Wine industry bullish about economic outlook, while most looking to expand exports to new markets
The wine supply chain is getting shorter, as increasing number of buyers procure their wine direct from estates or wineries, while procurement via the traditional channels such as importers or distributors will decline considerably by 2020.
This is according to a study conducted by Prowein in collaboration with Geisenheim University, based on a poll of 1,500 wine sector experts from 46 countries.
“This means difficult times lie ahead for sales agents,” said the report. Small wine growing estates will also have to gear up to dealing with an increasing number of direct enquiries.
Other key findings of the survey reveal that the majority of wine industry experts rate their current situation and future economic outlook as “satisfactory to good”.
However, wine producers overall considered their future in a more optimistic light than wine marketers, who are in direct contact with end users. And independent winemakers are more optimistic about the future than cooperatives and larger wineries.
International and German speciality retailers focused on wine are the least satisfied with their prospects. German wine producers and marketers are generally more pessimistic about future economic prospects than those from Spain and Italy who have very positive expectations. This may be more a reflection of typical “German caution” and “Mediterranean optimism” than anything, noted the study.
The top five most attractive markets for producers are Germany, the US, the UK, Belgium and Switzerland. Other markets producers are keen on breaking into include Hong Kong, South Korea and Scandinavia. Meanwhile, Italy, Russia, France and Brazil were cited as less attractive markets from the wine producers’ perspective.
Those markets predicted to undergo the greatest rise in economic appeal include Russia, Hong Kong, Poland, South Korea, Brazil and China.
“It is clear that export markets outside the traditional European wine countries will in future be of greater importance for wine producers,” said the report.
The lowest improvements are forecast for the UK, France, Austria, Italy and Belgium. In Italy and France per capita wine consumption is still waning, and domestic wine is predominantly consumed in both markets, meaning fewer opportunities for wine exporters.
Brexit in the UK and constant tax increases make the UK less attractive as a potential export market, compared to other countries.
As for the most risky markets, producers said that Russia, Brazil, China, the UK and Hong Kong offered the most uncertain futures. Those markets which are highly attractive and offer the lowest risk include Poland, Australia, Japan, Canada and Scandinavia. These are countries where wine consumption is on the up.
On the other hand, those markets which offer low attractiveness and high risk include the UK and Italy. And nine out of ten of leading international wine producers plan to expand their export operations by 2020.
Among wine exporters from the large European producing countries including France, Italy and Sapin, this proportion stands at 100%. In Germany, however, which exports less, the proportion is 55%.
Those countries which producers most often said they wish to extend their exporting operations to include the US, Germany, the UK and China. It is predominantly China, Hong Kong Russia, Japan, Australia, South Korea and Brazil that are named as new export destinations with the most disproportionate frequency relative to their currently low importance.
“For European wine producers, successfully operating on these geographically and culturally distant markets in Asia and Oceania represents a great challenge over the next few reports,” stated the report.
Two thirds of international marketers said they wanted to include wines from new countries of origin in their product range, though among German marketers the figure is only a third. This is largely because Germany’s wine range is already extremely international.
Those countries which marketers were most interested in including in their portfolios included wines from Germany, Spain, Italy, Portugal and France.
On the other hand, German marketers showed the highest level of interest in the countries of Austria, Portugal, Italy and Gemany, followed by Spain, France and South Africa.