Wine - Latvia

The Wine market in Latvia is experiencing significant growth and development in recent years. Customer preferences have shifted towards a greater demand for wine, leading to an increase in consumption. This trend can be attributed to several factors, including changing lifestyles, increasing disposable income, and a growing appreciation for wine culture.

Customer preferences: Latvian consumers have shown a growing interest in wine, with an increasing number of people incorporating it into their regular consumption habits. Wine is no longer seen as a luxury item, but rather as a beverage that can be enjoyed on various occasions. This shift in customer preference can be attributed to changing lifestyles, as more people are embracing a more cosmopolitan and sophisticated way of living.

Trends in the market: One of the key trends in the Latvian wine market is the growing popularity of imported wines. Consumers are becoming more adventurous in their wine choices, seeking out different flavors and varieties from around the world. This trend is driven by a desire for new experiences and a greater exposure to international cultures. As a result, there has been an increase in the availability and diversity of imported wines in the market. Another trend in the market is the rise of organic and natural wines. Consumers are becoming more conscious of their health and wellness, and are seeking out products that are perceived as being more natural and environmentally friendly. This has led to an increased demand for organic and biodynamic wines, which are produced without the use of synthetic chemicals or pesticides.

Local special circumstances: Latvia has a long-standing tradition of winemaking, dating back to ancient times. While the country's climate is not ideal for vine cultivation, there are several local wineries that produce small quantities of wine. These local wines are often made from unique grape varieties and reflect the terroir of the region. They cater to a niche market of consumers who appreciate the authenticity and craftsmanship of locally produced wines.

Underlying macroeconomic factors: The growth and development of the wine market in Latvia can also be attributed to underlying macroeconomic factors. The country has experienced steady economic growth in recent years, resulting in an increase in disposable income. This has allowed consumers to spend more on non-essential items, such as wine. Additionally, Latvia's integration into the European Union has facilitated the importation of wines from other EU member states, further diversifying the market and increasing consumer choice. In conclusion, the Wine market in Latvia is experiencing growth and development due to changing customer preferences, including a greater demand for imported wines and a growing interest in organic and natural wines. Local wineries also contribute to the market by offering unique and authentic products. The underlying macroeconomic factors, such as increasing disposable income and EU integration, have further supported the growth of the market. Overall, the wine market in Latvia is poised for continued expansion in the coming years.

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.