Sparkling wines – A changing market

Sparkling Wines Market
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Consumption of sparkling wines is booming worldwide. They now account for some ten percent of total global wine sales – with no end to the boom in sight. The trend looks even more impressive in terms of numbers: In recent years, sales of sparkling wine have grown to approximately 2.5 billion liters of the approximately 25 billion liters of wine consumed worldwide every year. That’s 3.33 billion standard 75 cl bottles of sparkling wine – or 0.4 liters for every person in the world.

While consumption of sparkling wine is growing worldwide, it seems to be leveling off in Germany. At first glance, that looks unusual. Years ago, Germany was the world champion in sparkling wine consumption, with more than five liters per capita and a role as a major distributor of sparkling wine from traditional wine-growing regions in central Europe. But things have changed. The U.S. and Great Britain, which previously focused more on beer than wine or sparkling wine, have gained considerable ground in recent years.

Furthermore, interest in wine consumption is growing in countries that are new to the wine market: Major players in the sparkling wine industry have posted growth in Asia’s emerging consumer markets, including China, Japan and South Korea, as well as in several African, South American and Russian regions. Internationally, the market has grown by a few percentage points in the past years. In particular, female customers from the emerging middle class in Asian countries, from North and South America, Africa and Oceania and Australia are responsible for gains and continued growth.

Sparkling wine in the German market

A somewhat different view must be taken when looking at the German market. In 2018, sales of sparkling wine fell by some 4.5 percent according to the data for wine consumption published at the end of January 2019 by the German Winegrowers’ Association, based on data from the Federal Statistical Office. However, while this may seem worrying at first, a closer look reveals a much less dramatic scenario – at least from the point of view of the major sparkling and semi-sparkling wine producers. Reduced sales of sparkling wine do not automatically mean that it is falling out of favor in Germany. The consumer has merely become more flexible and the industry is acting on trends.

Champagne, semi-sparkling wine and frizzante: The difference in sparkling wines

Today, the term sparkling wine has a much broader scope and ranges from traditional champagne, which is considered a quality sparkling wine by definition in wine law, to semi-sparkling wines, frizzante and all types of secco products or non-alcoholic sparkling drinks as well as fruit and wine-based cocktails.

In the case of seccos, there is an abundance of new products from domestic and international base wines, fruit juices or aroma concentrate with added wine-based or different carbonation that produces the beverage’s characteristic effervescence. The carbonation resulting from grape fermentation is collected and stored in pressure tanks and then added to the seccos when the wines are bottled. Legally speaking, these top-of-the-line products from the secco range are actually semi-sparkling wines whose own carbonation produces the effervescence, as opposed to “semi-sparkling wines with added carbonation,” which must be indicated as such on the label. Semi-sparkling wines must have an allowable pressure between 1 and 2.5 bar, which most producers keep at just under the maximum limit of 2.5 bar. This gives the seccos and semi-sparkling wines their intense bubbling – and for many consumers, there is no longer any difference between these wines and champagne or sparkling wine.

Categorization of the German sparkling wine industry

The German sparkling wine industry itself has redefined its market accordingly and organized it into several categories. The first group includes “Sparkling wine and champagne,” the category for classic sparkling wines. The second category of “Other sparkling wines” includes fructose-sweetened Asti Spumante, Moscato d’Asti and the generally sweet Lambruscos. The third category includes “Wine-based cocktails” and all types of seccos and sparklings. Consumers have become more willing to experiment and are purchasing the new sparkling wine variations without a fuss.

According to the trade panel of the market research company Information Resources (IRI), German food retailers and discounters sold 484 million bottles in the sparkling wine category in 2017. Of those, some 319 million bottles were quality sparkling wines and 165 million bottles were from the “Other sparkling wines” category. IRI also puts sparkling wine-based cocktails, seccos and other effervescent beverages in the latter category.

Upward trend for non-alcoholic beverages

In terms of sales and consumption, a steep upward trend is apparent in non-alcoholic bubbly beverages that are produced from dealcoholized wines. All of the major producers offer a wide selection of non-alcoholic beverages in this category, including sparkling wine maker Schloss Wachenheim with its Light-Live products, Rotkäppchen-Mumm and its non-alcoholic Rotkäppchen alkoholfrei, and Henkell-Freixenet with the non-alcoholic Söhnlein Brillant alkoholfrei. “Schenk Deinem Tag ein Prickeln“ (Put a little sparkle in your day), is the message Henkell uses to advertise these products. Another major player in this business is the Trier-based company Herres, which makes the Keller Geister brand – the leading semi-sparkling wine and one of the most well-known semi-sparkling products in general, and one that now looks somewhat traditional. Herres is also a specialist in all types of trendy beverages, organic and energy drinks. The bottles usually feature the English word “Sparkling” or the popular term “secco.”

Sparkling wines: Legal framework

Consumers seem to enjoy the variety and understand the message, especially since the labeling and the design of the bottles strongly resemble that of sparkling wine and champagne. Even so, they are all sufficiently different in terms of legal requirements. Sparkling wines must follow narrow guidelines for their designation and production, with the origin of the wines, vintage, vine variety and taste being the essential levers in product differentiation. On the other hand, the semi-sparkling wines, sparkling fruit wines, seccos and wine-based cocktails have considerable leeway when it comes to these requirements: Taste and fruit varieties range from strawberry, raspberry, peach and mango to mimosa and all other fruit aromas through to the classic Hugo white and rosé or Sprizz. If there’s a conceivable product in a fruity or bubbly version, producers will want to make it and put it on the shelves of food retailers. The legal framework also allows alternative packaging such as cans and aluminum or small bottles.

The shift in the German market also reflects the specific nature of the German sparkling wine law. For years, sparkling wines that by definition have carbonation pressures of more than 3 bar have been subject to a sparkling wine tax of €1.02 per bottle (€136 per hectoliter). While the finance minister looks forward to the approximately €400 million this tax earns every year for the country’s coffers, its effect is to boost the popularity of low-tax or tax-free products among consumers. Seccos, sparkling wines and all other effervescent alternatives are therefore preferred over the competition. The distinction between champagne and other bubbly drinks no longer seems to be very important to the consumer. Occasions that call for the consumption of bubbly wines or wine-based beverages are also much less formal and traditional now than in the past, which benefits the alternatives. While classic sparkling wines and champagnes are still the highlight at Christmas or on New Year’s Eve, the bubbling alternatives now have their place throughout the year. They are popular as chilled beverages in the summer and thus ensure sales for manufacturers and retailers all year round.

Dr. Hermann Pilz

Dr. Hermann Pilz has been in charge of the trade magazine WEINWIRTSCHAFT as chief editor for over 20 years. He loves writing about many different topics of the wine and spirits industry.