Category: Wine Economics

The Consejo Regulador DOCa of Rioja unveils strategic five-year plan

The Consejo Regulador DOCa of Rioja has unveiled a five-year strategic plan aimed at boosting the region’s sustainability credentials, driving wine tourism and increasing exports.

The aim is to boost total sales from 230 million litres in 2020 to 312 million litres by 2025, with export to account for 44% at 137 million litres, in addition to increased turnover of the Rioja brand by 23%, said the regional body.

White Rioja is set to grow to a total of 12% of volume and rosado to 5% of volume, a projection which aligns with current trends in the UK – still the most important export market for Rioja, the DOCa added.

Referred to as “a blueprint” for Rioja to establish itself as a global leader in wine production, the new strategy was developed following a year-long review carried out in collaboration with all key regional stakeholders, and in consultation with experts from each of the region’s 12 key export markets.

Central to the DOCa’s plans will be a focus on establishing Rioja as a leader in sustainability to help safeguard the future of the region, with key metrics having been developed to measure progress in this area, including the reduction of pesticide use by 50% and carbon footprint by 10%.

Another key pillar of the new strategy will be a focus on increasing wine tourism, with a target of reaching 1.3 million visitors by 2025, compared to the 343,000 visitors counted in 2020. The DOCa said it expected the number of wineries able to offer visitor experiences to rise to 250, just over a third of the region’s total.

Moreover, it said that digitalization would also play a prominent role in driving sales from the region with a target to quadruple online sales.

“The new strategic plan exemplifies Rioja’s pioneering character and aims to increase the value of the region and raise awareness of our wines, particularly in key export markets,” said President Fernando Salamero.

#RiojaWine #Rioja #WineLovers #Wine #winetasting #Vineyard #tempranillo #instawine #redwine #vinotinto #winetime #winestagram #spain #spanishwine #winery #enoturismo #vinos #vinho #winenews #winetourism

Liv-ex 1000 shows that interest in wines from Burgundy, Champagne, the Rhône, Italy, and US has grown rapidly and unexpectedly

New categories of wine are entering the secondary wine market for the first time, with trading up by 70% from 2019.

Bordeaux, which once dominated the secondary market, now has a share of trade less than half of what it was a decade ago. But it hasn’t fallen out of favour – rather, its share has shrunk as the overall market has surged and interest in wines from Burgundy, Champagne, the Rhône, Italy and the US has grown rapidly.

“Last year was a positive year for the wine market, with all major Liv-ex indices showing gains,” said Liv-ex Director and Co-Founder, Justin Gibbs.

Liv-ex (the London International Vintners Exchange) is the London-based global marketplace for the wine trade, where fine wine merchants from around the world buy and sell wine. What happens on the exchange is a reliable indicator of the health of the secondary wine market.

And what it shows is that the secondary wine market is not just booming, it’s broadening.

Fast Market Growth

The number of distinct wine brands traded on Liv-ex last year was up 70%, from 996 in 2019 to 1,420. The total number of wines – including different vintages of the same wine brands – was 8,735, up 72% from the 2019’s 6,367.

The surge has continued into 2021, with March 2021 closing on the biggest month of trade in Liv-ex’s 21-year history – 1,250 distinct wine brands were traded, of which 130 were newcomers to the secondary market. More than £80 million ($109 million) of live bids and offers, are currently available on the market.

The Liv-ex 1000 index was established in 2014 to capture this broadening. As with all Liv-ex indices, it reflects the activity of e Liv-ex membership – a pool of over 500 of the world’s leading wine merchants, who between them represent the biggest and deepest pool of liquidity anywhere in the world.

Most importantly, as a trading and data resource, it is completely independent. And it shows stark changes in the fine wine market, as new wines enter the secondary market.

One Index Alone Is Up 87%

The most striking example of the changing dynamics of the market is the Burgundy 150. It has risen 87% over the last five years, the beneficiary of collectors putting their capital into a new category.

The Champagne 50 has risen 58% over the last five years, driven by the brand power and prestige of the grandes marques Champagnes, widely available stock, global distribution and accessible price points.

The Italy 100 has risen 45% over the past five years, as merchants and collectors discover the relative value to be found in the great wines of Piedmont and Tuscany.

The Rest of the World 60 – which includes the top wines of California, as well as Australian, Spanish and Portuguese wines – has risen 31% over five years. US wines, in particular, are attracting attention; in 2019, US wines represented just 2% of trade by value on the market. That shot up to 7% of total trade last year.

What’s Driving the Trading?

As elsewhere in the economy, technological innovations have swept through the wine industry, transforming the behaviour of both wine businesses and buyers. This past year has seen the launch of new wine tech start-ups, digital wine apps, soaring online sales and virtual tastings, ensuring that people are no longer anxious about buying or trading online.

“These innovations in technology have had a significant impact on buying patterns,” said Gibbs. “As more of the wine trade go digital – with many enabling their customers to access the market using our Automation services – we are seeing increasing diversity in what is traded as collectors are put in the driving seat.”

As a result, the wines brought through Liv-ex in 2020 not only came from the more traditional fine wine regions like Bordeaux and Burgundy, but also from China, Hungary, Switzerland, Austria, Germany, Chile, Argentina and more. Prices per bottle also ranged from £4 to £21,000. As the wine world becomes increasingly digital, this broadening trend is likely continue.

The Market Set to Expand Further

Since 2019, US collectors and merchants have been constrained by the US government’s tariffs on the wines of France, including Bordeaux and Burgundy.

“The tariffs have had a singular effect on the fine wine market over the last 18 months, not least for Italy and Champagne whose wines were excluded from the extra 25% levy,” said Gibbs.

But the recent lifting of the tariffs has had a marked effect on activity – leading to a strong kick in demand for wines of all regions.

There are also other reasons to believe the fine wine market will both grow and diversify further.

“The combination of low interest rates and massive fiscal spending suggests that asset inflation will not be confined to equity, commodity and property markets,” said Gibbs. “The fundamentals of fine wine will also be an attractive option to those with cash to spare.”

#livex1000 #livex #finewine #burgundy #champagne #bordeaux #Rhone #USwine #winenews #instawine #winelovers #winecollectors #wineinvestment #digitalmarketing #finewineregions

 

 

 

More Bordeaux Vineyards Converting to Organic

Increasing numbers of vineyards in Bordeaux are switching to organic methods of production, after lagging behind other French winemaking regions.

According to Patrick Vasseur, vice president of the Gironde Chamber of Agriculture, there are up to date figures available, but anecdotal evidence indicates that around 300 vineyards a year are converting to organic.

 

“It’s quite simple, everyone is switching over” winegrower Philippe Carrille told Vitisphere. His 23-hectare Château Poupille in Castillon Côte de Bordeaux has been certified since 2008.   This surge of new converts, “can only be cause for rejoicing”, added Gwénaëlle le Guillou, director of the New Aquitaine organic wine producers’ organisation (SVBNA). She pointed out that until recently, Bordeaux had trailed well behind other regions, with only 11% of vineyards committed to organic, compared to a national average of 14%.

 

“There are currently significant price differences between organic and conventional, but this will not last,” said Phillipe Cazaux, director of the co-operative group Bordeaux Families.  “Well-deserved added value will remain, though, due to the technical commitments and the risk incurred by the supply side. This year the group has 105 hectares certified organic and 551 hectares in the conversion phase. “Initially, small areas entered the process, but then gradually the larger areas followed suit”, said Cazaux, who plans to convert a fifth of acreage to organic within five years, with a longer-term goal of 1,000 hectares by 2027.

 

Éric Hénaux, director of the Tutiac co-operative group, is adopting a more cautious approach and waiting for the current 620 hectares to be converted by 2022 before making any further plans. “We will see how the market stabilizes,” he said. “A lot of organic wines came on-stream, and prices fell. We have to be careful not to produce more volumes than we have the capacity to sell. The objective is not to sell on the spot market, but to focus on bottles and three-year contracts”.

 

#Bordeaux #Bordeauxvineyards #organicwine #vineyards #frenchwine
#wine #redwine #whitewine #bordeauxwinelovers #winelovers #instawine

Institute of Masters of Wine Webinar: Climate Change & Global Wine Trade – February 17th, 2021

The Institute of Masters of Wine is continuing its webinar series next Wednesday February 17, 2021 with a session on “The Impact of Climate Change on the Global Wine Trade.”

This webinar will examine the impact of climate change from vine to glass with leading experts climatologist Dr Greg Jones, economist Mike Veseth and CEO of Wine Intelligence Lulie Halstead sharing their views in a discussion covering the impact on growing grapes and wine quality, trade and distribution and on wine consumers. 

Climate change is having an impact on wine production. Increasing temperatures affect vine phenology with reduced winter dormancy, and earlier physiological ripening. They also affect the spread of disease and pests. Climate change is leading to more frequent and more extreme, extreme weather events with increased drought conditions and wildfires in regions such as Australia, California, Spain and South Africa, spring frosts and more violent storms leading to flooding. This means greater variation in quantities of wines produced from one year to the next with increased volatility in wine prices. Climate change imperils the smooth flow of goods as transport infrastructure and ports are vulnerable. Wine consumers are increasingly concerned about climate change and are becoming more demanding in terms of wanting to know what goes into the products they buy and how they are made. This discussion will cover each of the aspects across the entire global wine supply chain.

The event will be moderated by Jane Masters MW and there will be an opportunity for attendees to ask questions.

The panel includes:

Dr Greg Jones – Chair, Evenstad Center for Wine Education / Wine Studies
Lulie Halstead – CEO Wine Intelligence
Jane Masters MW (moderator) – view MW profile
Mike Veseth – Wine Economist, Professor emeritus of International Political Economy at the University of Puget Sound (Tacoma, Washington)

This webinar is open to everyone, but capacity is limited. Follow this link to register.

Wine News: Bourgogne wines held up on the International Market in 2020

BIVB has announced their 2020 export report –  After a very good November in terms of volumes, exports of Bourgogne wines over the first 11 months of 2020 were slightly higher than over the same period in 2019 (up 0.5%), confirming a trend already witnessed in October. Revenue was also close to the record level seen in 2019, down just 2.6% by the end of November, having recovered from being down 9% just a month previously.

However, these figures should be set within a sluggish economy, impacted by both COVID and the 25% Boeing/Airbus tax, which severely penalized sales to the United States, down 14% by volume and 21% in terms of revenue, representing a loss of some €44 million. However, with volumes up 16% equating to 2.2 million bottles, the British market almost entirely offset the loss in volumes from the United States and once again became the leading export destination for Bourgogne wines.

Several territories saw big upticks in numbers, like Sweden, up 18.4% by volume and 14.2% in terms of revenue compared to the same period in 2019, and Denmark, up 24% by volume and 25.6% for revenue. Others enjoyed more moderate growth but for big volumes, like Canada (up 6.4% by volume and 6% in terms of revenue) and Belgium (1.2% and 5.5% respectively).

In France, Bourgogne wines grew their position in the retail sector, up 4.7% by volume and 5.7% in terms of revenue over the first 10 months of 2019, thanks in particular to their popularity in convenience stores and via click-and-collect. As yet, there is no data regarding the restaurant sector, which is in free-fall, or for wine stores that are enjoying a boom.

#winenews #wineeconomics #wineexports #frenchwine #Burgognewines #winesales #winemarketing #winelovers #wine #bivb #burgundy #winetrends