Wine - Iceland

The Wine market in Iceland has been experiencing significant growth in recent years, driven by changing customer preferences and local special circumstances.

Customer preferences: Icelandic consumers have developed a growing interest in wine, shifting away from traditional alcoholic beverages such as beer and spirits. This change in preference can be attributed to several factors. Firstly, wine is often perceived as a sophisticated and elegant beverage, appealing to consumers who are looking for a more refined drinking experience. Additionally, the health benefits associated with moderate wine consumption, such as the presence of antioxidants, have also contributed to the increased demand for wine in Iceland.

Trends in the market: One of the key trends in the Icelandic wine market is the rising popularity of organic and biodynamic wines. Consumers in Iceland are becoming increasingly conscious of the environmental impact of their purchasing decisions and are seeking out products that are produced using sustainable practices. This trend is in line with global market developments, where organic and biodynamic wines have gained traction in recent years. Another trend in the Icelandic wine market is the growing demand for wines from specific regions, such as France, Italy, and Spain. Icelandic consumers are becoming more knowledgeable about wine and are seeking out wines from renowned wine-producing regions known for their quality and craftsmanship. This trend reflects a broader global trend where consumers are increasingly interested in exploring wines from different regions and experiencing the unique characteristics of each wine-producing area.

Local special circumstances: Iceland's unique climate and geographical location pose challenges for wine production within the country. The cold temperatures and short growing season make it difficult to cultivate grapes for winemaking. As a result, Iceland relies heavily on imports to meet the demand for wine. This reliance on imports has created opportunities for foreign wine producers to enter the Icelandic market and cater to the growing demand for wine.

Underlying macroeconomic factors: The growth of the wine market in Iceland can be attributed to several underlying macroeconomic factors. Firstly, Iceland has experienced a steady increase in disposable income in recent years, allowing consumers to spend more on discretionary items such as wine. Additionally, the growing tourism industry in Iceland has also contributed to the growth of the wine market. As more tourists visit Iceland, they bring with them their preferences for wine, further driving demand in the market. In conclusion, the Wine market in Iceland has been growing steadily due to changing customer preferences, including a shift towards wine as a preferred alcoholic beverage. The market is also influenced by global trends such as the popularity of organic and biodynamic wines and the demand for wines from specific regions. Iceland's unique climate and geographical location present challenges for wine production, leading to a reliance on imports. The growth of the wine market in Iceland is supported by underlying macroeconomic factors such as increasing disposable income and the growth of the tourism industry.

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.