When the most recent study commissioned by Vinexpo was released recently, the industry was abuzz with questions.

The study, the fifth since 2002, was commissioned by Vinexpo and conducted by the International Wine and Spirits Record (IWSR). The detailed report includes data on global consumption, production and international trade for wines and spirits, with forecasts to 2010, and covers 28 wine-producing countries and 114 markets for wine and spirits consumption.

The U.S. is forecast to be the largest wine-consuming country in the world, according to the Vinexpo/IWSR study. Americans will consume nearly 29 million hectoliters (approximately 766 million U.S. gallons) of wine in 2010, which is equivalent to over 3.8 billion bottles.

From 2001 to 2005, the consumption of still and sparkling wine has seen steady growth, increasing an average of 4 percent a year. This increase is projected to continue through 2010 and will make the U.S. the largest wine consumer in the world, in front of both Italy and France. (Note that these figures look at absolute volumes, not consumption per person.)

A previous Vinexpo/IWSR study predicted that the U.S would become the leading wine-consuming country by 2008. However, due to a projected slowdown of the American economy--including a drop in the real estate market, the 2008 presidential elections and higher oil prices--the forecast has been pushed back to 2010.

The study results also claimed the following:

• The U.S is projected to greatly increase its consumption.

In 2005, consumption per capita was 11.7 liters (3.09 U.S. gallons) per year, per person (of legal drinking age). An increase to 12.3 liters (3.25 U.S. gallons) is projected by 2010.

• Sales of still wine in terms of both value and volume are increasing.

Sales of still wine in terms of value reached over $19 billion in 2005 (+22.49 percent versus 2001). Sales in terms of value are projected to increase a further 18.7 percent between 2005 and 2010, reaching almost $23 billion.

Over the 10-year period from 2001 to 2010, retail wine sales will have increased by 45.41 percent while consumption in volume will have progressed by 40.91 percent over the same period.

• All market segments are increasing.

Wine retailing for $5 or less represented 46.97 percent (in volume) of all the still wine consumed in 2005--the consumption rate of increase for these wines is projected to be 8.2 percent from 2005 to 2010.

Wines retailing between $5-$10 are projected to see an increase of 18.35 percent in sales between 2005 to 2010, and wines retailing for $10 or more, an increase of 12.87 percent for the same time period.

• Americans consume more red wine than rosé and white wine.

Since 2004, Americans have been consuming more red wine than rosé and white wine.

In 2005, red wine consumption represented 41.69 percent of the total still wine consumption whereas white wine represented 40.9 percent and rosé wine, 17.41 percent.

From 2005 to 2010, the Vinexpo/IWSR study projects an even larger growth in the consumption of red wine, a further increase of 28.79 percent.

• Consumption of imported wine is rapidly growing.

In 2005, imported wines in the world represented 27.35 percent of all the wine consumed. From 2005 to 2010, consumption is predicted to grow by 26.85 percent.

• Currently, the U.S. is the third largest wine importer in the world (behind Germany and Great Britain).

The projection for 2010 is an increase of 28.65 percent in the consumption of imported wine--which would represent 29.32 percent of the total wine consumed in the U.S.--and was initially reported as making the U.S. the second largest wine importer in the world. That was revised to third position (see below).

• Spirit consumption is rising 2.7 percent a year.

The consumption of spirits will reach nearly 184 million cases of 9 liter bottles in 2010, which is an increase of 27.01 percent since 2001.

Annual consumption of spirits per capita (of legal drinking age) in the U.S. will rise from 7.2 (1.96 U.S. gallons) to 7.6 liters (2.01 U.S. gallons) between 2005 and 2010.

• The growth categories for spirits are tequila, cognac and vodka.

Tequila consumption is predicted to increase 38.24 percent between 2005 and 2010, to reach 9,159 million cases. It is expected to once again grow by 44.99 percent between 2005 and 2010. In that year tequila consumption is expected to overtake that of gin in the U.S.

The U.S., the largest market for cognac worldwide, is projected to see a further increase of more than a million cases of 9 liters (+34.77 percent over 10 years from 2001 to 2010).

Vodka, the most consumed spirit in the U.S., is projected to see a rise in consumption of 13.89 percent from 2005 to 2010. It will represent 28.82 percent of all the spirits consumed by Americans.

An Interview with Vinexpo CEO Robert Beynat

To clarify these points we interviewed Vinexpo CEO Robert Beynat.

WBM: You say that by 2010, the U.S. will be in the second importing position. Behind the U.K. or Germany? And is that gain because Germany and the U.K. have also gained, but at a slower rate, or is the U.S. gain because of a decline in the U.K. and/or Germany importing positions?

Beynat: Sopexa, the U.S. arm of the French wine marketing agency, reported to WBM that they just made a mistake. The U.S. is in the 3rd position now and will remain there at least until 2010.

WBM: What about the consumption figures? Have Germany and the U.K also grown in consumption or have they dropped?

Beynat: Both Germany and the U.K. will continue to have consumption growth; Germany will grow an estimated 7.31 percent from 2005 - 2010 and the U.K. 8.29 percent for the same time span.

WBM: Your summary data predicts the biggest growth in the mid-market wine retailing between $5 and $10. Do you expect a rise in the over-$10 market after 2010 as wine drinkers in the mid- category move up in price?

Beynat: While all indicators point towards continued growth, we can only estimate up to 2010 at this point, and there is a predicted growth of 17.2 percent for wines retailing more than $10 from 2005 - 2010.

WBM: I am confused by this statement from the world study overview: "All retail wine sales continue to grow, with higher-priced wines growing the fastest."

Beynat: Retail sales of wines between $5 and $10 per bottle are predicted to grow by 9.12 percent between 2005 and 2010 while wines retailing for more than $10 a bottle will increase by 17.2 percent over the same period. The consumption pattern in terms of price range is different for the U.S. than the rest of the world. And the trends between 2005 and 2010 are different as well.

WBM: Do you think that spirits growth could impact wine consumption?

Beynat: Wine and spirits are not directly competing with each other because they're both growing worldwide. In the U.S., it is beer consumption that is suffering from the wine and spirit growth.

WBM: Does this data suggest, then, that the world's producers should place more emphasis on sales and marketing to the U.S.? Should there be higher allocations? Greater numbers exported?

Beynat: Consumption of imported wine is actually growing a bit faster in the U.S. than the rest of the world. But at the same time, exports of American wine are also growing. The overall wine and spirit market is becoming more and more global for all the world's players.

WBM: What plans does Vinexpo have to direct its efforts more towards the American market? Will you repeat another Vinexpo Americas?

Beyant: We would like to hold another Vinexpo in the U.S. in 2010. We are currently working on this, and nothing is set yet.

WBM: What has caused the consumption growth in the U.S.?

Beynat: Consumption growth in the U.S. is due to many factors. Among them, consumption growth per capita (with a greater potential growth versus the consuming and producing countries in Europe) will continue to increase. And with the consolidation of distributors in middle America, it is much easier for new wine ventures to occur. Finally, increased consumption in the Hispanic community is also adding to the growth.

The U.K. Spin

The U.K.-focused report is also interesting for U.S. wine producers. British wine drinkers are steadily buying more expensive wines. Researchers say that sales of bottles priced at more than $5 accounted for nearly half of volume in 2005, a rise of 40 percent since 2001. The amount of wine consumed each year by the average Briton is also predicted to grow at 3.7 percent in the 10 years from 2001 to 2010--three and a half times faster than the growth in world consumption. Remember that U.K. supermarket sales usually hover around $9 (£5) and that the U.K. is predicted to buy more expensive wines. That could bode well for U.S. producers exporting to that market.

The Youth Market

The study to which Mr. Beynat referred about the trends of younger consumers found that winemakers and retailers must make a bigger effort to interest young adults to overcome wine's complex image as reported in the study's release in London in March. (The study was released first in London a month earlier than in the U.S.)

But compared with a similar study 10 years ago, wine is much more acceptable now to this age group thanks largely to branding, improved marketing and changes in attitudes to wine.

The research was carried out in five countries by Vinexpo and France's Brulé, Ville & Associés (BVA), and was based on focus groups in the U.K., Belgium, France, USA and Japan.

But how deep was the study? It was only a look at 100 occasional wine drinkers aged 20-25 (20 each in London, Paris, Brussels, New York and Tokyo). The subjects, all focus group participants, said they are curious about wine, but put off by too many choices and styles, complex labeling and wine's stuffy image.

That contrasts with decanter.com's recent study of over 500 18-25 year olds in the U.K. that showed that this age group is indeed interested in wine and eager to learn more.

The Vinexpo study results from all countries showed that the 20-25 year olds want to have a better understanding of wine which they perceive as refined, cultivated and a part of growing up. Wine is associated with sophisticated enjoyment and even health benefits, they said.

The study uncovered prejudices from this group:

•   Price: wine is perceived to be expensive.

•   Elitism: the wine culture and vocabulary exclude young adults.

•   Difficult choices: young consumers lack understanding of the many different wines and wine styles.

•   Plethora of choices: there is a bewildering range of choices and confusing labels.

As far as packaging is concerned, there is a clear division between Europe--where the groups liked traditional bottles and labels--and the U.S. and Japan, where young adults want an entirely new kind of presentation with different bottle shapes and colors.

The study also showed that national cultures play an important part in the perceptions of wine. In France and Belgium, wine is a part of everyday life since childhood. In the U.K, by contrast, 20-25 year olds are just now becoming more familiar with wine, and drinking wine is viewed as less exclusive. In the U.S. wine drinking is associated with the culture of Europe and reserved for special occasions while in Japan drinking wine is considered exotic and reserved for very special occasions.

Compared with a similar Vinexpo study carried out in 1997, wine is now drunk more widely by the 20-25 year old age group and is seen as a quality product.

Vinexpo 2007 will be held from June 17-21 in Bordeaux, France and will host 2,400 exhibitors from 44 countries, attracting 50,000 visitors from 138 countries. wbm

Lisa Shara Hall has been a Senior Editor for WBM since 1998. She is the author of Wines of the Pacific Northwest and co-author of The Food Lover's Companion to Portland, as well as the first candidate in Oregon for the Master of Wine qualification.