Bulk wine nearly half of all exports
Bulk wine shipments’ share of the overall wine export market has nearly doubled over the past 10 years according to a new report from Rabobank.
31 January 2012
The Incredible Bulk: the Rise in Global Bulk Wine Trade from Rabobank’s global Food & Agribusiness Research and Advisory department examines the factors that have driven bulk wine exports’ share of the market to nearly double over the past decade at the expense of bottled wine shipments, particularly among New World suppliers – with bulk format now approaching half of total export volumes.
The report looks at the dramatic growth in the bulk wine trade globally over the past two decades and the implications of this for wine suppliers as the segment continues to grow.
“From a process of globalisation, to democratisation and quasi-commoditisation, bulk wine is flowing around the world in unprecedented volumes,” according to the report which states that as well as this, innovation and oversupply of wine, along with currency rates and changing trade flows, have changed both the conventional supply chain model and the distribution of value along that chain.
A challenging retail environment, a decade of oversupply and other factors have constrained supplier pricing power and access to distribution in key import markets.
Among popular premium wines, the convergence in New World wine quality has sharpened the focus on suppliers’ cost competitiveness.
Cost savings are the overriding driver of shipping wine in bulk, stripping $140 million in transport, duty, packaging and associated costs from supply chains of New World producers.The shift in trade to bulk shipments equates to well over $1 billion generated in destination markets vs production source.
Rabobank forecasts that bulk wine shipments will grow further, despite tightened global supply, as suppliers continue to seek low cost supply chain and distribution solutions, but predicts, “Suppliers who cannot compete on a commodity product level, due to high currency rates or cost structures, will need to emphasise product innovation and brand differentiation in order to survive”.
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