Ireland, an exceptional year for the Irish wine market

The Covid-19 pandemic saw changing purchasing trends and overall alcohol sales fall by 6.6% in 2020. Beer and cider sales were significantly hit as those products are typically consumed in the hospitality sector. However, generally about 80% of wine purchased in Ireland is in the retail sector. Due to the rolling lockdowns of the hospitality sector, however, an estimated 95% of wine sales were from the retail sector in 2020.

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A member of the European Union since 1973, Ireland is the only English-speaking country to have adopted the Euro. With a population of 4.96 million, Ireland represents about 1% of the European population. The country has the highest birth rate in the European Union.

The 2008-2012 crisis period was followed by a period of unprecedented economic expansion in Ireland, commonly referred to as the Celtic Tiger.
The Irish economy is very open to the international market. For more than twenty years, it has successfully adopted an economic development model based on the attractiveness of FDI, which is mainly the work of American multinationals, producing 80% of the country’s exports of goods, mainly in chemicals, pharmaceuticals (more than 60% of exports) and technology.

Read also United Kingdom, 15% of the Brits drink rosé wine

With the Brexit, Ireland becomes the gateway to the British market for European and French companies, as well as the only English-speaking country in the EU.

Beer is the favorite alcoholic drink of the Irish

The Irish market for alcoholic beverages is mature, and total consumption is down slightly over the last ten years.
The Irish consume alcoholic beverages mainly in a social context In 2020 the crisis has strongly impacted the consumption of alcoholic beverages, with the exception of wine consumption, which is growing in 2020: +12% according to Alcohol Action Ireland (AAI).

Wine comfortably remains the nation’s second favorite alcohol beverage after beer. 2020 saw a five-point increase in wine’s market share to 32%, mostly at the expense of beer’s market share which fell from 45% in 2019 to 39% in 2020.

Irish consumer drinking habits changed

The Covid-19 pandemic saw changing purchasing trends and overall alcohol sales fall by 6.6% in 2020. Beer and cider sales were significantly hit as those products are typically consumed in the hospitality sector. However, generally about 80% of wine purchased in Ireland is in the retail sector. Due to the rolling lockdowns of the hospitality sector, however, an estimated 95% of wine sales were from the retail sector in 2020.

Wine comfortably remains the nation’s second favorite alcohol beverage after beer. 2020 saw a five-point increase in wine’s market share to 32.2%, mostly at the expense of beer’s market share which fell from 44.9% in 2019 to 38.9% in 2020.

2020 was an exceptional year for the Irish wine market, primarily due to the lockdowns that the retail sector has endured last year. It is unlikely that the sales figures of 2020 would be replicated in a post Covid-19 world.

As a result of Covid-19, which resulted in lockdowns and the closure of the hospitality sector, Irish consumer drinking habits changed for a period. As beer and cider are mostly consumed in the on-trade, sales fell across both categories while wine sales in the off-trade rose. Overall alcohol consumption declined.

The online alcohol sales channel, which was still underdeveloped before the pandemic in Ireland, accelerated during the pandemic, due to the successive confinements.

Wine is indeed an alcoholic beverage that is consumed at home in Ireland, while beer and cider are often consumed in the on-trade (especially in the pub).

Irish consumers searching for premium wines

Overall, wine sales in 2020 rose by 12% to over 10 million cases. According to industry estimates, the popularity of rosé continues to grow. It had an estimated 7% share of the wine market last year, which is double its share in 2016. The trend is driven by rosé wines from Provence and pale colored rosé wines (with a similar taste profile). Hot summers have helped this trend, encouraging Irish consumers to seek out fresh, fruity wines.

Sparkling wines other than champagne, although historically a champagne-loving market, it is above all sparkling wines other than champagne that have seen an increase in Ireland in recent years, particularly crémants.

While Chilean wine remains the nation’s favorite for the 7th year in a row. The Covid 19 crisis seems to have stimulated the curiosity of Irish consumers and their search for premium wines. The recent success of Spanish wines (particularly in the mid-range) is evidence of this. French wines have an offer that can also meet this demand. However, they seem very complex to the typical consumer.
Labeling is considered difficult to understand, and the quality/price ratio is very uneven.
France remains the leader in the high-end segment since the famous grands crus and appellations are well known by consumers.
In the entry and mid-range segments, French wines are regaining an appreciable position thanks to a general improvement in quality and a more homogeneous offer. Importers agree that French wines are in a favorable position at a time when “New World” wines are tiring consumers. Also noteworthy is the trend towards wellness and ethical consumption, which is growing in Ireland, and is reflected in the wine sector: organic, biodynamic and low alcohol wines are increasingly sought after.

Importers play a key role in the Irish market. Although some end distributors (retail outlets, restaurants, etc.) import part of their range directly, the majority of their supplies come from importers.
Most importers are very busy and have very few elements to differentiate the offers they receive. It is therefore desirable to offer them solutions rather than a basic offer. In addition to the ex-cellar price and the product details, it is relevant to propose a delivered price taking into account the transport and an estimate of the final price in order to show the customer that the product is available.
Note that storytelling in the wine sector and the design aspect of the labeling are very important elements.

High excise rate on wine

The Irish wine market remains difficult from a price point of view, given that Irish excise duties are the highest in Europe. The excise rate on wine sold in Ireland remains the highest in Europe. For wine, Irish consumers pay €3.19 per standard bottle at 13% ABV. Of the 27 EU Member States, 15 do not charge on any duty on wine. Furthermore, sparkling wine gets an additional excise hit totaling to €6.37 on a standard bottle.

In 2020, the sector paid €425 million on excise to the exchequer, an increase of €47 million from the previous year. Over the past decade wine generated over €3.4 billion to the exchequer in excise alone.

Consumers in Ireland continue to pay punitive rates of excise on wine compared with other EU countries. We are calling for the government to reduce the excise rate on wine in Budget 2022.

Jonathan McDade, Head of Wine at Drinks Ireland

Business relations in Ireland are generally very cordial and are conducted in an informal and direct manner. The Irish are very quick to use the first names of their interlocutors. The Irish appreciate a personal contact, without formalism.

Ireland is a country of networks where people have known each other since childhood, and has maintained its island customs.

Ireland, an exceptional year for the Irish wine market

Our evaluation method

The data shows key metrics, and these are combined to show a ranking calculated using a composite weighted attractiveness combining overall economic factors and wine market factors.

WINE CONSUMPTION IN VOLUME

63

WINE CONSUMPTION IN VALUE

77

IMPORTED WINE IN VOLUME

81

IMPORTED WINE IN VALUE

84

POPULATION

0

GDP PER CAPITA

97

READER RATING0 Votes

0

73

Wine Market Attractiveness