The wine landscape of Norway

Sunday, 5. August 2018 - 15:45

Tone Veseth, product manager, Vinmonopolet

Much like Sweden, Finland, Iceland and Canada, Norway has a government-owned Monopoly. However, many wine sales also come from the duty free shops and border trade.
 
Vinmonopolet
Norway’s monopoly, Vinmonopolet, works within the framework provided by the Vinmonopol Act and the 1989 Alcohol Act, the latter of which aims “to limit the social and personal damage which alcohol can cause by restricting consumption of alcoholic beverages”. Vinmonopolet is the only company in Norway that’s allowed to distribute alcohol with alcohol content higher than 4.75%. Seeing that Norway has always been a beer country with little or no tradition for wine consumption, some time has elapsed between when the monopoly was established in 1922, when the ban on alcohol was lifted, to the situation today, where Vinmonopolet offers a wide and varied selection, with more than 20,000 products available.  Vinmonopolet now has more than 330 shops nationwide and by the end of 2018 this figure should reach a total of 340 shops. This ensures that 96.5 percent of the population live within 30 km of the nearest shop. 

Up until 1996 the company either produced or imported all the alcohol it sold, but it had to change its ways when the European Free Trade Association pointed out “the monopoly was in violation of the EEA [European Economic Area] agreement”. After this, Norway’s market opened to wine importers who could buy wine abroad and either sell it to the monopoly, or directly to the restaurant trade. Today there are more than 500 import licences held, which obviously is way too many for such a small country. 

Given the very strict alcohol legislation in Norway, it is hard for importers of wine to communicate their products to the consumers. The government keeps taxes on alcohol high and limit access to the regular stores, which close at 6pm during the week and at 3pm on Saturdays. This is due to the fact that their aim of trading in alcohol is not to make a profit, but to decrease alcohol related diseases and deaths; in 2016 there were 336 registered alcohol-related deaths in Norway as opposed to 249 in 2015. 

Wine consumption
Norwegians drink an average of nearly 7 litres of pure alcohol a year; the amount increased sharply after 1990 until 2008, when it stabilised. Norwegian men tend to drink more often and twice as much as women; older people drink more often than younger people, but they paradoxically drink less. 

The tricky part about estimating sales of alcohol in Norway is that the official statistics only state what has been sold through the monopoly. They do not show the sales through duty free and border trade: Norway and Sweden share a very long common border and alcohol taxes are lower in Sweden, which encourages a significant percent of the Norwegian population to travel across the border to do their shopping of wine and other alcoholic beverages. There are no reliable sales figures on this trade. 

There are statistics, however, on sales from the airport duty free shops, where Norwegians buy their quote upon arrival. These sales have an impact: in 2015, the monopoly saw a reduction in volume of -0.8 percent. The following year it happened again – sales dropped by -0.8%. The explanation is the two additional bottles of wine that every traveller is now allowed to bring into the country without paying extra duties. The total is now six bottles of wine, or four bottles of wine and one bottle of spirits.

The lack of a wine culture
Norway lacks a traditional wine culture. It has not been customary to consume alcohol during the week; until recently, Norwegians would wait until the weekend, and then binge drink. With the advent of low cost airlines and increased direct flights to many continental and intercontinental destinations, Norwegians now travel a lot and enjoy the food and wine culture of the countries they visit, and seek to adopt the same way of life back home. This has resulted in a new tolerance and acceptance of a wine culture, which allows the average person to enjoy a glass of wine even on a Tuesday. The consumption per capita has not increased dramatically; it is simply no longer concentrated on Fridays and Saturday. (Which is not to say that binge drinking has gone away.)

Wine trends
Monika Wessel and Tone Veseth, product managers at Vinmonopolet, look to the latest trends – including those that haven’t yet shown up on the sales statistics, and which may not have even reached the country yet.

They use their understanding to create tender specifications, which are released six to 12 months ahead of the launch of their news, to ensure that importers have enough time to find wines to match the specifications. This way, Norwegians can stay in step with what’s happening elsewhere.

There is a big focus on organic and biodynamic wines, with the segment seeing a tenfold increase in volume sold in the past decade; 0.5m litres of organic/biodynamic wines were sold in 2007, compared with five million litres now sold each year.  Organic and biodynamic wines represent up to 10 percent of the wine sold by the monopoly. The enormous increase is partly due to big brands being certified organic. An example is one of the most famous wines sold in Norway, “the stick wine” (Zaccagnini Montepulciano d’Abruzzo) which alone has an annual production of 0.5m litres. 

In general, Norwegians are fairly traditional in their wine preferences as opposed to neighbouring Sweden where New World wines have had a strong standing for years. The classic Old World wine countries have always ranked highest in the sales listings in Norway. This is still the case, but changes are underway. The current wine trends in Norway tend towards the lighter, fruiter styles of wines with a growing interest in New World wines, specifically from the US. Pinot Noir and Gamay are grapes that have become more popular, and an awareness of natural and vegan wines is also rising. 

Even though reds from Italy are still favoured, New World and non-classical red wine countries like the USA, Austria, Hungary, Lebanon and Germany are all on the rise. In the white wine segment, Germany has been on top since 2005 but is now in decline, whereas white wines from countries like Chile, Australia, New Zealand, Austria, Spain and South Africa are growing. 

The sparkling wine segment has been dominated by Prosecco for years. Sales of this product are now finally flattening out and other sparkling wines are gaining momentum. Franciacorta from Lombardy and the different types of Crémants of France are increasing in popularity. Champagne and Cava remain stable. Rosé has become more and more popular in the past few years, particularly after direct flights from Oslo to Nice were introduced a few years ago and the French Riviera got flooded with thirsty Norwegians. Sales of French rosé increased 12.8% between 2016 and 2017, while Italian rosé sales gained 31.4% on 2016.

In sum, red wine sales has seen a steadily decreased since 2013, but red still accounts for twice the volume as whites. There was a tiny (-0.4 percent) dip in white wine sales between 2016 and 2017, but this may have been caused by a bad summer, which often influences the white, rosé and sparkling segments. Both rosé and sparkling have seen sales increases in recent years – rosé is up 5.3% from 2016. 

Willingness to pay
The average Norwegian will spend somewhere around 120.00NOK ($14.45) to 130.00 NOK on a bottle of wine. Around 1 June 2018, an updated customer segmentation report will be released by the monopoly, but product manager Monika Wessel can already reveal that the willingness to pay more per bottle has increased. 

Bag-in-box
Norway is THE country of bag-in-box. With more than 60% of all wine being sold in these 3 litre containers it is safe to say that the bag-in-box has been a great success amongst the common men and women. With this boom in sales of the past years a demand for higher quality in bag-in-box has arisen. Even the monetary strong population who normally drink 30,00 euro wines during the week might buy boxes during the weekdays, however they will go for the higher end selection.  

Where do the Norwegians drink?
Wine bars are popping up all over these days, not only in Oslo, but also in the other major cities like Bergen, Stavanger and Trondheim. Wine is becoming increasingly popular with the younger generation and with 100 sommeliers completing their degree every year there are plenty of knowledgeable staff in both wine bars and restaurants to serve them. Recently The Norwegian Sommelier Association, in cooperation with KapitalVin, presented the first edition of “Norway’s Best Wine List”, an annual award to praise the restaurants with the best wine lists nation wide. This year’s award went to Park Hotel Vossevangen, which is located off the beaten track in Voss in the western part of the country – it is not a place a lot of people visit, which may be the reason why the restaurant still has such a remarkable selection of old vintages and rare wines at very reasonable prices. 

Apart from drinking wine in wine bars and at restaurants a lot of Norwegians tend to enjoy a couple of bottles of wine with good friends before they go out in the weekends. This has been common for many years but previously it was mostly beer (and to a certain degree moonshine) that was being consumed at these “pre-parties” or parties in general. The reason why people drink at home before they go out is simply because of the price of alcohol in clubs and bars; along with the high alcohol taxes, prices are sometimes three times that of the monopoly. It therefore makes sense for consumers to buy and enjoy wine at home before spending the wee hours of a night in a nightclub where the selection of wine is often remarkably bad.

Another trend of the past few years is a growing awareness of food quality. Close attention is being paid to food additives and people in general are careful about what they eat. At the same time, a passion for good food has increased and there are plenty of regular consumers forming private ‘gourmet clubs’ with friends, where they take turns cooking at each other’s homes. Naturally, of course, there is no such thing as a good meal without a good bottle of wine.
Liora Levi

This article first appeared in Issue 3, 2018 of Meininger's Wine Business International magazine, available by subscription. For more great content, sign up for our weekly newsletter.