2015 Singapore Wine Industry: Q2 Highlights and Outlook
For the longest time, European countries have dominated the international wine scene. From production to consumption, and wine exports to wine imports, countries like France, Italy, and Spain seem to always emerge as the key players in the global wine trade. Last year, France and Italy took first and second place in the top 15 list of wine producing countries in the world. While we won’t see ‘newer’ wine markets unseating these European superpowers anytime soon, we are seeing wine consumption and production shifts in the horizon.
When the United States overtook France as the world’s leading wine consumer last year, it became apparent that ‘new’ wine countries were slowly but surely changing the landscape of the international wine industry. In the recent years, countries like New Zealand, Australia, Chile, and South Africa have gained solid footholds in various international wine markets. China and Japan are also paving the way for Asian wine producers, having become two of the top-producing wine nations in the world.
Local wine finds home in new wine markets
Despite the recent decline in wine consumption in Europe, global consumption continues to rise as ‘newer’ wine markets open all across the globe. Premium wines, in particular, are gaining traction in international markets, with French upmarket tipples leading the pack. As of 2014, 40 percent (%) of all wine produced is being exported. That’s a dramatic rise from the 25% export average from the early 2000s. Today, the global wine trade is worth a staggering 25 billion euros—about twice what it was worth 15 years ago.
While the United States remains the world’s foremost wine consumer, other markets are catching up. In Asia, the ones to watch include Japan, China, Hong Kong, and Singapore.
Wine consumption trends in Singapore
Though the Singaporean wine market remains considerably smaller than other wine industries, the country is currently at the forefront of Asian wine warehousing. Perfectly positioned in peninsular Southeast Asia, Singapore is an economic powerhouse that has both the capacity and proclivity to indulge in the best that wine lifestyle has to offer. In fact, in 2013 alone, the state-city consumed well over one million cases of nine-liter wines.
These days, the country’s wine enthusiasts are partaking in the growing trend of collecting vintage premium wines. Some of the most sought-after wines include the 2005 Bordeaux and Delaney, as well as 2001, 2002, and 2004 vintages. With Singapore Wine Vault, (the largest wine storage facility in Southeast Asia), readily accessible to these wine connoisseurs, avid collectors can keep their liquid assets stored safely in the company’s bespoke drome cellars.
Wine consumption in Singapore is expected to grow exponentially
In the 2014 Vinexpo Asia-Pacific wine and spirits exhibition, the organization predicted a 40% increase in Singapore’s wine consumption over the course of the next few years. This sudden interest in wine lifestyle may be attributed to the fact that Singapore is a veritable melting pot of cultures and traditions. The market’s growth is simply the manifestation of the country’s “East meets West” culture. And with the influx of big companies and key wine logistics players setting up headquarters in the country, it’s easy to see why Singapore is poised to become the next wine hub in Asia.
Growing market for sparkling wines
The market for sparkling wine has been gaining traction in the last few years. According to a report released by the Organisation of Wine and Vine (OIV), the sparkling wine segment saw tremendous volume growth when annual production reached 17.6 million hectoliters worldwide. This is an 11-percent increase from the 2012 yield. Although Europe still leads the production of sparkling wine, the United States and Australia are not far behind. Argentina and Brazil are also beginning to play a major role in the field as they have increased their sparkling wine production by 198% and 248%, respectively, in the last decade.
The rise in sparkling wine production has had a positive effect in the Singaporean wine market. As of 2014, 89% of the wine drinkers in Singapore admitted to being more inclined to go for sparkling wines than other varieties, like still wines. The fact that sparkling wine can help reduce the buildup of deposits inside the arteries, also works in the tipple’s favor. According to a study by the Journal of Agricultural and Food Chemistry, sparkling wine like Champagne, also contains substances that protect the brain from a myriad of illnesses, including Alzheimer’s and Parkinson’s disease.
Singaporeans still favor red wine
Singaporeans love red wine. At least, that’s what the numbers indicate. From 2008 to 2012, red wine consumption in the country increased by over 60%. These days, 64.3% of the wines consumed in Singapore are of the red variety. Like most other nations, red wine lovers in the country go for the tipple because of its robust flavor. But another reason why many Singaporeans prefer red wine over other varieties, is the fact that this wine offers a plethora of health benefits.
According to a study by Oregon State’s College of Agricultural Studies, red wine contains high levels of Resveratrol, which can improve muscle strength. The American Cancer Society also lauds red wine for the cancer-fighting properties of its antioxidant, quercetin.
Singapore’s main wine suppliers: Chile, Australia, and France
Due to its massive wine-producing capacity and geographical proximity, Australia remains one of the country’s top wine exporters. From 2008-2012, Australia made up about 14% of Singapore’s wine market. This number is expected to rise in the next few years.
Other key wine players in the Singaporean market include France and Chile. These two countries recently saw growth in sales—7.1% for France, and 33.3% for Chile. While France has always been a wine powerhouse, Chile is slowly building a global reputation for its top-of-the-line wines. Apart from the usual Carmenere and Bordeaux types, the South American nation is now recognized for its excellent Carignan and Sauvignon Gris varieties.
Takeaway: Overall growth for spirits market
In the last half-decade, Singaporeans have increased their spirits consumption by almost 83%. Wine, in particular, is seeing continued growth. Between 2013 and 2017, Singaporean wine consumption is expected to increase by around 21%.