Tough times ahead for the trade

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Companies may have to tighten up on costs but not at the expense of market penetration, if there's to be any chance of regaining ground once the opportunity comes



11 February 2009

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It doesn’t take a fortune-teller to predict what lies ahead for the Irish wine trade in 2009. Times are going to be tough. For brand managers, importers and distributors 2009 will mean an effort to consolidate market share rather than push for growth.

Margins may be tighter but it’s important to have sufficient market penetration in order to benefit when things begin to improve.

Consumers may find that quality and concentration of entry point wine improves, as falling volume sales mean less incentive for growers to dilute juice through overcropping vines.

Demand for low alcohol wines may falter, as consumers will be drinking less anyway and will not be as concerned as before about their overall intake. Demand for the newly fashionable roses could slow down too, as younger women find themselves with less disposable income and drift toward lagers and ciders.

Another sector which could be hit is the green and organic wine sector. During previous slowdowns, consumers demand for organic wines faltered.

For the past 10 years, however, consumer interest in green wines has been more sustained and many winemakers have added to their cost burden by moving over to organic and biodynamic cultivation and investing in technologies such as lightweight bottles and case packaging.

Some will wait anxiously to see whether consumers will be willing to pay the often small premium that green wines demand or whether they will decide that green agriculture is an expensive frill for the boomtimes, to be dispensed with when price becomes the main sales driver.



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