A burgeoning market bolstered by the pandemic
The wine market was no exception to the switch to digital galvanized by the onset of the coronavirus pandemic. On the contrary, many online wine retailers were propelled to significance by the pandemic-induced e-commerce boom. In the United States, the e-commerce share of wine sales went from only 0.3 percent in 2018 to nearly three percent in 2022. The e-commerce channel promises to be lucrative, too. The top five wine and liquor online stores in the U.S. together generated more than one billion dollars in e-commerce net sales in 2022. Similarly, a shift to digital is underway in the United Kingdom, where the online revenue share of the wine market is forecast to reach nearly 12 percent by 2027.Wine thrives online
For online businesses operating in smaller e-commerce segments, the pandemic created an unprecedented opportunity to forge their way into people’s consumption patterns. Online wine retailers grabbed the opportunity and saw their revenues and consumer reach increase significantly as a result. Totalwine.com saw its e-commerce net sales more than double in the United States, going from an estimated 154 million U.S. dollars in 2019 to more than 313 million U.S. dollars in 2022. Similarly, the global market presence of Naked Wines, spanning three continents, was also reinforced by the pandemic: with approximately 178 million British pounds in sales revenue in 2019, the wine e-commerce company saw its revenues surpass 350 million pounds by 2023. Looking less and less like a small niche market, competition is multiplying in the wine e-commerce market both at the local and global levels. Long-established brick-and-mortar stores and distributors like Germany’s Hawesko and Australia’s Dan Murphy’s are flocking to the digital sphere to sell wine and liquor alongside pure players like Italy’s Tannico and France's Vinatis, which managed to build up successful marketplaces.How does the post-pandemic future look like for wine e-commerce?
With the return of on-premise and the easing of lockdown restrictions, wine e-commerce is catapulted into direct competition with brick-and-mortar stores and establishments offering on-premise experiences. Nevertheless, consumers that switched to digital during the pandemic seem to have maintained the habit of shopping online, at least to a certain extent. Nearly half of French consumers reported purchasing wine online at the height of the pandemic in 2021. While that figure dropped to 38 percent in 2023, it remains well above pre-pandemic levels, showing positive signs that online shopping for wine is here to stay.However, growth in online Beer, Wine, and Spirits (BWS) sales seems to have stalled in the United Kingdom. In 2022, the segment recorded double-digit negative growth decreasing by 18 percent in June 2022, indicating that wine e-commerce may not be immune to stagflationary pressures and macroeconomic shocks. With staggering levels of inflation pushing the brakes on consumption in European economies and beyond, the post-pandemic challenge of online wine retailers becomes two-fold: capitalizing on pandemic gains with the return of on-premise competition, but also maintaining consumer reach in the face of declining consumption.
