From Canada - Hard Seltzer draws away Canadian wine drinkers during pandemic

Canada’s wine drinking population has fallen during the pandemic, with hard seltzer gaining ground, particularly among younger adults, while wine volumes have been underpinned by committed drinkers starting ‘wine o’clock’ earlier - Wine consumers in Canada have weathered the storm of Covid by drinking wine a bit more often, buying more familiar brands, and opting for larger formats in some cases, while reducing their on-premise visits.

New wine consumption occasions have emerged from the pandemic. After an initial surge in lunchtime wine drinking, this habit has reduced, and instead consumers appear to be bringing forward ‘wine o’clock’ to late afternoon, and also deploying wine in online socializing.

The context for wine is also changing. Ready-to-drink alcoholic beverages such as hard seltzer and pre-mixed cocktails have grown their share of the beverage alcohol market significantly in the past year. While the biggest casualty of this change looks to be the beer category, the fashion for RTDs appears to be encroaching on some of wine’s turf as well.

In particular, the younger end of the wine drinking population, known in the Wine Intelligence segmentation as Social Newbies, appear to be exiting the wine category, and contributing to a decline in the overall wine drinking population, which is now estimated at 17.5 million monthly drinkers, down from nearly 20 million in 2017.

While there are still plenty of highly involved, motivated and high spending consumers to target in Canada, the lower-using, lower spending consumer segment known as Kitchen Casuals is showing an increase. Some of these appear to be younger consumers who, shorn of the opportunity to drink wine in on-premise settings, are reducing their wine drinking occasions. It is also a function of some consumers trading down, either arising from economic worries or finding more tempting offers in the monopoly retailers as they fend off the challenge of wines selling in grocery store settings.

Overall sentiment among consumers and trade is that wine has had a ‘good’ pandemic. However, the difficulties of the on-premise, and the long road to recovery of this channel, will weigh on the industry through 2021, and the main challenge will be recruiting consumers back to the wine category in the face of attractive beverage choices elsewhere.