Led by the still wine category, the Singapore wine market is expected to record a compound annual growth rate (CAGR) of 5.1% over the period 2016–2021 to reach a market value of US$1.4bn by 2021, according to leading data and analytics company GlobalData.
The Singaporean wine market grew at a CAGR of 5.5% during 2011–2016.
Still wine outstripped both sparkling and fortified wines to emerge as the most valuable category during the reporting period.
GlobalData’s latest report: ‘Top Growth Opportunities: Wine in Singapore’ forecasts the still wine category to grow at a CAGR of 5.2%, while the sparkling wine category will expand at a CAGR of 5.1% between 2016 and 2021.
The growth of the overall wine market can be primarily attributed to the rapidly growing economy and high disposable incomes, coupled with growing affinity towards premium wine products imported from Australia, France and Chile, said GlobalData.
Ronan Stafford, lead consumer analyst at GlobalData, said the continued growth in the Singaporean economy means consumers are like to spend more, and trade up to more premium offerings of wine.
“Premiumisation opportunities are present across all wine categories, especially within the still and sparkling wine categories, given their strong growth rates.”
The fortified wine category, on the other hand, registered the slowest value growth during 2011–2016.
It is expected to grow at a lower CAGR of 3.2% from 2016 to 2021.
“Consumers within this category are less likely to trade-up to premium offerings, so manufacturers charging premium prices will need to thoroughly justify it to the consumer,” Stafford added.
GlobalData’s report also reveals that alcohol sin-taxes coupled with a large Muslim population, who do not drink alcohol, are limiting factors in the Singapore wine market.
“The low private label presence highlights the premium wine preferences of local consumers in Singapore,” Stafford said.
“The fixed ‘sin’ tax on alcohol is also likely to affect the demand for cheaper private label wines, as consumers are likely to give preference to higher quality wines which better justify their higher price points.
“Therefore, premiumisation opportunities are rife within the market, given that producers need not worry about a significant presence of low-price private label products.”