December 15, 2022
MANILA – The Philippines is among the “most exciting” wine markets in the world, driven by the increase in consumption among young people, the United States Department of Agriculture (USDA) said.
“Despite tariffs and taxes that inflate the final price by 75 percent, the weak peso, and supply chain setbacks, traders forecast total wine exports to [the] Philippines will reach $60 million in 2022, and will increase 5 percent annually over the next three years to $70 million,” the USDA said in a report.
Wine imports in 2025, which the USDA expects to reach $70 million, are seen to be 16 percent higher than the $60 million pegged for this year.
The figure also suggests an increment of 27 percent from the 2019 or prepandemic level of $55 million.
According to the USDA, at least 20 million people who earn $12,700 or P706,148.08 annually “have sufficient income to purchase wines occasionally.”
“Continued growth in wine consumption is presaged by the country’s young, fast growing, and highly urbanized population, with increasingly sophisticated tastes and ever-growing access to supermarkets and online stores,” it added.
The country is seen among the “most exciting wine markets” worldwide, especially coming from a very low base, as it accounts for less than 1 percent of roughly 2.7 billion liters of alcohol consumed annually.
“Traders are capitalizing on the growing health awareness among consumers by emphasizing the reported health benefits of moderate wine consumption,” it said.
“The industry is reporting a shift in consumer preference from beer and spirits to wine. While the Philippines produces almost no wine, it is a major producer of relatively inexpensive beer and spirits,” it added.
The confluence of higher prices and increased sales of mid-priced and premium wines will raise the average price by 20 to 30 percent in the coming years, USDA said.
“At the same time, brisk sales of entry-level, value-priced U.S. wines are expected to continue as more consumers become interested in wine, and the hospitality and food service sectors ease into postpandemic recovery mode,” it said.
The United States has been the Philippines’ leading wine supplier for the past two decades, according to the USDA.
In 2021 alone, US wine exports to the country hit a record $20 million “as consumers temporarily traded up to more expensive wines during the coronavirus lockdown.”
“In 2021, the Philippines was the largest U.S. wine market in the region, surpassing major transshipment destinations, such as Singapore and Vietnam,” the USDA said.
US wine export sales this year are projected to level off at $17 million, it added.