Premium And New Formats Offer Big Opportunities For Bulk Wine Market

Posted: Nov 29, 2018



With the global 2018 harvests bringing the world's wine supply back into greater balance, the market is evolving to allow greater fluidity in supply, to the benefit of premium bulk players and smaller volume buyers, with differing formats cited as key to future consumer engagement and sales.

These were some of the key takeaways from the 10th edition of the World Bulk Wine Exhibition in Amsterdam this week, where keen pricing was back on the table after the shortfalls in supply of 2017 at a show that had a record 6,500 visitors and 250 exhibitors.

Speaking at a seminar on differing packaging formats, Catherine Mendoza, who oversees the Scandinavian market for broker Ciatti, outlined the necessity for a radical change in the approach to how wine is packaged and delivered if the industry is to thrive going ahead.

"This exhibition started as a place for big volumes, but now is not just about big producers and big buyers, but everyone, whether a buyer for a restaurant group or a specialist buyer," said Mendoza, suggesting that the bulk wine market has evolved to cater for niche and premium purchases.

In turn, she said, this is now allowing greater flexiblity down the bulk supply chain which, coupled with the overall rise in quality of bulk wine and an ever greater focus on regional-specific wines of origin, plays into the hands of buyers looking to create original and more niche propositions and formats.

"Different formats are essential to increase engagement, sales and help drive the mid-market and more premium sales," said Mendoza.

She cited younger consumers, both in the UK and US, looking for more premium wines but in more flexible, smaller sizes, along with the growth in China among women of a trend to drink one glass of wine a day, for apparent health benefits.

The importance of delivering wine in formats that keep it fresh, youthful and bright tasting for a younger generation that is seeking freshness and lighter styles, along with greater acceptance of innovation by the wider wine trade was also highlighted.

Bag-in-box, Tetra Pak, cans and keg were also cited as key growth areas in the US market by Cyril Penn, guest speaker and editor in chief of Wine Business, at a seminar on Trends in the US Market.

Reminding the audience of bulk suppliers and buyers that younger people "have less money and greater debt", Penn said that as Baby Boomers "age out" of the market, innovation had become increasingly important in an age where the impulse purchase rules.

"Where are the opportunities? Bag-in-box is a huge one, with all that is going on with younger consumers wanting convenience, and who wouldn't think about a traditional 75cl bottle," said Penn.

"If want to get into the US market at the moment, I would think about Bag-in-box, Tetra, cans - cans are huge, growing at 38% last year. There is room for more players, with innovation.

Penn also reported that keg wine is "taking off rapidly", in double digit growth, allowing restaurants to get a great range of finer wines into the glass without the associated spoilage of opening and keeping an expensive bottle.

It is against this background that Constellation is coming out with US $30 BIB on the US market, looking to replicate some of the success that Mendoza had earlier described in the Scandinavian monopoly markets.

There a mix of government push on environmental issues and greater consumer demand for sustainable packaging has seen bag-in-box take over half the wine market, including more premium styles. And sustainability will doubtless become an ever-bigger driver in the future as consumers and industry alike look to cut carbon footprints and wastage.

Looking to new business opportunities for bulk wine and, indeed, the global trade as a whole, Jean Luc Faveral, research and development director at big player Pera-Pellenc, best summed up the message.

"You have to adapt the wines to the demands of the consumer, today and tomorrow,' said Faveral, alluding to both the liquid in the 'bottle' and the shape that packaging should take.

Any harbouring suspicions that the bulk wine sector is behind the curve should think again. On the evidence of this show, it's a trade that is increasingly ambitious in terms of driving innovation, premium quality and new consumer engagement.

By Andrew Catchpole
November 28, 2018
Source: Www.harpers.co.uk



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