In many markets around the world, e-commerce is universally seen as a key tool to counteract the demise of on-premise sales and in some cases, severe restrictions to brick-and-mortar locations.
While markets with an established e-commerce structure are meeting increased demand, such as in the UK and Spain, there are growth constraints due to capacity issues.The pandemic has also highlighted the plight of countries lacking a viable e-commerce structure, such as in Italy. Whilst Italy has doubled its e-commerce sales, this is negated by its low starting point and restricted sales due to limited capacity. Meanwhile, consumers in Germany have proven reluctant to embrace online alcohol sales. Alcohol e-commerce has grown but not to the same extent as other developed European markets.
Off-trade and e-commerce drive growth in the UK.
By comparison in the UK, off-trade is up by 20% and e-commerce is up by 50%. The growth potential of e-commerce in the UK, however, is constrained by capacity issues and catering to the surge in demand, especially within general grocery e-commerce which leads in the UK. The closure of the on-trade in the UK has meant 40% of UK trade has been removed from the market.
As governments begin to ease movement restrictions, consumers may start to gradually leverage additional channels for their alcohol purchases. For example, e-commerce greatly benefited from strict movement restrictions in China. However, as restrictions started to ease, there has been some return to brick-and-mortar retailing at the expense of e-commerce. The gradual reopening of restaurants is providing consumers with additional alternatives as well.*
By David BECK
Director at WINE ANALYTICS