A forecast shows that it could be boosted by still wine, followed by sparkling and fortified wines.
Singapore's wine market could grow by 5.1% over the period 2016–2021 from US$1b in 2016 to reach a market value of US$1.4bn by 2021, data and analytics firm GlobalData revealed.
According to a study, the Singaporean wine market grew at a CAGR of 5.5% during 2011–2016. "Still wine outstripped both sparkling and fortified wines to emerge as the most valuable category during the reporting period," it said.
The report forecasts the still wine category to grow at a CAGR of 5.2%, whilst the sparkling wine category will expand at a CAGR of 5.1% between 2016 and 2021.
The growth of the overall wine market can be primarily attributed to the rapidly growing economy and high disposable incomes, coupled with growing affinity towards premium wine products imported from Australia, France and Chile, says GlobalData.
GlobalData lead consumer analyst Ronan Stafford commented, “As the Singaporean economy continues to grow and consumer spending increases, consumers are likely to trade up to more premium offerings rather than mainstream or value wine products. Premiumization opportunities are present across all wine categories, especially within the still and sparkling wine categories, given their strong growth rates.”
The fortified wine category, on the other hand, registered the slowest value growth during 2011–2016. It is expected to grow at a lower CAGR of 3.2% from 2016 to 2021. “Consumers within this category are less likely to trade-up to premium offerings, so manufacturers charging premium prices will need to thoroughly justify it to the consumer,” said Stafford.
Moreover, alcohol sin-taxes coupled with a large Muslim population who do not drink alcohol are limiting factors in the Singapore wine market.
Stafford concluded, “The low private label presence highlights the premium wine preferences of local consumers in Singapore. The fixed ‘sin’ tax on alcohol is also likely to affect the demand for cheaper private label wines, as consumers are likely to give preference to higher quality wines which better justify their higher price points. Therefore, premiumization opportunities are rife within the market, given that producers need not worry about a significant presence of low-price private label products.”
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