European online wine sales growing in ‘overcrowded’ market

Online wine sales are growing steadily across Europe, according to a new report, but analysts believe overcrowding in the market will lead to more consolidation.

Digital wine sales account for around 4% of the total off-trade wine volumes in western Europe, according to Rabobank, with more than 360 million litres sold over 2017.

This stands in contrast to Europe’s overall wine consumption. Between 2010 and 2017, total wine consumption in western Europe declined by around 5%, while the total volume of wine sold through e-commerce has risen by 66%.

The highest level of e-commerce transactions is in the UK, where wine sales account for 10% of the whole off-trade.

“For wine sellers, e-commerce can offer additional benefits beyond a positive sales outlook,” Maria Castroviejo, Rabobank’s senior beverages analyst, said.

“For example an easier and cheaper geographic expansion. Above anything else, it can provide valuable customer insights that can enhance performance in all channels.

“However, to reap all these benefits, operators need to attract and retain sufficient customers and be able to count on adequate technology and data management.”

The report suggested that many online retailers will need to form partnerships to consolidate and expand their businesses.

“While different types of players will have different needs and priorities, we believe that the rise of wine ecommerce is creating a range of potential win-win M&A opportunities.”