As we are getting to the end of the quarter amidst this coronavirus craziness, I took some time to reflect on this learning journey and complexity of wine business as a whole.
Major takeaways:
1. New wine regions challenged long-established oligopoly of France and Italy filled in affordability gap and accelerated the adoption of wine culture in America: Argentinian Malbec, New Zealand Savignon Blanc, Californian Cabs overdelivered at $8-15 price segment, using vast supply of grapes and technological breakthroughs. New wine regions and greater diversity of styles within regions introduced variety of creative and easy to drink options to emerging wine drinkers at different price points.
2. With so many options available to us today, the market is becoming incredibly competitive; driven by execution efficiency, marketing, new business models and solid understanding of new drinkers needs and preferences. Baby Boomers are still keeping the ball rolling for top Bordeaux and the Burgundies but unless the growers in say Languedoc-Roussillon figure out how to balance continuity and traditions with innovations and putting customer first, they will probably not survive. Just think about it: the French share of the global wine market has dropped by 1/3 in the last 20 years while wine consumption dropped by half. To be fair, though, I shall mention that french family wine producers outside of main appellations are tackling the issue by introducing alternative wine syndicates i.e. Côtes de Thongue, planting International grape varieties like California cépage, and sending family business heirs to New World wineries to learn about processes and marketing.
3. Wine value chain is phenomenally complex. Before I started taking this class, major associations that came to my mind when I was thinking about wine were terroir, grape, distinctive aroma, crisp acidity, tannins and malolactic fermentation. Right now its more like ripe-for-disruption $70b inefficient domestic market, Wine Spectator, three tier system, cooperatives, packaging and distribution, marketing and direct to consumer operations; and of course joint ventures and partnerships when things relate to markets like China and Japan. A number of startups in the industry are attempting to change this 'tough to disrupt industry: from Tasting Room, Winc and Maker to Vivino, Wine Searcher and coravin. All of them change the way we think about and consume wine and represent interesting acquisition targets for well established players struggling to innovate.
Personally, I am planning to continue wine educational journey and spend couple weeks in Catalonia after all this craziness around Coronavirus dies out. Both as a wine lover and a person deeply interested in wine as a business, I am looking forward to learn about Catalan wines that favor garnacha and carginan grapes and deliver fuller body, higher alcohol content fruit-forward, bold and color intense wines that perfectly pair with local food in Barcelona.
Major takeaways:
1. New wine regions challenged long-established oligopoly of France and Italy filled in affordability gap and accelerated the adoption of wine culture in America: Argentinian Malbec, New Zealand Savignon Blanc, Californian Cabs overdelivered at $8-15 price segment, using vast supply of grapes and technological breakthroughs. New wine regions and greater diversity of styles within regions introduced variety of creative and easy to drink options to emerging wine drinkers at different price points.
2. With so many options available to us today, the market is becoming incredibly competitive; driven by execution efficiency, marketing, new business models and solid understanding of new drinkers needs and preferences. Baby Boomers are still keeping the ball rolling for top Bordeaux and the Burgundies but unless the growers in say Languedoc-Roussillon figure out how to balance continuity and traditions with innovations and putting customer first, they will probably not survive. Just think about it: the French share of the global wine market has dropped by 1/3 in the last 20 years while wine consumption dropped by half. To be fair, though, I shall mention that french family wine producers outside of main appellations are tackling the issue by introducing alternative wine syndicates i.e. Côtes de Thongue, planting International grape varieties like California cépage, and sending family business heirs to New World wineries to learn about processes and marketing.
3. Wine value chain is phenomenally complex. Before I started taking this class, major associations that came to my mind when I was thinking about wine were terroir, grape, distinctive aroma, crisp acidity, tannins and malolactic fermentation. Right now its more like ripe-for-disruption $70b inefficient domestic market, Wine Spectator, three tier system, cooperatives, packaging and distribution, marketing and direct to consumer operations; and of course joint ventures and partnerships when things relate to markets like China and Japan. A number of startups in the industry are attempting to change this 'tough to disrupt industry: from Tasting Room, Winc and Maker to Vivino, Wine Searcher and coravin. All of them change the way we think about and consume wine and represent interesting acquisition targets for well established players struggling to innovate.
Personally, I am planning to continue wine educational journey and spend couple weeks in Catalonia after all this craziness around Coronavirus dies out. Both as a wine lover and a person deeply interested in wine as a business, I am looking forward to learn about Catalan wines that favor garnacha and carginan grapes and deliver fuller body, higher alcohol content fruit-forward, bold and color intense wines that perfectly pair with local food in Barcelona.
I'm in the same boat, Olga. I think after this course I'm planning to at least take a few introductory courses on becoming a sommelier and will absolutely continue to overuse Vivino.
ReplyDeleteIt's hard to walk away from this course without at least an extremely deep appreciation for the members of the wine community, and not to look at with the same bourgeois cynism of the makers of La Règle du jeu. It was fascinating to see entrepreneurs, legal experts and connoisseurs all under the umbrella of wine when previously I had no real concept of wine as an industry unto itself.
I really hope to act on much of what we've learned this past quarter, and will continue to reflect on means of putting what I've learned into practice.