Poland is only a small wine market in Europe and due to negligible domestic production, almost all wines are imported.

Value and volume of retail sales. Source: KPMG in Poland based on data from Euromonitor International

Insignificant domestic wine production

There is a very limited wine production in Poland. In 2014, wine production in Poland amounted to 13.4 million litres only, making Polish wine a niche. Presently the number of legally registered wineries is 78, compared to 49 in 2013, cultivating about 700 hectares of vineyards.

Wine is a growth market

Compared to the rest of Europe, wine consumption in Poland is still small. However, Poland is perceived as growth market. Total wine consumption increased by an average of 0.7% annually between 2011 and 2015, amounting to 798 thousand hectolitre (hl) in 2015. Per capita wine consumption in 2015 was 2.1 litres which is below the European average of 23.9 litres. However, despite low wine consumption, wine is becoming increasingly popular in Poland.

Largest wine importer in eastern Europe

Poland is a small wine importer compared to large western European countries such as the United Kingdom and Germany. However, Poland is the largest wine importer in eastern Europe, with wine imports amounting to €212 million in 2015, showing an average annual increase of 1.7% since 2011. Since there is no significant domestic wine production in Poland, wine consumption mainly consists of imported wines.

Source: Eurostat, 2016

 

Although the Polish wine market is open to wines of various origins, the largest suppliers are the traditional wine-producing European countries. Germany is the leading importer with imports amounting to €53.4 million (25.2% of total imports) in 2015. Together, the traditional European wine-producing countries have acquired a strong market position, accounting for 62.9% of total imports.

Wine imports from developing countries amounted to €28.2 million of total wine imports in Poland in 2015 (13.3% of total imports), showing an average annual increase of 5.3% since 2011. Chile is the largest developing country supplying the Polish wine market, followed by Argentina and South Africa. They accounted for respectively 6.3%, 1.0% and 0.7% of total imports in 2015.

There is are also substantial imports coming from Central and eastern European countries due to historic ties. Major suppliers in eastern Europe are: Bulgaria (5.4% of total imports), Moldova (3.3%), Hungary (1.8%) and the Czech Republic (1.7%). More recently, wine imports from Georgia have been increasing, currently amounting to 1.7% of total imports.

Tips:

  • Do not attempt to compete with the traditional wine-producing European countries as this will be too difficult.
  • Develop a Unique Selling Point (USP) around such matters as your (authentic or native) grape variety, sustainability or production process to market your wine in the relatively open Polish wine market.
  • If you are an eastern European supplier, benefit from historic ties by referring to these ties in your product’s story.
  • If you are a Business Support Organisation outside (eastern) Europe, use the unique qualities of your country to brand the country and establish it as an interesting origin.

Wine exports are very limited

Poland is a minor exporter of wine and export quantities and values are very low. Domestic production primarily aims at the domestic wine market. Wine exports from Poland amounted to €5.1 million in 2015, showing an average decrease of 6.9% since 2011. The largest export markets for wine from Poland are its neighbouring eastern European countries, with Ukraine being the most dominant export market, accounting for 61% of all exports.

The wine market in Poland is still in its infancy but is expected to grow rapidly in the coming years. As a result wine exports from Poland are expected to increase in the future. However, wine exports will remain very small in the long term compared to other European countries.

Source: Eurostat, 2016

 

3 . Which trends offer opportunities on the Polish wine market?

Young urban professionals are very influential

Since Poland’s accession to the European Union in 2004, wine availability has improved. Between 2004 and 2013, wine sales in Poland increased by 56%. The country’s wine association expects this growth to continue in the coming years.

The Polish market traditionally consists of sweet and semi-dry wines. These wines are particularly popular amongst a large group of elderly women. However, the growing group of young urban professionals prefers semi-dry and dry wines and seem to favour red wine over white or rosé wine. These young urban professionals are currently driving the development of the emerging Polish wine market. They travel a lot to other wine-consuming countries, copy drinking patterns of those countries and associate wine with Western lifestyles.

Tips:

  • Aim for young urban professionals by aligning your marketing strategy to the needs of this consumer group.
  • If you supply sweet or semi-dry wine, target elderly women by tailoring your marketing strategy to their needs.

Consumers switching from vodka to wine

Traditionally, the Polish market for alcoholic beverages was dominated by vodka. Currently, vodka is regarded as a cheap drink, which is not associated with the sophisticated lifestyle that many Polish consumers strive to lead. As a result, vodka consumption is declining, except for on traditional occasions. Beer and wine are the main replacements. Growing health-consciousness particularly stimulates the switch to wine, as moderate wine consumption is considered to be healthy.

Tips:

  • If you supply branded wine, ensure that your brand is associated with a sophisticated lifestyle.
  • If you supply a low-alcohol wine, Poland may not yet be your best target market.

Emergence of white wine and innovative wine drinks

Red wine currently dominates the Polish wine market. Young urban professionals, who account for most sales, prefer red wine. White wine, rosé and especially innovative wine drinks (for example aromatic wine drinks or wine cocktails) are currently not very popular. In 2013, red wine accounted for 32.1% of total wine sales in Poland. White wine (28%) came second, followed by sparkling wine and champagne (20.5%). Rosé only accounted for 1.8%.

However, the Polish market shows signs of change. The slight increase in consumption of wines other than red wine is largely a spillover effect from trends in western European countries. As many Polish consumers want a lifestyle similar to that of western Europeans and the latter are increasingly drinking white wine, rosé and innovative wine drinks, Polish consumption patterns are expected to change in the long term.

Tip:

  • Polish consumers tend to be more conservative compared to western European consumers. As a result, wine drinks are not very popular in Poland; there is no clear sign yet that Polish consumers will embrace these drinks on the short term.

Following innovation trends

There is a time lag between developments in western European markets and developments in Poland. Fashion trends, such as many aromatic wines and wine cocktails, are not expected to have a significant effect on the Polish market in the near future. The time lag and the small size of the market prevent the rapid adoption of new products. Therefore, innovative packaging such as cans, PET bottles and screw caps are not very popular. Bag-in-box wine only has had some success in the on-trade.

Tips:

  • Use traditional packaging (i.e. classic bottle, labelling and cork) for promotion as they are preferred by the Polish consumer.
  • Look for trends in western European market, providing a preview of new trends that might be adopted by the Polish wine market.

Wine prices are decreasing
Polish consumers have relatively low purchasing power and wine is expensive. Therefore, wine consumption is still limited to young urban professionals which have a higher purchasing power. These consumers are prepared to pay more for their wines than similar consumers in other countries. However, this mainly applies to red wines as Polish consumers are not willing to pay higher prices for white wines.

The high prices of wine are strongly related to the lack of scale in the Polish wine market, complicating efficient distribution. However, current growth in the wine market, and especially the emergence of discounters in wine retailing, should enable scale increases. As prices go down, wine consumption is expected to spread from young urban professionals to a much wider group. This will enable more scale increases and accelerate market growth.

Tips:

  • If you supply a wine for the middle or premium segment, you may benefit from a growing number of consumers who can afford these wines.
  • If you supply a wine for the entry level, you may benefit from rapid growth in consumption of table wine.

Sustainability remains less relevant

Despite the rapid development of the Polish economy, the wine market is still far from developed. Whereas sustainability has become a niche market in western Europe, the Polish wine market is not at all concerned about sustainability. As an illustration, most consumers are not aware of organic or Fairtrade wine.

Tips:

  • Do not invest in organic or Fairtrade certification if you aim to enter the Polish market. The demand is very low.
  • Focus on cost reduction or branding of your product to position it as a sophisticated product.

What competition will you be facing on the Polish wine market?

What are the opportunities and barriers when trying to enter the Polish market?

Growing economic prosperity creates opportunities for new entrants

The high growth rate of the wine market in Poland, 56% between 2004 and 2013, attracts many new suppliers who seek to benefit from the increased demand for wine. Strong market activity in terms of mergers and acquisitions confirms the high expectations for market growth in Poland.

High acceptance of wine from developing countries

The Polish wine market is currently dominated by European suppliers. Up to 85% of imported wine in Poland comes from European countries. However, the lack of a strong domestic wine culture lowers entry barriers for new entrants from less traditional wine sources. Consumers are less prejudiced towards wine qualities from traditional and New World origins. New World wine imports already play an important role. The dominant sources of New World wines are the United States and Chile.

High listing fees complicate entry

Supermarkets in Poland charge relatively high listing fees. The payment of these fees can give suppliers access to supermarket shelves, which can be a profitable business. However, current listing fees in Poland are relatively high in comparison to the amount of sales.

Tips:

  • Aim for long-term contracts and stable trade relationships to prevent your buyer from switching to a new entrant.
  • Use branding and your reputation to ensure stable sales to regular buyers.
  • If you aim for supermarkets, but your brand is not strong enough, find a buyer who already supplies supermarkets and partner up to sell your wine under their brand.

Source: Centre for the Promotion of Imports