Posts Tagged ‘economy’

Drinking for pleasure...

Drinking for pleasure…

 
As the Chinese economy slows, new figures confirm that Chinese consumers are seeking out less expensive wine brands.

 
Analysts Wine Intelligence found that in the first quarter of this year, 60% of consumers between the ages of 18 and 50 spent less than CNY200 (€25) on imported wine.

€25 is generally recognised as entry-level wine in China. An earlier survey in January this year had found that fear of buying a fake wine was the biggest barrier to entry for imported wines, with 44% of respondents saying it put them off buying.

‘There is a growing trend for drinking wine for pleasure rather than serving it at banquets or giving it as gifts,’ Maria Troein, China manager for Wine Intelligence told China Daily.
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Our most popular post from last year is brought current with the 2012 financial information. The question at hand is: “How much do wineries really make?
 
The answer of course is ……(drum roll please ….) Not enough. Finding the facts is almost as hard as chasing unicorns in this business because the wine business is private. Its a family owned industry with even the largest; Gallo a family owned company. But its really quite amazing from the perspective of what is shared between neighbors in the wine business. There isn’t the sense that your neighbor is a rival or competitor. Its more of a club feel in many ways. If you need something, its quite normal to check in with your neighbor. Need a tractor because yours went kerput? No problemo. Need a little welding and custom fabrication on a pump? I’ll be right over with a welding rig.
 
There is a competitive side that abounds in the business too of course. When it comes to sharing financial information and customer lists, good luck! Ask a winemaker neighbor how its going financially, and you’ll get a mixture of liars dice, false bravado, partial truths and ….. well ….. 

 

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Undersupply replaced a decade-long era of oversupply with autumn 2012’s harvest and the inevitable prices hikes will hurt the entry-level market. Meanwhile global demand continues to rise.

TWEETS OF the “OMG! We’re going to run out of wine!” variety greeted reports in the autumn of 2012 that grape harvests in the Northern Hemisphere had widely fulfilled predictions of shortfalls across a sweep of major wine-producing regions. This compounded earlier Southern Hemisphere shortfalls at a time when global consumption is growing. Without question, the headline figures made for sobering reading, especially after a decade or more of oversupply being the norm.

As 2012 European harvest volumes were confirmed, the International Organisation of Vine and Wine (OIV) estimated that total global output had fallen from 264.2 million hectolitres in 2011 to 248.4m hl in 2012, representing the lowest level since 1975, when the body began tracking these figures.

 

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Back to an iconic era ...

Back to an iconic era …

 

In an era of doom and gloom, the drinks industry is looking to yesteryear to provide comfort and inspiration, writes Spiros Malandrakis of Euromonitor

NOSTALGIA RESEMBLES a floating, safe-haven currency. The darker the front covers in today’s press, the stronger the allure of concepts, designs and branding alluding to the rose-tinted memories of yesteryear. The alcoholic drinks industry’s inherently cyclical nature, its tradition-steeped narrative and unique aptitude in reflecting shifting societal undercurrents could not but bring such references to the fore.

The signs have undoubtedly been there for a while, true offspring of the Great Recession, if not necessarily relevant to specific brands per se. The “Mad Men effect” proved to fittingly capture the zeitgeist while catapulting sales of bourbon and old-fashioned cocktails across the West. Localisation and the “micro” movements can also be viewed as a nod to much sought-after values of innocence, craftsmanship and heritage – a fact vividly highlighted in many brands’ decidedly old-school logos.
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Australian Vintage is proving its determination to overcome challenges posed by a strong domestic currency with the announcement of a flurry of new product launches for the UK this year.

 

Julian Dyer, general manager for the UK & Europe at Australian Vintage, highlighted McGuigan’s position as “one of the fastest growing Australian brands” in the UK at the moment.

Despite acknowledging that, with the strong Australian dollar, “you have to be really lean to stay competitive” – the European office now bottles “over half” of all its wines in the UK – Dyer insisted: “The UK is a great market and we shouldn’t talk it down.”

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Of beer and wine
Let’s totally stereotype here and talk about beer in front of the TV while the Flames lose, or beer and a hot dog at the ballpark as the Jays lose.

For some, beer is as Canadian as the Maple Leaf, and anything less would be downright unpatriotic. But, new statistics show, a nation of beer drinkers are increasingly switching from hops to grapes.

“Despite the small increase in beer sales, both in terms of volume and dollar value, the market share dominance of beer continued to decline as consumers turned more to wine,” Statistics Canada said today, referring to numbers that are now a year out of date, but still show how tastes continue to change.

“In 2002, beer had a market share of 50 per cent by dollar value, while wine had 24 per cent,” the agency said in an annual report on alcoholic beverages.

“By 2012, the market share for beer had declined to 44 per cent, while wine accounted for 31 per cent.”

As the business goes, net income among the provincial and territorial liquor authorities rose 3.6 per cent to $6.1-billion.

The report, for the fiscal year that ended March 31, 2012, showed beer and liquor sales climbing 3 per cent from a year earlier, to almost $21-billion.

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Fine wine coming soon!

 

 

The Mediterranean may one day no longer be suitable for wine production

Vino connoisseurs, take note: Your next fine wine might come from Yellowstone or Canada. Climate change is quickly making it harder for some of the most famous wine-making regions in the Mediterranean to produce grapes, according to a new study published Monday.
Nearly three quarters of the world’s wine-producing regions might become unsuitable for grape production by 2050, according to the study, published in Proceedings of the National Academy of Sciences.

“Climate change has the potential to drive changes in viticulture that will impact Mediterranean ecosystems and to threaten native habitats in areas of expanding suitability,” the study suggests.

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rip

 

 

The wine business continues to do things no one expects, and the latest Champagne sales numbers are a striking indication of what’s going’s on.

This French wine service story is stunning in its conclusions: “Champagne was dominant 10 to 15 years ago, but the world has changed.”

The story, though written for the European market, is well worth reading because it documents the trend we’re been talking about here for several years (and not just because I’m trying to put together The Cheap Wine Book). Today, when consumers have a choice between two quality products, they’re more likely than ever to buy on price. Champagne exports declined 2.8 percent last year,… read on

 

Also read:

Wine on the Rise!

Wine on the Rise!

 

The Wine Market Council finds that wine drinking has expanded to more venues.
Amid a still-challenging economic environment, wine sales continued to grow in 2012, according to the Wine Market Council—an independent, nonprofit trade association—and The Nielsen Company, which presented their annual findings on U.S. consumer trends in wine. Key discoveries included:

Not just for fancy restaurants. Wine drinkers are finding more occasions suitable for consuming wine, including less traditional venues like ball games or concerts. That said, restaurant patronage has increased since the downturn in the 2008–2009 recession, and wine consumption at expensive restaurants has rebounded along with that. An increase in wine consumption at casual chain restaurants, including quick service restaurants, also was observed.

“The story isn’t just more wine drinkers,” said John Gillespie, President of the Wine Market Council, “but that they are drinking wine much more frequently, and that’s what’s driving growth.” Particularly among Millennials and Generation Xers, “wine is finding its way into places and times we thought were previously unavailable.”

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Wine on the Rise

Per bottle or per glass?

Per bottle or per glass?

 

Politicians may keep telling us the economic downturn is over and western economies are on the road to recovery, some market data actually tell us otherwise. A case in point is the latest market research by GuestMetrics in the United States. Based on its proprietary database of POS transactions of over $8 billion dollars in transactions and over 250 million bills from restaurants and bars across the United States over the past two years, it shows that on-trade consumers in the US traded down from bottles to glasses in 2012.

In fact, the shift was significant with the number of bottles ordered in restaurants and bars declining by 13 percent, while the number of wine glasses increased by 4 percent. “Given the large difference between the price, with the average bottle costing over $43 and the average glass costing $9.60, we believe this shift was driven by a consumer base that is still feeling pressure from a sluggish economic recovery, not to mention the unusually high level of uncertainty towards the end of the year with the spectre of the fiscal cliff,” commented Bill Pecoriello, CEO of GuestMetrics LLC.

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