Wine distributors
An Interview with Vinexpo CEO Robert Beynat
To clarify these points we interviewed Vinexpo CEO Robert Beynat.
WBM: You say that by 2010, the U.S. will be in the second importing position. Behind the U.K. or Germany? And is that gain because Germany and the U.K. have also gained, but at a slower rate, or is the U.S. gain because of a decline in the U.K. and/or Germany importing positions?
Beynat: Sopexa, the U.S. arm of the French wine marketing agency, reported to WBM that they just made a mistake. The U.S. is in the 3rd position now and will remain there at least until 2010.
WBM: What about the consumption figures? Have Germany and the U.K also grown in consumption or have they dropped?
Beynat: Both Germany and the U.K. will continue to have consumption growth; Germany will grow an estimated 7.31 percent from 2005 - 2010 and the U.K. 8.29 percent for the same time span.
WBM: Your summary data predicts the biggest growth in the mid-market wine retailing between $5 and $10. Do you expect a rise in the over-$10 market after 2010 as wine drinkers in the mid- category move up in price?
Beynat: While all indicators point towards continued growth, we can only estimate up to 2010 at this point, and there is a predicted growth of 17.2 percent for wines retailing more than $10 from 2005 - 2010.
WBM: I am confused by this statement from the world study overview: "All retail wine sales continue to grow, with higher-priced wines growing the fastest."
Beynat: Retail sales of wines between $5 and $10 per bottle are predicted to grow by 9.12 percent between 2005 and 2010 while wines retailing for more than $10 a bottle will increase by 17.2 percent over the same period. The consumption pattern in terms of price range is different for the U.S. than the rest of the world. And the trends between 2005 and 2010 are different as well.
WBM: Do you think that spirits growth could impact wine consumption?
Beynat: Wine and spirits are not directly competing with each other because they're both growing worldwide. In the U.S., it is beer consumption that is suffering from the wine and spirit growth.
WBM: Does this data suggest, then, that the world's producers should place more emphasis on sales and marketing to the U.S.? Should there be higher allocations? Greater numbers exported?
Beynat: Consumption of imported wine is actually growing a bit faster in the U.S. than the rest of the world. But at the same time, exports of American wine are also growing. The overall wine and spirit market is becoming more and more global for all the world's players.
WBM: What plans does Vinexpo have to direct its efforts more towards the American market? Will you repeat another Vinexpo Americas?
Beyant: We would like to hold another Vinexpo in the U.S. in 2010. We are currently working on this, and nothing is set yet.
WBM: What has caused the consumption growth in the U.S.?
Beynat: Consumption growth in the U.S. is due to many factors. Among them, consumption growth per capita (with a greater potential growth versus the consuming and producing countries in Europe) will continue to increase. And with the consolidation of distributors in middle America, it is much easier for new wine ventures to occur. Finally, increased consumption in the Hispanic community is also adding to the growth.
The U.K. Spin focused report is also interesting for U.S. wine producers. British wine distributors and drinkers are steadily buying more expensive wines. Researchers say that sales of bottles priced at more than $5 accounted for nearly half of volume in 2005, a rise of 40 percent since 2001. The amount of wine consumed each year by the average Briton is also predicted to grow at 3.7 percent in the 10 years from 2001 to 2010--three and a half times faster than the growth in world consumption. Remember that U.K. supermarket sales usually hover around $9 (£5) and that the U.K. is predicted to buy more expensive wines. That could bode well for U.S. producers exporting to that market.
The Youth Market
The study to which Mr. Beynat referred about the trends of younger consumers found that winemakers, wine distributors and retailers must make a bigger effort to interest young adults to overcome wine's complex image as reported in the study's release in London in March. (The study was released first in London a month earlier than in the U.S.).
But compared with a similar study 10 years ago, wine is much more acceptable now to this age group thanks largely to branding, improved marketing and changes in attitudes to wine.
The research was carried out in five countries by Vinexpo and France's Brulé, Ville & Associés (BVA), and was based on focus groups in the U.K., Belgium, France, USA and Japan.
But how deep was the study? It was only a look at 100 occasional wine drinkers aged 20-25 (20 each in London, Paris, Brussels, New York and Tokyo). The subjects, all focus group participants, said they are curious about wine, but put off by too many choices and styles, complex labeling and wine's stuffy image.
That contrasts with decanter.com's recent study of over 500 18-25 year olds in the U.K. that showed that this age group is indeed interested in wine and eager to learn more.
The Vinexpo study results from all countries showed that the 20-25 year olds want to have a better understanding of wine which they perceiveas refined, cultivated and a part of growing up. Wine is associated with sophisticated enjoyment and even health benefits, they said.
The study uncovered prejudices from this group:
• Price: wine is perceived to be expensive.
• Elitism: the wine culture and vocabulary exclude young adults.
• Difficult choices: young consumers lack understanding of the many different wines and wine styles.
• Plethora of choices: there is a bewildering range of choices and confusing labels.
As far as packaging is concerned, there is a clear division between Europe--where the groups liked traditional bottles and labels--and the U.S. and Japan, where young adults want an entirely new kind of presentation with different bottle shapes and colors.
The study, interesting tool for the wine distributors, also showed that national cultures play an important part in the perceptions of wine. In France and Belgium, wine is a part of everyday life since childhood. In the U.K, by contrast, 20-25 year olds are just now becoming more familiar with wine, and drinking wine is viewed as less exclusive. In the U.S. wine drinking is associated with the culture of Europe and reserved for special occasions while in Japan drinking wine is considered exotic and reserved for very special occasions.
Compared with a similar Vinexpo study carried out in 1997, wine is now drunk more widely by the 20-25 year old age group and is seen as a quality product.
Vinexpo 2007 will be held from June 17-21 in Bordeaux, France and will host 2,400 exhibitors from 44 countries, attracting 50,000 visitors from 138 countries.
