Wine - Timor-Leste

The Wine market in Timor-Leste is developing at a steady pace, driven by changing customer preferences and local special circumstances.

Customer preferences: Timor-Leste has seen a shift in customer preferences towards wine consumption in recent years. As the country's economy continues to grow, there is an increasing demand for premium and imported wines. Customers are becoming more sophisticated in their taste and are willing to explore different varieties and brands. Additionally, there is a growing trend of wine being considered as a social drink, especially among the younger population. This has led to an increase in wine consumption in social gatherings and events.

Trends in the market: One of the key trends in the wine market in Timor-Leste is the rise in consumption of red wine. Red wine is often associated with health benefits, such as antioxidants and heart health, which has contributed to its popularity among consumers. Moreover, red wine is often perceived as a more sophisticated and elegant choice, further driving its demand. Another trend in the market is the growing popularity of sparkling wines and champagne. These beverages are often associated with celebrations and special occasions, and their consumption has increased with the rise in disposable income and the desire for luxury experiences.

Local special circumstances: Timor-Leste's geographical location and climate present unique challenges for the wine market. The country has a tropical climate, which is not ideal for grape cultivation. As a result, most of the wine consumed in Timor-Leste is imported from other countries. This reliance on imports can lead to higher prices for consumers, as transportation costs and import taxes are added to the final price. However, this has also created an opportunity for local businesses to import and distribute a wide variety of wines from different regions, catering to the diverse preferences of consumers.

Underlying macroeconomic factors: The development of the wine market in Timor-Leste is closely linked to the country's overall economic growth. As the economy continues to expand, there is an increase in disposable income, allowing consumers to spend more on luxury items such as wine. Moreover, the tourism sector in Timor-Leste has been growing rapidly, attracting international visitors who are interested in experiencing the local culture and cuisine. This has created a demand for wine in hotels, restaurants, and bars, further driving the market growth. In conclusion, the wine market in Timor-Leste is experiencing growth due to changing customer preferences, including a shift towards red wine and an increased demand for sparkling wines. The country's unique geographical location and climate present challenges but also opportunities for businesses to import and distribute a wide variety of wines. The development of the market is closely tied to the country's economic growth and the growth of the tourism sector.

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.