Wine - Sri Lanka

The Wine market in Sri Lanka has been experiencing steady growth in recent years, driven by changing consumer preferences and local special circumstances.

Customer preferences: Sri Lankan consumers have shown a growing interest in wine, with an increasing number of people incorporating it into their social and dining experiences. Wine is no longer seen as a beverage for special occasions but has become a popular choice for everyday consumption. This shift in consumer preferences can be attributed to a growing middle class, who are seeking new and sophisticated experiences. Additionally, there is a growing awareness of the health benefits associated with moderate wine consumption, which has further fueled the demand for wine in Sri Lanka.

Trends in the market: One of the key trends in the Sri Lankan wine market is the preference for imported wines, particularly from traditional wine-producing countries such as France, Italy, and Spain. Sri Lankan consumers perceive imported wines as being of higher quality and are willing to pay a premium for them. This trend is driven by the desire for authenticity and the association of imported wines with luxury and sophistication. As a result, there has been a significant increase in the importation of wines from these countries. Another trend in the market is the rise of wine tourism. Sri Lanka has seen an increase in the number of vineyards and wineries, particularly in the cooler regions of the country. This has led to the development of wine tourism, where visitors can tour vineyards, participate in wine tastings, and learn about the winemaking process. Wine tourism not only provides a unique experience for visitors but also promotes the local wine industry and boosts the overall demand for wine in Sri Lanka.

Local special circumstances: Sri Lanka has a unique cultural and religious background that influences the wine market. The majority of the population in Sri Lanka practices Buddhism, which discourages the consumption of alcohol. However, there is a growing acceptance of moderate wine consumption among the younger generation, who are more open to trying new experiences. This has created a niche market for wine in Sri Lanka, catering to those who appreciate the taste and sophistication of wine while adhering to cultural and religious norms.

Underlying macroeconomic factors: The economic growth of Sri Lanka has played a significant role in the development of the wine market. As the country's economy continues to expand, disposable incomes have increased, allowing consumers to spend more on luxury items such as wine. Additionally, globalization and the opening up of the Sri Lankan market to international trade have made imported wines more accessible and affordable. This has further contributed to the growth of the wine market in Sri Lanka. In conclusion, the Wine market in Sri Lanka is experiencing growth due to changing consumer preferences, the rise of wine tourism, unique cultural circumstances, and underlying macroeconomic factors. As Sri Lankan consumers become more sophisticated and open to new experiences, the demand for wine is expected to continue to rise, creating opportunities for both domestic and imported wine producers.

Data coverage:
The data encompasses B2C enterprises. The at-home market covers retail sales via super- and hypermarkets, eCommerce, convenience stores, or similar sales channels. The out-of-home data encompasses all sales to hotels, restaurants, catering, cafés, bars, and similar hospitality service establishments. Combined numbers encompass both the at-home market and the out-of-home market. Both the at-home and the out-of-home market are valued at retail selling prices including all sales and consumption taxes.

Modeling approach:
Market sizes are determined through a Top-Down approach, building on specific predefined factors for each market segment. As a basis for evaluating markets, we use resources from the Statista platform as well as in-house market research, national statistical offices, international institutions, trade associations, companies, the trade press, and the experience of our analysts. In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, consumer spending (e.g. consumer spending on alcoholic beverages, consumer spending at Hotels, Restaurants etc.), and price level index. This data helps us estimate the market size for each country individually.

Forecasts:
In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the exponential trend smoothing is well suited for forecasting the Alcoholic Drinks market with a projected steady growth. The main drivers are GDP per capita and consumer spending per capita.

Additional notes:
The data is modeled using current exchange rates. The impact of the COVID-19 pandemic and the Russia-Ukraine war are considered at a country-specific level.