By: Briana Tomkinson
Change may tend to move slowly in the wine world, but new research published this year on Canadian wine trends reveal some important shifts in consumer tastes and spending habits.
According to the London, UK-based Wine Intelligence 2019 Canada Landscapes report, Cana-dians are drinking less but spending more and branching out to explore new tastes and varie-ties from a wider range of wine growing regions.
There’s also increasing crossover between the wine and beer worlds. A growing number of wine drinkers now also report that they choose beer at least occasionally. Craft beer culture, specifically the sense of strongly identifying with locally produced brands, also seems to be influencing consumer attitudes towards wine, with more Canadians now seeking out high-quality domestic wine.
According to COO Richard Halstead, also Wine Intelligencer’s Canadian market expert, Ontar-io’s Niagara region remains the dominant source for Canadian wine. However, the Okanagan Valley in British Columbia is now becoming highly regarded for the quality of its wine and the strength of its vineyard tourism offerings, while Quebec is an emerging presence in the wine world as well.
Of the over 700 wineries listed in the Canadian Wine Directory, almost 300 were in B.C., 200 in Ontario, over 150 in Quebec, with a handful in Nova Scotia, New Brunswick and Prince Edward Island as well.
A 2017 economic impact study commissioned by the Canadian Vintners Association, the Win-ery & Grower Alliance of Ontario, the British Columbia Wine Institute and the Winery Associa-tion of Nova Scotia, the Ontario wine and grape industry generates about $4.4 billion in eco-nomic impact, while in British Columbia it was estimated at $2.8 billion, $1.1 billion in Quebec and $218 million in Nova Scotia. For every $1 spent on Canadian wine sold in Canada, the study estimates $3.42 in GDP is generated across the country.
Halstead said industry analysts are starting to speculate that the same zeitgeist propelling con-sumers to support local farmers’ markets and neighborhood microbreweries may be influenc-ing Canadians’ attitudes on domestic wine.
“We’re a wine research company, so we don’t really look at craft beer except to look at how it’s affecting our world,” Halstead said. “But there are parallels with the connection craft beer has made with local ingredients and making a local product for local people, and that’s seeped into the wine category and made buying local cool again.”
The divide between wine drinkers and beer-drinkers appears to be narrowing in Canada. The proportion of regular wine drinkers who also choose beer, both mass-market and craft, is growing. In 2014, 67% of wine drinkers said they also drank beer, with 29% drinking craft beer, but by 2018, 74% were also quaffing beer, and 40% drank craft beer.
Data released in May by Statistics Canada found beer remained the most popular choice for Canadians, with $9.1 billion in sales and representing 41% of total sales of alcoholic beverages in 2016/2017. However, the market share of other alcoholic beverages, notably wine, contin-ued to grow. Canadians spent $7.2 billion on wine during the same period, a year-over-year increase of 3%, or just over one-third of overall alcohol sales.
Beer, particularly craft beer, has been growing steadily in popularity in recent years. According to Wine Intelligence’s report, from 2014 to 2017, the number of breweries in Canada increased by 115%, mostly driven by a proliferation of microbreweries and regionally focused craft brewers.
Another reason locally produced wine is gaining in popularity is because local liquor boards have been doing more to spotlight local wines.
“The wine world doesn’t move very fast normally, because people’s habits are people’s habits, but the pendulum has swung slightly toward the domestic side,” Halstead said.
Almost three-quarters of English Canadians now say they have selected Canadian wine in the past year, compared to one-third of those in French Canada. While English-speaking Canadians are far more likely to drink Canadian wines, and Quebecers to choose European brands, the report found domestic wines are quickly gaining in popularity in la belle province.
Canadians are now reporting drinking less wine, yet are more willing to splurge on a good bot-tle, Halstead said. Spending on higher priced wine has increased, particularly when the higher price point is linked to a good story, as with many local producers.
The average price per bottle of wine for a relaxing drink at home has increased from $12.79 per bottle in 2014 to $13.44 in 2018, while the average price paid for a bottle selected as a gift for someone increased from $17.36 to $18.81.
“One of the differences today in Canada versus 20 years ago is that if Canadians wanted really nice wine then, it would either be France or the top end of California,” Halstead said. “Now they’ve also got Okanagan wine, which is selling at $40-50 CDN for some cabernets and char-donnays. It’s hitting a very similar market spot that California, or at least the Napa/Sonoma re-gion, used to own without much competition.”
The increase in average cost isn’t only due to consumer preferences, however. Increased regu-lation, taxes, and liquor board policies have made it difficult for many producers to charge less than $10 per bottle. Regional, government-run liquor boards have also been promoting higher-end brands to motivate consumers to spend more on better quality products, in the hopes that this will also encourage citizens to drink less alcohol overall.
“The LCBO (Liquor Control Board of Ontario) and SAQ (Société des alcools du Québec) have been trying to get people to spend more money and buy less because that fits with govern-ment social policy,” Halstead said. “It’s also good for business because you make more money from one higher-priced bottle than you would two lower-priced bottles.”
Four out of five Canadians surveyed drank wine within the past year, compared to seven in 10 who drank white. The most popular reds were merlot, cabernet sauvignon, pinot noir, shi-raz/syrah and malbec. White wine drinkers were attracted to chardonnay, sauvignon blanc, pi-not grigio/pinot gris, riesling and moscato. No matter what wines drinkers chose, they pre-ferred wines from California’s Napa Valley, Ontario’s Niagara Peninsula, the B.C. Okanagan, the Bordeaux area of France and Tuscany in Italy.
Consumption of rosé is going up, particularly among regular wine consumers in Quebec. While rosé used to be a seasonal beverage, rosé fans are now enjoying it throughout the year, not only in summer. The drink is particularly popular with young adults aged 19 to 34, women, and savvier wine drinkers.
Sparkling wine is also gaining, albeit from a small base, led by the popularity of Prosecco. The percentage of wine drinkers who consumed sparkling wine in the past year increased from just 12% in 2014 to 19% in 2018. Consumption of locally produced sparkling wine has decreased however, with most consumers choosing imports from France, Spain, and Italy—specifically Prosecco.
Halstead said many American brands are continuing to do well in the Canadian market, par-ticularly mainstream Californian brands like Barefoot, Gallo, Woodbridge and Apothic.
As you’d expect in a country where provincially run liquor boards maintain tight control over wine sales (with the exception of Alberta), three-quarters of wine consumers bought their wine from government-controlled liquor stores. Other notable sales channels (representing from one-fifth to one-quarter of consumers in each case) included grocery stores, wine stores at-tached to grocery stores, private liquor stores or dépanneurs (convenience stores).