Wine 2 Wine

It was a cold evening in January 2014 in Munich when Marc Roisin and I closed the doors on the second, and what would be the last, edition of the Wine Business Innovation Summit: an event that brought together wine producers, distributors, bloggers, innovators and entrepreneurs in a cosy setting to network and exchange ideas on the future of the wine business. WBIS had started attracting attention – notably that of Stevie Kim, managing director of Vinitaly International.

For us, lack of sponsorship – and time – signed the end, but it was the start of something else. Later that same year Wine2Wine was launched in Verona bringing together – on a much larger scale – wine producers, entrepreneurs, influencers, press and to listen to discussions on issues that are changing our business.

Three years later and I finally made it to Verona for the fourth edition. A new format: 30 minute sessions within one larger theme, reduced time lost between sessions and allowed efficient speakers to really shine. Institutional moments, speaker’s corner sessions (similar to Vinocamp), ensured there was a good balance between the politics and the community.

Felicity Carter gave a very concise presentation about how the problems linked to concentrated city tourism is forcing a need for out of town attractions and how wine can answer that. Examples of cooperation between wineries and local businesses and services were reminiscent of the ambitious and unfortunately failed project of Illasi Valleys I was involved in many years ago. Proof that finding the right people to lead them is as important as finding the people to share the idea.

Millenials were, as always, the hot topic – a segment of the population that now accounts for 40% of sales in the US, this generation of personalized, unique experiences that they can rave about – and don’t have to think too much about.

Robert Joseph, the “Wine Thinker” gave a thoroughly entertaining presentation on the morning of day 2 – complete with explosion sounds effects – expressing elements that he sees are likely to change in the wine business including product formats, distribution channels and appellations. Bring in cans, blends, shopping direct from phones and the business looks a lot different form the traditional wine shop. There was also talk of how Australian wineries have cottoned on to putting wines in boxes to facilitate the Chinese gift-giving custom – much like traditional Champagne houses. I’d love to see more Amarone’s in boxes – especially at Christmas.

Sarah Abbott, passionate pro-European, gave a very reassuring seminar on the Brexit situation opening with a quip “we need a drink more than ever!”. A topic that has left the UK beyond divided, her message was that the UK wine and spirits trade association WSTA, is working diligently with high-profile figures in the wine business, politicians and law-makers, to ensure that the industry will continue to get a good deal. The government’s recent move to freeze taxes on alcohol, the first in many years, was an indication of the acknowledgment of the trade’s importance. What will happen by March 2019, no-one knows but it won’t be left to chance.

The sessions and lessons on China proved more food for thought. Ian Ford, founder of the Chinese importer Summergate gave his session on where the Italians are going wrong – adaptable lessons for many markets. His main message was “get out of your comfort zone” and understand that the Chinese are a different population with different customs and cultures, and work with them.

Excellent organisation, time-keeping, availability of presentations after the event : anyone would think this was more Prowein than Vinitaly. Two packed days of different perspectives and know-how, not to mention networking left me a lot to consider. One thing I’m sure of though – I’ll be back to Wine 2 Wine in 2018….

 

 

 

 

 

6th March – Piedmont – Tradition Today….

Sixth March 2017 will mark not only my 4th Anniversary of living in Munich, but also my first full trade event in my new hometown.

Das Piemont: Tradition im Heute

Ten wineries, most of which are not available yet on the German market, will come to Eataly for a walk-around tasting as well as two seminars highlighting the prestigious appellations Barolo, Barbaresco and Roero.

The walk-around tasting will include not only more than 20 Barolo and Barbaresco wines, traditional Vermouths, the rediscovered King of Piedmont white wine Nascetta, smooth Barberas from 2009 to the latest vintage and great value for money Roeros.

The wineries include : Alessandro Rivetti, Bava, Cantine Stroppiana, Giacomo Vico, Giulio Cocchi Spumanti, Malabaila di Canale, Michele Taliano, Veglio Michelino & Figli, Vigneti Luigi Oddero & Figli.

Programme for the day:

Press and trade tasting from 2pm to 5pm

Seminars:

2pm Barolo V Barbaresco

4pm Classic & Aged wines

More info and tickets can be found on: Eventbrite 

 

 

Mature markets regain their attractiveness

According to a new report published yesterday by the UK based wine industry think-tank, Wine Intelligence, in 2015 wine consumption will be driven by the markets of the developed world.

Assessing markets by criteria including sales trends and consumer attitudes and behavior then adding them to key economic measures, WI has come up with a ranking of the top markets for 2015. Four of the top five most attractive markets for wine in 2015 will be in the developed world, with the USA in pole position followed by Switzerland, Germany, and Canada. Despite last year’s dramatic decrease in wine imports in China caused by the government reduction in gifting (see my post on the Chinese market), China retains fifth place.

One interesting note for European markets is that Germany is showing increased attractiveness. A market with big brands and low prices, it seems the German consumers are slowly accepting to pay more for their wines and, after several years of decreasing consumption, market volumes appear to be holding steady.

According to the report, the UK remains an “Established” market under the model’s classification system but based on current trends this is expected to change to “Mature” next year as the recent pattern for volume consumption declines sets in.

In terms of developing markets, UAE made its first appearance in the top 50 following the development of tourism to Abu Dhabi, Dubai and neighbouring Oman.

As Wine Intelligence CEO summed up “some of the mature markets which were looking unattractive a couple of years ago thanks to recession and exchange rates have become more interesting again, while the emerging markets have not come on as fast as perhaps their behaviour was suggesting”.

 

Wine in China – how the market looks now

China is the largest market for red wine and is soon to be one of the largest producers of wine in the world despite not even having a real word for “wine” in the language. The craze for what they call “red alcohol” is taking over and China, with all the pitfalls and complications that can only come in a market this size, is finally taking the place wine producers hoped it would.

Here’s a brief summary of what you need to know about the Chinese market:

Consumption:

1)     Size: China is the fifth largest consumer of wine in the world as well as the largest market in the world for red wine. Forecasts predict figures to grow by 34% in the next 5 years. IWSR predicts an increase of 205% in consumption over the period 2008 – 2017. In the Asia Pacific region (in which all markets forecast double digit growth over the next five years), China is the largest market and imported 30.9m cases of wine in 2013. Consumption was 172million 9 litre cases in 2012, a number that is expected to rise to 224million in 2017.

2)     Consumption Pro-capite: China lies in 36th position in terms of pro capita wine consumption with 1.5lt/p.a. whilst France tops the rankings with 50 litres p.a.

3)   Typology of wines: China has seen a rise in consumption of not only red wine, but also white and rose. Sales however increase at the same pace as red and so do not eat into the market share of red wines. 82% of red wine consumed in China is CHINESE wine. (Much of which is blended with bulk wine imported from other countries such as France, Australia, Spain, Chile, Italy and US). Any wine blended with a small proportion of domestic product can then be labeled as Chinese.

4)   Opportunities: There was a slight decrease in consumption in 2013 due to austerity measures imposed by the Chinese government that cut the amount of wine-gifting by government officials. This has lead to a decrease in imports over the first quarter of 2014 as importers look to clear their stocks of wine. Importers claim that although the market has changed, it still presents interesting opportunities for growth as younger consumers turn from beer to wine and consumption in so called ‘second tier’ cities grows.

5)   Technology: Consumers in China are increasingly turning to technology: advertising via mobile phone messaging is very efficient and cost effective, online wine shops are very popular and as recently as 5 years ago, 90% of sales were done in cash whereas nowadays, consumers tend to pay with credit card or wechat.

6)   Thirst for knowledge: In the past, the people who bought wine, weren’t the ones who drank it (they were used as gifts), nowadays, the wine buyers is the wine drinker and is someone who wants to understand more and more about how and where it was produced. However, Wine dinners to be less effective than only a few years ago and producers are now opting for very small private dinners with consumers. In China, the personal aspect is very important and if a person is liked, the products will in turn become popular. During these dinners, guests often use social media to share their experiences thus becoming ambassadors for that brand.

7)   Fake wine: White wines are perceived as being less subject to falsification scams which often hit the headlines and are a worry for prospective buyers. Christies auction house however maintains that false wines are an urban myth and says that out of the tens of thousands of bottles of wines auctioned each year, only a dozen or so present some element of concern. Most of the “fake” wines can be easily spotted and originate from Europe or other Asian countries but not China particularly as China does not have the supply of corks and capsules to be able to make a convincing fake.

Domestic Production:

8)   Economic problems: The numbers of “boutique wineries” in China has grown exponentially over the past decade due to the government’s pro-wine policies. In one region, the government offered tax rebates, preferential bank loans and made it easy to be allocated land. As many took advantage, the government is now bankrupt and the wineries are not able to survive on the market. Wineries that were assisted economically by the government (who was also their main client for wine sales). This is also compounded by the effect of the government’s policy to position Chinese wine in high price brackets before having the quality to match the price tag. The result was that many consumers turned to imported wines and lost their loyalty towards domestic products.

9)   Land laws in China prevent private ownership of land and permission to use the land is only granted for up to 30 years, after this, winery owners are unsure as to what will happen but are ready to take a bet.

10)         Education of enologists in China has increased significantly over the past years and the University of Beijing has a very good programme with many visiting lecturers. However on a like to like basis, at a price range of 50 euro, a bottle of wine from China is unlikely to be of the same standard as wine produced in other countries.

11)         Consumer perceptions of Chinese wines are changing and Simon Tam of Christies auctions hopes to host the first auction dedicated to Chinese wines in the next 5 – 8 years.

12)         The global economic crisis has made the Chinese wine market particularly problematic with the Chinese government imposing austerity measures reducing the amount of hospitality and gift giving by Chinese officials. The result is an enormous amount of containers of wine (predictions range from 10 – 40,000 containers or 50m cases) abandoned at Chinese customs as importers go out of business. No one is quite sure what then happens to this wine, obviously problems of storage affecting quality may come into play but there are also many local distributors that are purchasing some of this wine and then selling it at low prices. This can be an opportunity eliminating the bad importers and leaving the ‘professionals’ to survive.

Complicated? Of course but with this amount of thirsty consumers, there has to be room for everyone…