestyle. The closure of bars and restaurants has had a role in the way alcohol is consumed. The first consequence is the postponement of consumption at home. Indeed, alcohol is part of social life for many people. Overall, consumption has remained stable, with 65% of French people saying they have not consumed more alcohol. However, according to a study published by Yougov in May 2021, 7 out of 10 consumers consume alcohol at least once a week during the pandemic. If consumers consume alcohol at home because restaurants and bars are closed, some are moving towards less strong alcohols.

Indeed, according to Yougov, three out of ten consumers have reduced their consumption of strong alcohol. At the same time, the average budget spent on alcohol has decreased. It went from 52 euros per month before the crisis to 47 euros. This represents a decrease of 5 euros per month. However, the crisis has not tarnished consumers’ impressions of certain brands. Among the most popular brands during the crisis, consumers cited Moët and Chandon, Leffe, Veuve Clicquot, Jack Daniel’s and Martini.

Alcohol consumption in Nouvelle-Aquitaine

According to the latest bulletin of Public Health France in 2017, 12.3% of people between 18 and 75 years old drink alcohol daily in Nouvelle-Aquitaine. At the same time, it is estimated that 45.3% of them consume it on a weekly basis. These figures show that the inhabitants of the Nouvelle-Aquitaine region still have an attraction for alcoholic beverages. Indeed, these data are higher than the overall average on the territory.

This consumption is also more carried by men and by the younger generation. Women are lagging behind with less consumption. Men are 19% to consume alcohol daily and 57.8% weekly. This alcohol consumption is driven in particular by cultural reasons. It must be said that Nouvelle-Aquitaine is renowned for its wine culture and good wines. Thus, the region is positioned as the 2nd region for weekly wine consumption among adults between 18 and 75 years old. In particular, they are 34.8%.

Covid-19, place to e-commerce and alcohol-free

According to IWSR reports (3), alcohol sales are expected to fall less than expected in 2020. After an estimated decline in sales of around 50%, professionals in the sector expect more of an 8% decrease worldwide. Based on the study of the 19 key countries in the alcohol market, IWSR expects sales to return to 2019 levels by 2024.

A result driven in particular by the development of online sales. In Australia, Brazil, China, France, Germany, Italy, Japan, Spain, the UK and the USA, sales in value terms increased by 40% in 2020. They therefore reach $ 17 billion and could reach $ 40 billion in 2024.

However, not all categories of alcoholic beverages are negatively impacted by the crisis. Thus, ready-to-drink drinks, like cocktails already made, show a growth of 43% in 2020. They are driven in particular by the strong growth of the segment in the USA. This trend can be explained by a change in consumer expectations. They are now looking for more refreshing, tasty and longer drinks to drink. Also, the ready-to-drink beverage segment could grow by 21.8% in volume between 2019 and 2024, stealing the place of beer.

On the other hand, wine and beer fell by 9% in 2020. Partly because of the crisis and have little chance of rising in volume for several years. However, low-alcohol or even alcohol-free beers are driving sales higher. They are in line with the trend towards moderation observed in recent years. It is therefore estimated that the sales volume could continue to increase by 5.9% between 2019 and 2024.

It should be noted, however, that despite these trends, and although the overall volume of pure alcohol consumed in France has been declining since the 1960s, France remains the sixth largest consumer of alcohol among the 34 OECD countries. (4)

An alcohol market energized by original alcoholic beverages

First, the marketing of the alcohol market is aimed at reaching new targets, especially the youngest. In addition, it tries to nibble market share to the competition (other beer brands, but also drinks for aperitifs and sodas).

The focus of the alcohol market in France, national exports of wines and spirits in 2017

For example, this is the case for beer. With more than thirty years of hindsight, beer is gaining its nobility. Consumption in France increased in the main markets (supermarkets, hotels and restaurants) by 2.7% in volume. It also increased by 8.1% in value for mass distribution in 2017. Special beers (non-alcoholic beers, light beers, tasting beers and flavoured beers) account for one third of sales. Between 2014 and 2017, the beer market grew by 17.3% in volume, while at the same time trending beers experienced a growth of 60.9%.

The extension of the ranges of alcoholic beverages is also the delight of companies, in the context of professional events.

Alcohol sales, a market for innovation and the evolution of traditions

The Covid-19 pandemic has been a trend accelerator. As a result, interest in more local experiences and products continues to grow in popularity, galvanized by the desire to support the local economy and preserve jobs. (7)

At the same time, alcohol consumers are paying more consideration to the impact of the drink on health. Younger generations in particular choose to drink in moderation. They then reduce quantities as much as opportunities, in favor of better quality alcohol. For more regular consumption, there is therefore an increase in the demand for soft or low-alcohol drinks. In the countries most fond of little or no alcohol, non-alcoholic beers nibble on market share over traditional beer. They could reach 4.45% by 2024.

Still in the trend of a more responsible consumption, the organic wine market continues to seduce. The leading countries in this segment in 2019 are Germany, France, the United Kingdom, the United States, Sweden and Japan. Accentuated by the health crisis, the quest for healthier and more ethical products should allow organic wine to gain market share.

In reality, this situation has an impact on the entire alcohol industry. Production of course, but also marketing, packaging, distribution…

France, producer of 20% of the world’s wine

In 2017, France exported about 200 million cases of wines and spirits, bringing sales to 12.9 billion euros, an 8.5% increase in the alcohol market. Wines with a controlled designation of origin and the enhancement of the terroir contribute to the increase in sales abroad.

A market that is not about to dry up, since according to an IWSR study for SudVinBio and Millésime Bio, sales of organic wines in France are expected to double by 2022, thus exceeding 200 million bottles. Sales thus confirm the second largest organic wine for France (16.4%) in the world. behind Germany (23.9%) and ahead of the United Kingdom (10.2%).

Printed light, image and attractiveness of products

Recently, theLuxe Pack show took place in Monaco in October 2018. It highlights the latest packaging innovations, especially around printed light. Companies such as Inuru (oled technology), Saralon (printing oled), Dapy (micro-leds technology) and Eurostampa (reflective label) presented their innovations to offer producers differentiating packaging. Thus, the focus is on the attractiveness within the shelves, and the valorization of the products.

Connected packaging, traceability and easy management

In addition, presented at the Luxe Pack show, NFC (Near Field Communication) chips are developing in packaging. Like Doogood (connected and bright luxury support for highlighting products); Delage capping (connected cap with bottle reader /recorder); Satab (e-ribbons connected to smartphones, heat and humidity sensors); MyPlanetPackaging (system for detecting and identifying packaging and product on capacitive screens); or in an eco-responsible register the company Billerudkorsnas and its biodegradable labels.

Between traceability, control and ecology, technology and packaging combine to offer added value to products.

The alcohol market in New Aquitaine, between know-how and prestige

Well established in Nouvelle-Aquitaine, the wine sector of the Nouvelle-Aquitaine region employs 54,100 people in 14,000 establishments. It ranks 1st among the wine regions of France with 228,000 hectares of vines. It also covers 93% of total employment in the sector. Which is concentrated in the Bordeaux-Aquitaine and Charentes-Cognac basins.

For the first time in 50 years, the area of vineyards devoted to Cognac will expand by 5%. Indeed, the export of Cognac exceeded 200 million bottles in 2018 (up 3.5% compared to 2017) for a total turnover of 3.2 billion euros. On the other hand, cognac consumption is higher abroad, particularly in the United States and China, than domestics. An economic observation that does not prevent the product from benefiting from a high-end and qualitative image among the French.

As a result, the neo-Aquitaine wine significantly domesticites the alcohol market. In 2017 exports increased by 10% in volume terms. Thus, wines and spirits are the first products exported from New Aquitaine. This represents €4.65 billion: 20% of total regional exports and 30% of French exports in the sector.

It should also be noted that beer is also making its way into the heart of the Bordeaux region… The know-how of Aquitaine brewers has nothing to envy to the great wine castles.

The stakes of wine consumption in the territory

If wine plays an important role in the economic activity of the Aquitaine region and in the alcohol market, it should be noted that consumption habits are changing. Indeed, the National Committee of Wine Interprofessions takes stock of the consumption of wine on the territory in 2020. The balance sheet shows less frequent purchases as well as less consumption over the past two years. In addition, consumption is taking another turn. Wine seems to be consumed more occasionally. Thus, wine is tasted for pleasure. It is no longer necessarily the daily drink on the table during meals.

Sparkling wines are mainly consumed as an aperitif by 50s and at meals by 50s. The consumption of white wine decreases during aperitifs for 50s while it is maintained for 50s.

At the same time, the consumption of red and rosé wines, which are the two pillars of daily consumption, is also decreasing. At meals, consumers replace wine two times out of three with non-alcoholic beverages. Thus, for professionals in the sector, it is necessary to adapt to these new consumer trends. The objective is to propose an offer in accordance with the new desires and needs of consumers.

Vinexpo at the service of industry professionals

As every year, the wine market continues to take off, notably driven by Vinexpo. Indeed, the international trade show of reference in the world of wine and spirits rings out in Bordeaux, Hong Kong, New York, Shanghai and Paris.

A showcase of products from the Region and around the world, the fair welcomes professionals exclusively and participation has continued to grow over the years. Through its exhibition in foreign countries, Vinexpo participates in the influence of New Aquitaine and in particular the city of Bordeaux.

Finally, the players in the alcohol market are asserting themselves as passionate innovators and are making national and regional know-how shine around the world. Indeed, associated with the arguments of the French culture of taste and luxury,economic opportunities are at the rendezvous. Companies compete with ingenuity to create the labelling and packaging of the future, driving consumer curiosity and inviting the purchase of the product. A work on the whole value chain that is bearing fruit.

Sources

  1. Cultural alcohol in France
  2. Key figures for alcohol consumption in France
  3. “Globalbeverage alcohol performs better than expected”,IWSR, November 2020 press release
  4. Alcohol consumption in France, where are the French?”,Public Health France, article updated on January 14, 2020
  5. The 5 key figures of the decline in alcohol consumption in France
  6. Trendy beers,LSA Conso
  7. 2020 Global trends, IWSR, August 2020 press release
  8. Organic wine market in France to double by 2020
  9. The bright packaging of wines and spirits
  10. Inuru website
  11. Site de Saralon
  12. Cognac breaks export record for 4th consecutive year
  13. The marketing of Cognac, the key figures
  14. New Aquitaine International Trade in 2017
  15. Vinexpo website
  16. “Alcoholand the health crisis: Moët & Chandon at the top of the ranking!” Yougov, study published on May 11, 2021

ALCOHOL ABUSE IS DANGEROUS FOR HEALTH. TO CONSUME IN MODERATION.

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