Heres what happend in the wine world in 2015

Here's what happend in the wine world in 2015

As 2015 draws to a close, just-drinks looks back at the stories that have made the headlines across the global drinks industry. Here, deputy editor Lucy Britner picks out the highs and lows for the wine category.

Sparkling success

Champagne showed resilience against the rest of France's wine exports for 2014, rising 5.2% in value and 7.8% in value. The country's wine volumes overall, however, slipped 3.3%. But, Euromonitor analysts highlighted a frugality-induced 'new normal', which meant there was work to be done for the French fizz in 2015. This 'new normal' proved great news for Prosecco, especially in the UK, where sales leapt due to consumers perceiving the drink as "good value". Champagne Lanson's MD, though, called Prosecco a gateway tipple for would-be Champagne drinkers.

By May, Prosecco's popularity led to reports of a shortage but, after speaking to several producers, we discovered the stories to be unfounded. Then, the governing body for Prosecco waded in, calling reports of an impending shortage because of a bad harvest "misleading". Despite all the fizz around Prosecco, our columnist Chris Losh said Champagne was on "solid foundations" and he disagreed with the notion that Prosecco drinkers trade up to Champagne, instead saying the two drinks satisfy different occasions.

Towards the end of the year, just-drinks and IWSR research revealed that innovation is alive and kickstarting a new wave of interest in fizz. The report predicted that sparkling wine consumption globally will rise by some 17.5m nine-litre cases over the next five years, having seen a decline of 0.9% in 2014 to 212m cases.

But, it might not happen over night for Champagne.

Treasury's turnaround

At the end of March, Treasury Wine Estates announced plans to sell some of its Australian and US wineries and confirmed further job losses as it continued a major cost-cutting programme. By July, Treasury had offloaded Asti Winery in Sonoma, along with its Souverain wine brand, to E&J Gallo. It later emerged that the company made a pre-tax loss of US$7.5m on the disposal.

But, come August, the company had reported a strong return to profit in its fiscal full-year, with sales in the period also moving from red to black. Following the results, CEO Michael Clarke said that in the next 18 months, Asia would become the biggest profit contributor to the company. He even revealed a few of Treasury's tactics in tackling Asia.

By the beginning of October, rumours abounded that Treasury was in the chair to purchase Diageo's wine assets. At the time, just-drinks columnist Losh took a closer look at Treasury's performance and the "marital breakdown" between wine and Diageo. Sure enough, within a few weeks, Diageo had lined up the sale of the bulk of its wine operations - including the Blossom Hill and le Piat d'Or brands - to TWE. The deal also included US-based Chateau & Estate Wines division and the UK's Percy Fox operations - all for US$552m. Meanwhile, the company's cost-saving scheme continued and at the end of October, Treasury closed a New Zealand winery and halted operations at another site.

As we move into 2016, Treasury looks to be on track to continue its successes. As for Diageo, which also sold off France's Bouvet Ladubay last month, next year may also see Diageo quit wine entirely, as the company recently confirmed its intention to pull out of the wine category at its earliest convenience.

Gallo's acquisition trail

California-based behemoth E&J Gallo made a swathe of purchases in 2015, firmly cementing its position as one of the world's largest vineyard owners. In March, it bought Sonoma County's J Vineyards & Winery for an undisclosed fee.
Then, in May, came Cypress Ranch and part of Palisades Vineyard in Napa Valley, followed by Treasury's Asti Winery in Sonoma, along with its Souverain wine brand, in July. Next was Talbott Vineyards in California's Santa Lucia Highlands in August and the year closed out with The Ranch Winery in St Helena - again in California - in December.

Gallo wasn't the only wine company flexing its M&A muscles in 2015. Accolade started the year by completing its takeover of Barossa Valley-based producer Grant Burge Wines. And, in June, the general manager of Accolade, Paul Schaafsma, told us that the company is looking for acquisitions in Argentina and Chile in its quest to position itself as a "one-stop shop" for New World wine offerings in the UK. Cue September's purchase of Chile's Viña Anakena. And, while we're on the subject of Accolade, September saw Schaafsma move up from his GM role to become CEO.

Constellation Brands, meanwhile, also made a large play in the summer when it paid US$315m for Californian wine brand Meiomi. The acquisition marked the continued refocusing of Constellation's wine portfolio, an approach that was welcomed by analysts.

Youth appeal

It turns out spirits producers are not the only ones obsessed with younger drinkers. A raft of studies throughout 2015 have found fresh-faced imbibers to be driving excitement in the wine world. In Canada, younger, affluent consumers were found to be more involved in drinking wine and willing to spend more on the average bottle. Over in Poland, it was pretty much the same story. The US market, meanwhile, is set to gain 16m more wine drinkers over the next ten years. And so far, it's the Millennials that are driving rose sales in the country. The producers of Provence will no doubt attest to that - the region's exports to the US soared this year.

In fact, research showed that the US remains the strongest bet for sales growth in the wine category because of its healthy economy and increasing spend and consumption habits. South Africa is definitely after a piece of the action, too.

Even Africa, best known for its propensity to drink beer, showed a thirst for wine. Research in March suggested that the continent's emerging middle class will fuel wine consumption over the next three years,

Little trouble in big China

China in 2015 proved to be both a problem and an opportunity for the world's wine trade. Figures released in March revealed that Bordeaux wine exports fell 17% by value last year due primarily to falling demand in China. Then, in April, China overtook France as the country with the second largest area under vine. Despite the increased vineyard area, wine production in China decreased by 5% to 11.1m hectolitres. More worryingly, estimated consumption in the country also fell, by 7% to 15.8m hectolitres. 

While the Bordelais might be struggling, a study suggested there might be hope for producers of entry-level and mid-priced wines in the region. This was borne out by comments to just-drinks from a Romanian producer who likened the economic slowdown in China to the one experienced in Europe - a situation that also spelled opportunity for Romanian wine.

There was some good news for Bordeaux towards the end of the year, though, as the region recorded annual growth in exports -  largely due to recovery in the Chinese market. Other wine-producing nations are making inroads in China, too - in November, Oyster Bay owner Delegat opened offices in Shanghai. Will China dominate the headlines again in 2016? 

Trading places

2015 has seen some major trade deals open up new opportunities for wine producers. The big one, the Trans Pacific Partnership, dropped in November, and was praised by wine organisations including California's Wine Institute. The trade body highlighted how the deal will eliminate tariffs, remove non-tariff barriers and set enforceable rules for trade acros 12 Asia-Pacific countries.

In June, Treasury Wine Estates and Pernod Ricard welcomed the signing of a new China-Australia free trade agreement, which will end the excise duty on Australian wine imports to the Asian country. The following month, Wine Australia laid out plans to invest AUD175m (US$134.5m) in its wine industry over the next five years - with one of its objectives being to increase its competitiveness in the global market.  

In November, preparatory talks between New Zealand and the European Union over a new free trade agreement were seen as good news for New Zealand's wine industry. 

The elements

Occasionally the elements aren't very kind to the wine trade and 2015 saw just about everything, including earthquakes, droughts and forest fires. Back in May, wine columnist Chris Losh was asking whether the drought in California might actually present opportunities. But, by August, dry weather had led to forest fires in the state. Initial reports indicated that there wasn't much damage to wine grapes. Then, further fires in September hit a winery and disrupted the harvest.

In the same month, an earthquake measuring 8.4 degrees on the Richter scale hit Chile, but the experience of 2010's massive quake had left the country better prepared. 

As for next year? 2016 will no doubt see more consolidation, more emerging middle classes moving into wine - and most definitely more weather.

For just-drinks' full review of 2015, click here