The Wine Market is Shifting - With or Without You

Most everyone in the industry would agree that the wine market is changing. The impact of millennials' purchasing power, the demand for and accessibility of previously unknown regions, and an outdated prohibition era distribution model are just a few factors that are driving this shift in the industry. But in an industry that is steeped with tradition and regulation, there are many who resist or are unsure how to tackle the new world of wine.

A recent study conducted on behalf of ProWein, published in Meininger’s Wine Business International magazine, shares some insightful data about the current and future state of the international wine market. Much is similar to and validates the trends we heard at Vinexpo New York, so here are a few compelling highlights.



New markets

The survey states nine out of 10 leading international wine producers plan to extend their exports to new markets by 2020. And these producers most often say they want to export to the USA, among other countries. The US is trending to become a major globalization factor in the international wine industry, and we must keep pace. Accepting and promoting wines of previously unknown regions are going to increasingly be a part of the job to fulfill consumer’s expectations.

In demand wine origins

According to the survey, two-thirds of international marketers attending ProWein wish to include wines from new countries of origin in their portfolio. This complementary point to the previous one above further demonstrates the shift in the market for diversity in selection. While marketers look to include new regions in their offerings, consumers are also expecting marketers to share the stories and histories of these new regions. A new approach to marketing wine is needed to not rely on an AOC or varietal to sell the bottle. Wine must now tell a story and place consumers in the moment and experience of the wine.

Purchasing and sourcing channels

There is a clear trend towards shortening wine procurement channels. Marketers are striving to source their wine direct from a small wine-growing estate or, to a lesser extent, directly from a large winery. As we saw at Vinexpo, DTC (direct-to-consumer) and DTT (direct-to-trade) models are emerging as a preferred method of acquisition to not only shorten procurement from a timing standpoint, but also provide increased value to the consumer while improving margins.

Their Conclusion

The wine sector is facing changes that are also reflected in the different future outlooks of the various market participants. Producers are increasingly looking to new distant wine markets (such as Moravia!) and marketers are facing structural changes in the sale of wine where primarily sales via traditional wine merchants will decline.

While it is an exciting time to be involved in the international wine market, it can be unnerving or overwhelming for some who have long built businesses and relationships on established markets and models. But every industry evolves, and if you don’t adapt and innovate with it, you risk being left behind, in decline, or worse - out of business.