The wine industry, which has remained immune from many of the pressures of the modern era for a long time, is now undergoing radical change, according to beverage industry analyst Canadean.
In its Global Wine Report, Canadean says changes to the industry are leading producers to seek increased margins from smaller volumes of high quality wines. At the same time the product is becoming increasingly commodified due to the growing importance of supermarkets as primary retail outlets.
These developments, Canadean says, are inextricably linked with the rise of branded wines from the New World and the decline of regional wines from the Old World. While New World markets are expanding at around 20% a year and Old World sales are static, the market share of branded wines is growing steadily.
In 2001 the top 30 brands in the UK took 20% of sales while in the US the top 30 accounted for 57% of the market.
Looking to the future Canadean believes that the key for growth will remain branding. This does not mean that the new arrivals can expect to have things all their own way since there are now signs that the Old World is fighting back.
Hitherto the unstoppable rise of New World wines has been attributed, at least in part, to their easy to understand labelling aimed at novice English speaking buyers. French winemakers have recently recommended measures to the Ministry of Agriculture that could simplify the identification of their produce for such consumers while retaining the existing AOC and vin de pays system.
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By GlobalData
