Wine industry needs to acknowledge importance of bulk sector, says leading industry expert
A leading wine industry commentator has given his endorsement to bulk wine, and said the wine industry must wise up to the importance of this growing sector.
Despite bulk wine accounting for an increasing proportion of exports, it still tends to operate on the sidelines, according to British wine expert Robert Joseph, who writes in Meiningers that for many in the wine trade, bulk wine “barely exists.”
In an interview with VINEX’s founder and managing director Denys Hornabrook, Joseph points out that the timing of the launch of the service couldn’t come at a better time.
According to the OIV, nearly 40m hL of wine – around 38% of global exports and 14% of production – was being exported in bulk.
Hornabrook estimates that at least a quarter of the world’s wine is currently traded in bulk and it is a sector that is growing, up by 6% annually for the past six years, and expected to continue to increase at a similar rate according to Radobank.
“I’ve never seen so much new bottling-line equipment sitting in dedicated facilities, ready to be used,” said Hornabrook of a recent business trip to China.
The reasons for the growth of the bulk sector are myriad, but the key factors, according to Hornabrook, include the increasing sophistication of flexitanks. At the same time, the quality of the wine has much improved.
In addition, the cost savings offered by bulk shipping can be vital factors for customers such as supermarkets, who are facing stiff competition from low-margin discounters.
The increase in the market share of discounters in the West has also helped boost demand for own label wines, which are traditionally sourced via the bulk sector.
Bulk wine suppliers are also becoming much more attuned to what their customers want.
“They are quiet achievers who don’t draw a lot of attention but have access to a broad acreage of warm climate grapes, and are actually very large in terms of volume and turnover contracts,” says Hornabrook.
“But there are also more premium producers that protect their core brands by setting up subsidiary companies that trade bulk wine.”
Traditionally, most bulk wine businesses were handled by brokers. Vinex, however, enables producers to work with brokers by enabling them to work with them by offering wines on the exchange, which went live at Prowein in 2016.