BC Wine Trends for 2019

Julian

6 years ago

Reading Time: 5 minutes

This is my third annual article on BC wine trends. As we end the decade, there are significant headwinds for British Columbia wine sales. Is 2019 the year BC Wine sales start to lag?

Headwinds!

The first full year of marijuana legalization will negatively impact lower priced wine sales. Currently, there is a supply shortage for legal weed, but that will soon be corrected and will definitely impact wine sales.

Secondly, there is a recession on the horizon. Mortgage payments have already increased due to higher interest rates, salaries are stagnating and Canadians will have less disposable income. This will impact the BC Wine drinkers ability to buy premium wines.

Thirdly there is no end in site to the archaic interprovincial wine shipment regulation that limits the shipment of BC wine to Eastern Canada.

Our politicians sacrificed the BC wine in grocery store exclusivity to sign the USMCT trade agreement. California, Oregon and Washinton State wines will directly compete with BC wines in the lower priced wine segment targeted by Grocery wine sales. Unless of course, the new US Congress fails to pass Trump’s trade bill, which is a strong possibility. BC wine exclusivity on grocery store shelves may be phased out by November 2019.

Storms are appearing on the tourism front! The Chinese government is urging citizens to “fully assess the risks of going to Canada for tourism” as diplomatic tensions between the two countries continue to escalate. This will negatively impact BC winery direct to customer sales this Summer .<6>.

The costs of making BC wine continues to exceed the pace at which wineries can increase wine prices. BC wines grapes continue to be in short supply and grape costs increased again in 2018.

Next, let’s talk about global trends that won’t make it to BC Wine.

Global trends that won’t make it “Big” in BC wine

Canned wine sales take off

Wine in a can may be perceived as less elegant than the traditional bottle, however, its sales have taken off. Beverage alcohol market research firms say that US retail canned wine sales rose by 43% from June 2017 to June 2018 <1>. Canned wine isn’t new either, it dates back to around 1936 in the US. BC VQA regulations only allow for the sale of BC Wine in bottles so unfortunately, this trend won’t happen for BC VQA wines.

However, Recline Ridge is selling their red and white wine in a Can without the BC VQA destination.

With this background, and a quarter of the year already gone, time to make some predictions for BC Wine 2019.

2019 BC Wine Trends

1. BC Winery aquisitions will continue

With the 2017 acquisition of Gray Monk Estate Winery, Tinhorn Creek Vineyards, and Black Hills Estate Winery, Andrew Peller Ltd. became the market leader of quality VQA wines in the BC, almost doubling their market share to an estimated 23% of the BC VQA business. <5>. Winery acquisitions and vineyard consolidation will continue strong in 2019.

2. Rose´All Day

Rosé wine will continue to increase in popularity, and there’ll be no slow-down drinking it year-round. While global rosé will see an uptick, going strong are those from the Languedoc-Roussillon (49% increase in scans last year) and Provence (43% increase in scans last year) regions of France. <7>

BC Rose´wines will continue to grow at a >10% annual growth rate. 2018 YoY growth rate was an amazing 19%! For BC Rose´ recommendations see the earlier post Top 10 BC Rosé for Summer on the Patio

3. BC Wineries ramping up direct wine sales

Phantom Creek Estate Winery opens in spring 2019

In the Okanagan Valley, we are seeing a number of wineries adding full-service restaurants to their facilities. The push to sell more wine from their wine shop, wine club and restaurant is a strong business driver.

Phantom Creek Estate Winery located in Oliver has its sights set on opening this spring. On Black Sage Road where a multitude of other wineries operate nearby, they’re building a $100 million, 79,000 square foot facility with a two-storey hospitality centre, restaurant and outdoor amphitheatre, all positioned to take in a view south down the valley to Osoyoos Lake.

In Summer of 2018 Boucherie broke ground on a 15,000 square foot visitor center, dining lounge, and private tasting room in West Kelowna. This project built by Ciccozzi Architecture will take two years and become one of the grandest winery experience centers in British Columbia.

Cedar Creek is finishing construction on a new, year-round restaurant,
which will feature a revolving menu of the finest local ingredients,
paired with our iconic, award-winning wines. The facility is expected to in late May 2019.

In the US, tasting room visitation in Napa and Sonoma has trended downward for the past five years due to increased tasting fees and a decrease in the number of wineries visited per trip.<10> In British Columbia, we should see growth in direct wine sales this year as long as the tasting fees remain reasonable at the opened facilities.

4. More Natural Wines

Minimal intervention winemaking results in lighter, fresher wines made for easy drinking – and it’s a trend that’s definitely on the rise. Natural wines are already a hot topic in the wine world and don’t expect them to be going anywhere any time soon. <9>