Can Amsterdam provide some of the answers to the global wine shortage?
By Richard Siddle
Uncertainty seems to be the prevailing mood in the bulk wine sector, which will be beating an eager path to Amsterdam next week, where the annual World Bulk Wine Exhibition (WBWE) is holding its 9th fair.
Triggered by the global wine shortage, which will make it more challenging than ever for buyers to source the right wine at the right price, this feeling of uncertainty is one which will inevitably overshadow proceedings at the event.
Europe is facing its smallest harvest in decades, down by more than 20% from 18.2 billion litres in 2013/2014 to 14.5 billion this year. The EC says that this year’s regional harvest is expected to be the worst since 1982, with production down by 14% from 2016.
The top three wine producing countries – Spain, Italy and France, which between them produce over half of the world’s wines - have all recorded their lowest harvest for decades due to a mixture of frosts, rains and extreme hot weather during the growing season, which saw many grape crops being decimated.
"It has not been uncommon for one of these three producers to have an off year, but rarely have we seen such poor harvests for all three simultaneously," said Stephen Rannekleiv, a global drinks analyst at Rabobank. The shortages are already having an effect, with the price of some wine varieties increasing by up to 10% this year.
Germany too saw volumes plummet to record lows, while Greek production was also down by around 10%.
While volumes increased in parts of South America compared to the low levels of 2016, Chile’s remained low, and was down 6% on 2016. South Africa, meanwhile, managed to achieve a small (2%) increase in volumes, while Australia’s production was up by 6% and New Zealand also fared well.
These increases in output, however, are nowhere near sufficient to plug the gap created by shortages elsewhere, and as a result this year’s global wine production is estimated to be down by more than 8% on last year.
"We still foresee a dramatic decline in wine availability going into 2018," confirmed Rannekleiv. "We expect the decline [in consumption] to be felt most tangibly in the lower-priced tiers."
All of which is not necessarily as bleak a picture as you might imagine for the bulk wine scarcity, where one country’s loss can most certainly be another country’s gain. The life saver for many producers is that the quality of wine being produced in 2017 is said to be very high, which aligned with the drop in production, offers an opportunity to raise prices and the chance for astute producers to look to new markets in which to position themselves.
“Crises – such as the drop in production of the latest harvest– bring opportunities to look for added value in our wines, the chance to prioritise quality producers and find new market niches,” confirmed WBWE general manager Romero de Condés. “This is what the WBWE offers, and why, particularly in a year of low production such as this, that buyers and producers look to participate and not miss the boat on new opportunities.”
Which will put even more focus on next week’s WBWE where buyers will be on the look out not only for quantity but quality in their bulk wine supply.
With a lot less wine to buy the focus on the WBWE, already regarded as the largest fair in the world devoted to bulk wine, and where more than 75% of the bulk wine exported will be represented, will be even more important than normal.
It becomes an even more important meeting point for producers, buyers, retailers, importers and distributors all looking for the best grape prices at the right quality.
This year’s event will also provide a backdrop for a series of keynotes talks and panel debates as part of an extended conference programme.
On the opening day, for example, attendees will get the chance to hear from Yaan Juban from the International Organisation of Vine and Wine (OIV), who will discuss the global wine market during 2016 with a special emphasis on bulk wine.
Leading logistics supplier, JF Hillebrand will give its take on the global bulk wine and spirits market in a talk by Marc Graham.
There will also be the chance to turn the spotlight on important and emerging bulk wine markets, particularly in light of recent Free Trade Agreements.
The Canadian bulk wine market will be the subject of one session with further debates looking at the opportunities in Eastern Europe as a source of bulk wine and Central Africa as a market for bulk wine buyers.
Other highlights include a look at the value added wines being made by Spanish co-operatives with Binevenido Amoros, technician at the Wine Department of Agri-food Cooperatives in Spain. Cruz Liljegren, business wine writer and bulk wine broker, will give his take on what he sees as the key trends in private label wines.
On a more technical note, Benoit Verdier, director of oenological development at Seguin-Morea will consider the effect of using wood in the elaboration and wine ageing of bulk wines, while Alberto Arellano, chief executive of San Vaerlo distilleries and María Dolores Corvinos, project manager at Innotecno Development Ltd in Spain will look at how organic waste from bulk wine can be used in providing electrical power.
But perhaps the best place to start is to assess and analyse the medal winners in the show’s bulk wine competition, which is open to those wineries producing a minimum quantity of 10,000 litres. If you’re looking for quality then that’s where you’ll find it. But hurry you won’t be on your own.
*The World Bulk Wine Exhibition is being held at the Amsterdam RAI between November 21-22.