Wine Consumption Inches Ahead

Meanwhile, market consolidation accelerates

Posted: August 29, 2005

How much wine does the world drink? About 2.56 billion 9-liter cases, as of 2004, and that number is growing slowly, according to the current edition of The Global Drinks Market: Impact Databank Review and Forecast.

After a mere 0.1 percent increase from 2003 to 2004, global wine consumption is expected to expand by only another 2 million cases this year. By the end of the decade, the world wine market is projected to amount to 2.58 billion cases, according to the report.

The expanded European Union is consuming a majority of that wine, accounting for a 58 percent share of the world market in 2004, reported Impact Databank, which is owned by M. Shanken Communications, the parent company of Wine Spectator. Two years ago, the 15 EU members combined for wine consumption of 1.42 billion cases, or 56 percent of the global market. But the admittance of 10 new member nations in 2004 added 66 million cases to the size of the wine market in that geopolitical region. The United States, in contrast, accounts for 10.5 percent of the market.

Out of all the wine companies in the world, Constellation Brands is selling the most wine. In 2003 and 2004, the company added BRL Hardy, Robert Mondavi Corp. and Ruffino to its portfolio, vaulting ahead of E. & J. Gallo as the world's largest wine marketer. The last two years have seen heightened levels of consolidation, as industry giants bought up their biggest competitors. Earlier this year, Foster's Group purchased Australian rival Southcorp Wines, and the combined Foster's Wine Estates division now ranks as the world's third-largest wine marketer. Recently Pernod Ricard finalized its acquisition of Allied Domecq, some of whose wine brands are being sold to Fortune Brands.

And what wine is being drunk more than any other? Franzia. After a 10 percent gain in 2004, it became the world's largest-selling wine brand, at 24.2 million cases, ahead of Gallo's E. & J. Wine Cellars.

Wine is unique in the sense that the top 25 brands combined represent less than 8 percent of the global market, illustrating the extremely fragmented nature of the world wine industry. Beer and distilled spirits, on the other hand, derive a considerable portion of their sales from the top 25 brands in each category (28 percent and 25 percent, respectively).

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For more information about The Global Drinks Market, priced at $2,975, and other Impact Databank reports on the U.S. wine, spirits and beer industries, contact Elisa Trapani at M. Shanken Communications, 387 Park Ave. South, New York, NY 10016; by phone at (212) 684-4224, ext. 339; by fax at (212) 779-3366; or by e-mail at etrapani@mshanken.com. For a comprehensive table of contents and a detailed listing of tables and charts, go to www.impactdatabank.com/globaltoc. To print an order form, visit www.impactdatabank.com/usreports.