COVID-19 pandemic impact on wine retail
It's been more than a year now since the start of the coronavirus pandemic. We want to take a closer look at its impact on wine retail.
Over the last decade, online wine retail grew at a robust and steady pace. While recently, the Covid-19 impact drastically accelerated the process, bringing about exponential growth.
According to Nielsen research, alcohol e-commerce has more than doubled compared to this time last year, and wine has enjoyed the benefits of this shift most, making up nearly 70% of total online sales.
When lockdown restrictions closed restaurants and pubs overnight, wine drinkers were left at home with few alternatives. Data shows that the boost of sales during the first lockdown was due to the cultural association of wine drinking with happy occasions, such as virtual wine tastings with friends, romantic date nights, and other significant moments people were forced to stay for at home. There was a limited selection of exciting, premium, and great value wines at a local supermarket. Online wine sellers reported triple-digit sales growth as consumers stayed home during the COVID-19 pandemic.
While many still continue to stock up on everyday wines from the supermarket, premium wine has become increasingly popular. Consumers gravitate towards value for money and spend more time browsing online to search for the best quality. Customers also increasingly want to treat themselves, sometimes to get through hard times, giving top premium brands the chance to reach a bigger group of potential buyers.
Let's take a deeper dive into the data.
The US leading online wine retailer Wine.com reported a 217% increase in revenue for the six months to the end of September. Revenue reached $176m for the first half-year, and this brought trailing 12month revenue to $285, a 102% increase from the previous year. Wine.com had to hire more than 300 new employees to keep up with the high demand.
Naked Wines reported increased revenues in total by 79.6% for the six months to the end of September. To be exact, revenue increased by 95% in the US, 76% in the United Kingdom, and 48% in Australia. Like wine.com, Naked wines had to increase warehouse capacity by 104% to keep up with the high demand.
According to Nielsen research, Vivino's second quarter of 2020 was the strongest quarter ever. In April, revenue increased by 157%, 137% in May, 140% in June, and 114% in July. They also reported that Friday 13 March 2020 was the second-highest sales ever, beaten only by Black Friday 2019.
Wine-research.com noticed that global wine sales were up by 33% in April, 45% in June, 17% in July, compared to the previous year.
The local wine merchants also reported a significant increase in online sales. To mention a few, Matt Tipping, CEO at Jeroboams, reported a rise of 65% in new customers buying mixed wine cases online. Acker Wines has seen a spike of 50%, and Usual Wines has seen an increase of 25% in online sales.
We, at 8Wines, have seen our sales increase over 205% in 2020 and seeing the same type of jump again this year. Our customers increasingly prefer premium and exciting new wines from exotic locations and new up-and-coming varietals.
So what did we learn from 2020? It's an exciting time for wine lovers who want to taste the world with the click of a mouse. Our customers are no longer satisfied with the wines they can find at their local supermarkets or traditional brick-and-mortar wine shops. We see that as wine lovers continue to adapt and realize how easy it is to purchase great wine online, they become long-term digital customers.