Aspirational Consumers and Asia, the next two Challenges for Luxury Wines.

(This editorial is the executive summary of an exclusive VitaBella report)(More wine news on www.vitabella.fr). Recently, the luxury industry showed figures for the first six months of 2010 which were looking quite good. This rebound is mainly due to increased consumer demand and restocking by wholesalers and retailers. The question now is whether it can continue for the rest of the year and into 2011.
- Firstly, if the first six months of last year was the weaker half of 2009 for luxury, further slowdown is likely as comparables will get tougher.
- Secondly, it seems luxury consumers have traded down to less prestigious wines.
- Thirdly, the real problem in the near future is the "aspirational consumer" behaviour. Aspirational consumers are people who do not usually buy luxury wines but would like to do so. And during the recession, many consumers who would trade up to luxury previously simply pulled out of the luxury market.
The future performance for luxury wine estates will depend on two major points:
- Get back these aspirational consumers into the market. They played a key role in the western countries in accelerating the growth since the 90's and in that sense would help again. The challenge is difficult as increased talk of a double dip recession does not inspire consumer confidence.
- Develop sales in Asia. Over the last few years, we saw an increased demand for luxury wines from China and some other countries. Deeper penetration of new, large luxury goods markets is likely to bring a new wave of consumers in the future.
These are the two big challenges that the management of luxury wine estates is facing. Success will depend on how and how fast wine estates will adapt to these new demographics.(More wine news on www.vitabella.fr).