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15 December 2021

Market focus: Canada

By Denis Pantini – Osservatorio Vinitaly Nomisma Wine Monitor

Canada ranks fifth among the top ten wine importers with purchases from abroad in excess of 1.7 billion euros; Canada managed to maintain these figures even during 2020 - the year of the outbreak of the pandemic.

Just like Scandinavian countries, wine distribution in Canada is also subject to the rules of public monopolies (on a provincial scale), whose points of sale remained open throughout 2020. Consequently, over and above falling consumption in the on-trade channel, imports remained more or less constant compared to 2019, posting only a slight downturn in value of less than 1%.

Given this resilience, Canada is a market that has grown progressively over the last five years - without too many ups and downs - with an average annual rate of increase (CAGR) of close to 2%.

In this context, the sparkling wine category has grown the most. In keeping with the development that these wines have posted for some years on all world markets, even Canada (where 86% of imports in terms of value concerns bottled still wines) has seen sparkling wines improve their positioning on the domestic market, increasing the value of imports between 2015 and 2019 by about 35%.

The first ten months of 2021, in overall terms, saw a significant increase in wine imports: +10% in values compared to a reduction in volumes of more than 6%, even though this downturn is largely attributable to bulk wines (-18%) and, to a lesser extent, still wines (-3%).

On the contrary, imports of sparkling wines increased by 43% in terms of value and 24% in volume. This recovery was mainly driven by French "bubbly" that achieved an increase of almost 62% (in terms of value), after suffering a downturn of almost 11% in 2020.

As regards Italy, on the other hand, in the context of total wine imports, table 1 shows an increase in value in the first 10 months of 2021 of almost 14%, accompanied by an increase in volume of 4.4% compared to the same period in the previous year.

French and Spanish wines performed better than their Italian counterparts, while Australian wine posted negative variations on both fronts (value and volume). This downturn, among other things, also affected still wines and not only bulk wines. This setback is compounded by the major impact of Chinese tariffs on Australian exports which will see the balance sheet at year-end for this major player very much in the red (-23% for wine exports estimated for 2021 compared to 2020).

As regards imports from Italy, the most significant growth concerned sparkling wines (+35% in terms of value and 28% in volume). This saw an increase in the average import price in this category of almost 6% with the purchase price for Italian sparkling wines improving from 5.8 to 6.1 euros/litre.

On the other hand, imports of Italian bottled still and semi-sparkling wines increased by 10% (compared to 20% of French wines) although quantities fell by 1.2%, thereby indicating an increase in the average price of about 11%, i.e. up from 5 to 5.6 euros/litre; this average price, among other things, is lower than that for Italian sparkling wines exported to the same market, although this difference is not something new: Over the last ten years, the differential in average import prices between Italian sparkling wines and still and semi-sparkling wines has always been greater than 15% to the advantage of the former.

 

Photo Credits Hermes Rivera on Unsplash