A falling population. A rising number of migrants from cultures that are hostile to alcohol. What does Germany’s demographic future mean for a country that is the world’s biggest import market? That was the topic that Professor Dr Simone Loose from Geisenheim University tackled at the Meininger’s International Wine Conference, held on the Saturday before ProWein 2017 began.
“Forecasting is a very risky business,” admitted Dr Loose. “If you make the wrong forecast, you attract the ridicule of your peers.”
Nevertheless, she said that Germany’s demographic changes are a hot topic, and one of immense importance for the wine trade. Today, Germany’s population is 81m – but by 2060, it will have fallen to 67.6m. This will have major consequences for wine consumption.
“We have some very reliable patterns,” said Dr Loose. “Young consumers don’t drink that much wine, but as they get older, they drink more.” She said the current trends won’t change that much until the baby boomers “leave the population”, but when they do, they will leave a gaping hole in the wine drinking population. The slack will probably not be taken up by migrants and their children, because this particular group won’t drink wine. Dr Loose predicts that a steep decline in wine consumption will really begin around 2040.
“We’re assuming that young consumers will be moving up the wine curve, but that’s not something we can take for granted,” she said. One reason is that the German population is urbanizing, “so people have a mental distance between themselves and the winemakers”. Two thirds of people who buy ex-cellar live in the region, she said. “If they move to cities, this is a consumer group that will disappear. Can winemakers compensate, by selling through other channels?”
As well as risks, however, Dr Loose said there might be opportunities. “My figures were adjusted for immigrants, but did not take them into account. Many come from countries where alcoholic beverages are not welcome.” As migrants assimilate, however, this could change.
Dr Loose also discussed a survey done with ProWein, in which specialist wine experts, 600 international producers and just over 900 trade fair visitors were asked for their views of how German sales channels will change.
“The wine merchants will see strong declines,” she said. “That is the prognosis. I think the wine retailers will find it very difficult to maintain revenues if they cannot open up new consumer groups. Food retail, on the other hand, will become increasingly important as a wine sales channel.”
The survey participants also predicted that online sales would grow very strongly. However, online wine sales are still in their infancy in Germany. Dr Loose said that when 2,078 consumer were surveyed in March 2016, 79% revealed that not only had they never bought wine online, they had no intention of ever doing so. “The older generation refuse to buy wine online. They can’t taste it, they’re not being advised, they can’t see the bottle and they have no tangible connection to the wine. Delivery details are not an issue.”
Consumers currently aged 16 to 29, on the other hand, buy everything online. But this may not provide a boost for the wine industry, because “They want to see special sale prices. They want special deals. They don’t want to pay for shipping.”
As Dr Loose said in her opening remarks, it’s difficult to predict the future. Hopefully the predictions in this case will turn out to be wrong, because otherwise the future for wine sales in Germany does not look bright.
Felicity Carter
