While at-home consumption of wine in Japan continued during the pandemic, the return of on-premise consumption is witnessing a rebound as food service and tourism venues resume normal operations. The Japanese wine market is set to grow from JPY760.7 billion ($6.9 billion) in 2021 to JPY990.5 billion ($10.2 billion) by 2026, registering a CAGR of 5.4 percent, reported GlobalData.
Fortified is set to be the fastest growing wine category at 7.1 percent, followed by still wine at 5.5 percent and sparkling wine at 4.9 percent. Percapita expenditure on wine decreased from $69.30 in 2016 to $63.40 in 2021. Mercian Corporation, Suntory Holdings, and E. & J. Gallo Winery were the top three companies in the Japanese wine market in volume terms in 2021, while Mercian, Carlo Rossi, and Frontera were the leading brands.
“As on-premise consumption contributes to a large chunk of wine sales, the reopening of restaurants, bars, pubs (izakayas), and clubs is bolstering the overall wine sales. Elderly individuals with high purchasing power are the powerhouses of the Japanese wine market. Young consumers are also more inclined to have wine as an alternative to spirits and beer during socializing occasions, business meetings, mealtimes, and parties. Fine dining restaurants offer guests sommeliers’ service to pair wines with the menu,” said Bobby Verghese, Consumer Analyst at GlobalData.
Food and drink specialists were the leading distribution channel in the Japanese wine market in 2021. This is partly due to wine shoppers’ preference to visit stores where skilled staff can provide cues about wine varieties and styles. Hypermarkets and supermarkets, and convenience stores were the other leading channels.
“The heightened health consciousness due to COVID-19 is stimulating demand for red wine, which is scientifically proven to be beneficial for health, as well as natural, certified organic, and biodynamic wines. Unlike the conservative Gen X generation, Millennials and Gen Y consumers are experimenting with new varieties of wine. With these young consumers foregoing the drinking culture of their predecessors, low-alcohol wines are set to gain more traction in the coming years.”
“Currently, a divergence in consumption behaviour is visible, with demand simultaneously on the rise for both premium Champagne and Burgundy wines and affordable sparkling wines. Moreover, single-serve cups and glasses, canned RTD wines, and a half and quarter wine bottles are gaining popularity in line with the increase in single-person households. This consumer value- volume trade-off and the revival in tourism activities will spur premiumization in the Japanese wine market in the coming years.”
