Sales of NZ alcoholic drinks growing – trends to watch in 2021

Alcohol sales initially took a hit from disruption from the global coronavirus pandemic, but winemakers and distillers are now experiencing an uplift in sales.

Perhaps it’s those in other countries drinking away their despair at seemingly ongoing lockdowns, or perhaps it is the result of ongoing innovation.

Kiwi alcoholic beverage producers say “anything pink”, sparkling and high-end is tipped to do big things this year as consumers continue to spend up large.

Tim Lightbourne, co-founder of wine and spirits company Invivo & Co, says global consumers had tried New Zealand beverages for the first time during the height of the pandemic and were coming back to them.

Marlborough sauvignon blanc exports have grown exponentially in the past six months, fuelled by increased consumption in the US and Britain.

Invivo & Co’s UK sales increased by 215 per cent in 2020, driven largely by Marlborough sauvignon blanc sales, and NZ Wine figures from November show that NZ sauvignon blanc exports to the United States were up 5 per cent last year on the previous year.

Local sauvignon blanc was a hot commodity around the world right now, said Lightbourne.

“We’re literally scrambling to fill containers.

“The back orders that we have to go out in the next few months are phenomenal.”

The current financial year will be Invivo’s biggest year yet – by far, and sales for the Waikato-based company that was founded in 2008 are approaching $30 million.

Lightbourne said the increase in sales was being seen across the industry.

“People have ventured to sauvignon blanc from New Zealand during lockdown – and we’re still tiny as a country on a global scale for wine, but it is a style people really like – New Zealand sauvignon blanc is having a bit of a moment around the world.”

NZ sauvignon blanc price hikes

Demand for New Zealand sauvignon blanc has never been stronger and as a result retail prices are going up in price as the average price points increase.

Lightbourne expects this to continue through the year.

“New Zealand is running out of sav, it’s all about supply and demand, the price will increase as there is not an endless supply.

“It’s really positive news right now, and it is a fortunate position we’re in.”

New style: Rosé prosecco

At the end of last year the Italian Government allowed prosecco producers to use pinot noir in their winemaking in addition to the glera grape, meaning that for the first time rosé sparkling wine can be made in Italy by prosecco producers. It is poised to further fuel growth of prosecco sales in the United States, Britain and New Zealand.

Standard prosecco is popular on its own, but the trend is expected to become more mainstream as new styles of prosecco come to market. The category doubled in size over the past 12 months.

Invivo began working on its first rosé prosecco during the height of the pandemic in New Zealand in May/June last year. It tasted the samples with Graham Norton over Zoom and agreed on the recipe virtually about a month later.

After facing shipping delays due to sea freight hold-ups at the Ports of Auckland, seven shipping containers of the rosé prosecco arrived in December, took about five weeks to clear, and has just gone on sale.

“We see it as a real hot trend, we’re seeing it taking off in the UK and the US as well and so on the back of growth of prosecco, we think prosecco rosé is going to be very hot for 2021.”

Lightbourne said Invivo had reordered more stock on the back of anticipated demand.

Lightbourne believes “everything pink” including pink gin will be a hit this year. This could be in part down to the product being Instagram-friendly.

Vodka sales trending upwards

A surge in the at-home cocktail scene thanks to lockdowns has seen vodka sales tick back up in recent months.

Robert Brewer, chief executive of Spirits NZ, said the popularity of gin as a white spirit had rubbed off and into the vodka market.

“As with gin and other spirits, it’s a move to the more premium end of the spirits market. The trend that people are generally drinking less but going up the value chain is seen in beer and wine as well.”

Although sales of spirits in New Zealand are up domestically, overall as a category they are down about 10 per cent as a result of the duty free market drying up with international travel off the cards as the borders remain shut.

Around 16 to 18 per cent of all spirits that are drunk in New Zealand are purchased through the duty free channel.

Popularity of gin continues

The huge popularity in gin continues globally in Western markets. This was being driven by gin producers’ ability to make small batches, creating an exclusivity experience around the product, Brewer said.

“Small batches was already prevalent in Scotch whisky, but not to the same extent it has been in gin – we expect to see that type of artisan approach being brought to market to cater to demand by consumers for product that they not only know what’s in and where it has come from, but a distinctness to it.

“New Zealand gin is echoing this trend. A lot of local producers are using unique New Zealand botanicals like mānuka and horopito and kawakawa – things that you just won’t find anywhere else in the world.”

Provenance of spirits products was becoming more sought-after within gin, he said.

Gin sales in January increased by 72 per cent on December’s figures, while vodka sales increased by 53 per cent, according to Spirits NZ.

Brewer expects to see more gin distillers set up operations in 2021, and exports to continue to be strong.

Exports of New Zealand distilled spirits are worth around $40 million annually and are expected to grow further, he said.

Seltzer proves to be more than a fad

Seltzers are huge business in the United States.

In New Zealand, sales of seltzers have taken off in recent months and are expecting to follow global trends edging up as they are perceived to be a healthier alternative to the typical RTD.

Spirit-based seltzers are perceived to be the more traditional kind, but wine and beer varieties are also popping up left, right and centre.

Brewer said more new brands and varieties would no doubt come to market this year.

“When does a fad become a trend? I’d call it a trend in the US market without a doubt because it has been growing and become huge there over the last three to five years. It is not something that has penetrated the New Zealand market a lot yet, although we are beginning to see the trend that way.”

He believes seltzers will “solidify” as a firm consumer trend in New Zealand over the next year.

Alcohol e-commerce sales take-off

E-commerce online sales of alcohol continue to grow both in New Zealand and overseas in markets such as the United States and Britain.

US e-commerce operation has had a record year of sales, with revenue up nearly 120 per cent, and many more operators have popped over the past nine months, both in New Zealand and globally.

Invivo has recently partnered with e-commerce giant GoPuff, an alcohol e-commerce site that promises to deliver drinks within 30 minutes of an order, 24 hours a day, and is active in 500 cities in the States.

A number of online retailers in New Zealand have popped up in recent months that deliver alcohol. These include Wine Monster and The Honest Grocer, and new players seem to be starting up almost weekly.

“Because of Covid people have become more comfortable ordering online and having product delivered to their homes,” Lightbourne said.

He said this was only going to grow stronger.

Source: Read Full Article