Fortified Wine Market

Fortified Wine Market - Entering the Premium Era

The global alcohol market in general and wine industry in particular have been on tear for years, due to effects of globalization and changes in the level of international trade and geography of production and consumption. Additionally, a sharp evolution in taste, preferences, and consumers’ lifestyles has a significant impact on sales of various wines such as fortified wines

. With significant improvements in alcohol ingredients and consumers everywhere becoming more knowledgeable and curious, the last decade saw further broadening of fortified wine consumption within and beyond developed markets in the U.S. and EU5.

Over the years, due to inconsistency in table wine quality, fortified wine came in the front. Moreover, notable development in fermentation equipment and simple process of setting these products aside in wine barrels resulted in wines of supreme quality.

However, it is pertinent to note that, manufacturers are currently facing added pressures in terms of health and wellness trend, premiumization, and competition from other categories of alcoholic drinks. Innovation and change are thus emerging as a key to survival and success in the fortified wine market.

Fortified Wine Market - Competitive Landscape

Key players active in the fortified wine market are Albina & Hanna, Davide Campari-Milano S.p.A., Backsberg Estate Cellars, E & J Gallo Winery, Indage Vintners Limited, Vinbros and Company, Bacardi Limited and Into Wine.

Some of the important developments in the competitive landscape of the market for fortified wine include:

• In November 2019, Davide Campari-Milano announced that it has entered into exclusive negotiations for the acquisition of Baron Philippe de Rothschild France Distribution SAS Milan, the former’s distributor in France. Campari Group has also pledge to purchase the capital of the Target, which is currently 100% owned by the latter company.
• In May 2019, Bacardi announced the launch of its new version of Martini Asti sparkling wine in the U.K. market. The new product features fresh pear and pineapple flavors with notes of grape, melon, and peach.

Key Factors Influencing Growth of the Fortified Wine Market

Growing Interest in Culture and Pleasures of Wine and Food

Fortified wines are known for their long standing contribution to the global wine industry. Today, the rise of digital era and rapid penetration of social media have increased the accessibility to information, resulting in widespread of wine culture in various regions across the globe.

Port wines are witnessing higher consumption as compared to other types of fortified wines including Sherry, propelled in part by discovery of drier port wines by wine collectors and a gradual shift away from sweet wines to drier variants.

Market Set Their Eyes on Emerging Trends

Emergence of the wellness era and conscious consumption trend coupled with inclination towards convenient yet high-quality products are causing a radical upheaval in both alcoholic and non-alcoholic beverage sectors. Given consideration to increasing demand ready-to-drink (RTD) alcoholic drinks, manufacturers of fortified wines are focusing on aligning with new alcoholic beverage packaging trends, especially wine in cans.

Such strategic move is expected to attract a new generations of consumers and diversify the occasions of drinking wine. Furthermore, as cocktail culture takes hold and consumers are increasingly moving from staple to luxury fortified wines, market players will need to use innovative integrated approaches to define new marketing strategies.

Internet Retailing of Fortified Wine Gains Prominence

The impact of ‘convenience’ factor is also noticeable in distribution trends of fortified wines. Growing popularity of modern trade channels along with emergence of discounters is defining growth strategies, while manufacturers are increasingly directing sales of their product towards e-commerce which is becoming the major driving force of the market.

Easy availability of diverse range of products and door-step delivery services are attracting a larger number of consumers with strong purchasing power, thereby increasing manufacturers’ profit margins.