Wine Economics Archives

Southern French Wine Regions Announce €34M Recovery Plan

At a press conference May 29, members of the southern French wine industry agreed on a comprehensive plan which will aid the sector following the coronavirus disruption.

The “unprecedented” scheme aims to safeguard jobs, boost sales and help the region and its wine producers regain market share over the next 18 months.

Furthermore, it intends to help companies develop multi-year trading partnerships, increase the rate of premiumization in the wines, and safeguard the production of the region’s distinctive dessert wines (vins doux naturels).

The scheme has the backing of the regional council, regional business and marketing boards, wine industry trade unions, the regional Chamber of Agriculture and wine trade bodies including Inter Oc (Interprofessional Council of wines from the Pays d’Oc), IVSO (Interprofessional Council of Wines from the South West of France), CIVL (Interprofessional Council of Languedoc Wines), CIVR (Interprofessional Council of Roussillon Wines) and the Gardoise, part of Inter Rhône.

A total of €14 (€7m each) will be coming from the Regional Council of Occitanie and business and marketing boards.

Support will be given to companies to assist them with their marketing expenses, including participating in trade fairs, while €0.5m will also be allocated towards a campaign promoting the region’s wines. 80% of the budget (the €14m) will take the form of direct aid for businesses.

A further €20m will come from wine trade bodies. Inter Oc is contributing €14m, while the CIVL, CIVR and IVSO are each giving €2m to the cause.

The recovery plan will be presented to the vote of regional elected representatives in July.

Languedoc winemaker, Gérard Bertrand, said: “The region and all the players in the Occitanie wine sector have come together and mobilized to collectively build a stimulus plan of unprecedented scale in France with regards to the resources that have been contributed.

“With direct aid for wine companies, in particular for marketing, collective actions and promotion, we are ready to act on all fronts: to secure jobs, promote local development of activities and stimulate the reconquest of markets in France and internationally.”

In addition to national government schemes, the region has been supported by a number of measures during the Covid-19 crisis. Wine firms have been able to take advantage of the Fonds de Solidarité Régional (Regional Solidary Funds) which gives aid to businesses who have not had access to a state-guaranteed loan (PGE). Companies have also been given extensions, postponements or exemptions from loan repayments. In addition, the Solidarité Alimentation Occitanie, launched in March, has helped promote local deliveries in order to for the economic activity in the region to be maintained.

Occitanie is the administrative region formed in 2016 from the merger of the Languedoc-Roussillon and Midi-Pyrénées regions

It comprises over 270,000ha, producing 14m hectolitres of wine, and boasts 93 appellations including 59 PDOs. It is viticulturally diverse, with some 150 native and international grape varieties grown. Around 22,600 wine-related companies operate in the region – employing 100,000 people – with a turnover of €1.3 billion. Wine grapes represent 20% of agricultural production in the region (in 2017) and wine worth €925m was exported in 2018.

Sources: Drinks Business and the Regional Council of Occitanie

Millennials are vital to Champagne’s future

“Millennials are vital to Champagne’s future… because they are willing to look beyond the ‘just for celebrations’ mantra,” states Françoise Peretti, Director of the UK’s Champagne Information Bureau.

Millennials are deemed to be more digitally connected and open-minded than baby boomers.

Peretti further stressed the need to attract a younger generation of drinkers, and the potential demand among “open-minded” millennials.

“Unlike the Baby Boomers, they are open-minded consumers, willing to look beyond the ‘just for celebrations’ mantra,” she said of the age group, which covers those people from their early 20s to late 30s.

“This is their most important attribute: a desire to embrace the idea that Champagne can be a drink for the weekend, not simply New Year.”

Mentzendorff’s Andrew Hawes, who is the current chairman of the Champagne Agents Association believes that grower Champagnes are the key to unlocking the millennial market.

Hawes states “A quiet revolution has been building in the independent sector over the past few years.” He further adds, “Independents are selling more and more grower Champagne to millennials – they are naturally drawn to the ‘craft’ credentials of smaller brands.”

In the US, Chicago-based sommelier Zach Jones recorded a similar development, and he goes on to say, “Grower Champagne has had a huge surge in popularity with younger drinkers in the US, because there is a great story to tell and it gives younger consumers the sense that they are supporting a small family winery, not a massive machine.”

Sources:
Drinks Ontario
Champagne Information Bureau – UK

Wines of Argentina appoints Maximiliano Hernández Toso as new president

The Wines of Argentina has recently appointed Maximiliano Hernández Toso as its new president for the next two-year period.

Toso will serve a two-year term as president, supported by Guillermo Barzi, who will continue as acting vice president of the institution.

Tosco was appointed during an Ordinary General Assembly of Wines of Argentina yesterday, held over videoconference.

Hernández Toso is the co-founder and director of WHT Partners, an Argentine venture group that invests in high-end wine and owns Riglos and Huarpe wineries. He has been on Wines of Argentina’s board of directors since 2015, and previously occupying the role of treasurer.

He has an MBA from IDEA and the London Business School and a Master’s in public policy from Carnegie Mellon University, where he studied as a Fulbright fellow. Toso has also taught and directed the wine management programme at ADEN Business School and has also spent time working as a private and independent consultant to entrepreneurs, investors and multi-lateral organizations.

Commenting on his new role, Hernández Toso said: “It is a privilege for me to lead this institution, which I respect and admire for the great work it has done since its inception. We have many challenges ahead, but also great opportunities to innovate and continue bringing Vino Argentino closer to the world and raising the perception of Argentina as a modern winemaking country thanks to the enormous wealth and diversity of our terroirs.”

Vice president Guillermo Barzi, added: “Over the years, Argentina has shown that it is capable of surprising and competing internationally with great wines of the world. The goal is challenging, but we will keep the focus on collaboration agreements and education as a way to reach new audiences.”

Wines of Argentina website: https://www.winesofargentina.org/en

US Drinkers Have Increased Wine Consumption During Lockdown

America’s 77 million regular wine drinkers upped their frequency of wine consumption during the pandemic lockdown, despite the closure of many on-premise establishments, according to new consumer research out this week.

The new Wine Intelligence US COVID-19 Impact Report polled a nationally representative sample of 2,000 monthly US wine drinkers during March and April 2020 to understand how their wine drinking behavior was changing as a result of the restrictions due to the coronavirus. The findings paint a picture of a nation finding new occasions for wine drinking – at lunchtime, or catching up with friends online, or replacing the trip to the restaurant with a more indulgent evening meal.

The growing volume of wine purchased was tempered by a small decline in the average price per bottle paid overall, according to the research. However, within this average were significant variations by consumer type. More involved and committed wine drinkers, who mainly spend between $15 and $20 per bottle normally, tended to spend a bit more than usual, while less frequent wine drinkers tended to spend a bit less.

There was significant growth in online shopping across all age groups, with the most likely users of online channels being younger, urban, affluent consumers. This same demographic, who in normal times are more likely to drink wine in social settings such as bars and restaurants, also tended to spend more on take-home purchases.

While the majority of respondents said the origin of wine they bought during this period stayed the same, there was a notable shift in purchase preferences towards domestic wines and away from imports. Some 18% of respondents reported buying more wine from California and other US regions during this time, while 20% said they were buying less wine from France, Italy and Spain. Additionally, US wine drinkers increased their trust in California wines and conversely, lost trust most among old world wines, particularly those from Italy.

Looking to the future, US wine drinkers, on the whole, expressed caution about going out to bars and restaurants immediately after lockdown restrictions were ended – around 40% said they would be less likely to visit a restaurant, while 27% said they would be more likely.

Analysis of this data suggests there is a distinct attitudinal contrast at work among consumers. At one extreme is an optimistic and active group who have made minimal changes to their lifestyle and are less nervous about returning to the on-premise – they tend to be younger, more affluent and city-based, and comprise about 17% of monthly wine drinkers. At the other extreme, 20% of monthly wine drinkers have reacted strongly to the lockdown, and have significantly cut down on spending and wine consumption, and are very reluctant to return to an active social life.

The Wine Intelligence US COVID-19 Impact Report will be published on the 6th of May 2020. It includes latest insights pre, during and predicted post-COVID-19 restrictions, including beverage repertoire, wine buying and consumption behaviors, brand health and lifestyle behavior changes.

Commenting on the report, Wine Intelligence CEO Lulie Halstead said: “Our data supports other evidence that shows that US wine drinking is holding up and that sales will continue to be solid once lockdown ends. In fact, there are clear opportunities with certain consumer segments right now and also in the medium term as we move to post-lockdown behavior. Looking ahead, the US wine drinker is understandably quite cautious about their household finances and the idea of getting on a plane. Thankfully for the wine category, their intention seems to be replacing big treats like vacations and big events with small treats like a nicer bottle of wine.”

Source: Wine Intelligence

Vinexpo New York is hosting a free webinar “The Evolving Landscape of the (US) Wine & Spirits Industry”

Despite the challenges the past few weeks have presented, many wineries have successfully shifted their strategies and modified their businesses. They’re not only supporting their staff and customers, but also those on the front lines while keeping business moving.

Attend this free webinar, where you will hear from industry members across the three-tier system and learn what changes they have made, how they continue to adapt and what they expect in the coming weeks.

“The Evolving Landscape of the Wine & Spirits Industry” webinar will take place on Tuesday 5 May at 11:00 am EST.

Among several speakers will be Michael Baum, CEO & Propriétaire, Château de Pommard, Scott Zoccolillo, sommelier and wine director at Del Frisco’s Double Eagle Steakhouse in Philadelphia, and Margie A.S. Lehrman, who is chief executive officer of the American Craft Spirits Association.