Wine - Azerbaijan

The Wine market in Azerbaijan has been developing steadily in recent years, driven by changing customer preferences, emerging trends, and local special circumstances.

Customer preferences: Azerbaijan, located at the crossroads of Europe and Asia, has a rich cultural heritage and a long history of winemaking. As a result, there is a strong demand for both domestic and imported wines in the country. Customers in Azerbaijan appreciate quality wines that offer a unique taste and experience. They are increasingly interested in exploring different grape varieties and wine regions from around the world. Red wines are particularly popular among Azerbaijani consumers, followed by white and rosé wines.

Trends in the market: One of the key trends in the wine market in Azerbaijan is the growing popularity of organic and biodynamic wines. Customers are becoming more health-conscious and are seeking wines that are made from organic grapes and produced using sustainable methods. This trend aligns with the global movement towards sustainable and eco-friendly products. As a result, both domestic and imported organic wines are gaining traction in the market. Another trend in the wine market is the increasing demand for sparkling wines. Azerbaijani consumers are embracing the celebratory nature of sparkling wines and are enjoying them on various occasions. This trend is in line with the rising popularity of sparkling wines worldwide. Prosecco, Champagne, and Cava are among the most sought-after sparkling wine varieties in Azerbaijan.

Local special circumstances: Azerbaijan has a unique winemaking tradition that dates back thousands of years. The country is known for its indigenous grape varieties, such as Madrasa, Saperavi, and Shargiya. These local grape varieties contribute to the distinct flavors and characteristics of Azerbaijani wines. The traditional winemaking techniques and cultural significance of wine in Azerbaijan also add to the appeal of domestic wines. Furthermore, Azerbaijan has a growing tourism industry, with an increasing number of international visitors exploring the country. Many tourists are interested in experiencing the local culture, including trying traditional Azerbaijani wines. This presents an opportunity for the wine market to expand and cater to both domestic and international customers.

Underlying macroeconomic factors: The economic growth and increasing disposable income in Azerbaijan have contributed to the development of the wine market. As people's purchasing power increases, they are more willing to spend on premium wines and explore different wine options. Additionally, the government has been supportive of the wine industry, providing incentives and promoting local winemakers. This has helped create a favorable business environment for both domestic and international wine producers. In conclusion, the Wine market in Azerbaijan is experiencing growth and development due to changing customer preferences, emerging trends, local special circumstances, and underlying macroeconomic factors. The demand for quality wines, including organic and sparkling varieties, is on the rise. The unique winemaking tradition and cultural significance of wine in Azerbaijan, along with the growing tourism industry, further contribute to the market's growth.

Data coverage:
The data encompasses B2C enterprises. The at-home market covers retail sales via super- and hypermarkets, eCommerce, convenience stores, or similar sales channels. The out-of-home data encompasses all sales to hotels, restaurants, catering, cafés, bars, and similar hospitality service establishments. Combined numbers encompass both the at-home market and the out-of-home market. Both the at-home and the out-of-home market are valued at retail selling prices including all sales and consumption taxes.

Modeling approach:
Market sizes are determined through a Top-Down approach, building on specific predefined factors for each market segment. As a basis for evaluating markets, we use resources from the Statista platform as well as in-house market research, national statistical offices, international institutions, trade associations, companies, the trade press, and the experience of our analysts. In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, consumer spending (e.g. consumer spending on alcoholic beverages, consumer spending at Hotels, Restaurants etc.), and price level index. This data helps us estimate the market size for each country individually.

Forecasts:
In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the exponential trend smoothing is well suited for forecasting the Alcoholic Drinks market with a projected steady growth. The main drivers are GDP per capita and consumer spending per capita.

Additional notes:
The data is modeled using current exchange rates. The impact of the COVID-19 pandemic and the Russia-Ukraine war are considered at a country-specific level.