Wines of Chile President On Brexit

Wines of Chile President talks about the possibilities of the UK’s decision to vote Brexit and leave the EU.

Last month the UK’s public voted in a referendum to leave the EU with a 52% majority. While politicians in the UK still deal with working out an exit strategy, it will no doubt have an impact on Chile’s trade agreement with the UK – its fourth biggest wine market.

Chile’s industry leaders are already beginning to strategise about the possible outcomes. Wines of Chile President Mario Pablo Silva reflects on the possible effects of Brexit on the Chilean wine industry:

“For our industry this can be an opportunity to grow our sales in the UK. The distancing of the UK from the EU should lead to higher consumption of New World wines and Chile should be at the head of this, while simultaneaously consolidating and enlarging its market in continental Europe.”

“We are monitoring the situation. Today we have zero tariffs, given the free trade agreement with the EU. From a regulatory point of view and policy on labeling and oenological practices we will not see any significant changes that affect us. But surely at the level of bilateral relations, we will see over time and as an association, we will be present and proactive in the development discussions.”

Source: Wines of Chile

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Australian Wine Industry 2016 Vintage Update

Australian Wine Vintage 2016 records increase in crush and average price. The Australian wine sector recorded increases in the average purchase price of winegrapes and its overall crush this year, according to the Vintage Report 2016 released today by Wine Australia, the Winemakers’ Federation of Australia and Wine Grape Growers Australia. In what many in the sector were calling a sensational vintage for Australian fine wine, this year there was an increase of 6 per cent in the national crush to an estimated 1.81 million tonnes.

The report also shows that the average price paid for wine grapes grew by 14 per cent to $526 per tonne across Australia, the highest average price since 2009. The increase in the weighted average purchase price was supported by an increase in the amount of fruit sold in the top graded categories of above $1500 per tonne. Wine Australia Chief Executive Officer Andreas Clark said it is encouraging to hear reports of outstanding quality translated into an increase in the average purchase price. ‘In the last 12 months, we’ve seen Australian wine exports grow to $2.11 billion and the strongest growth has been in wines of $10 or more per litre FOB. This increased enthusiasm for our fine wines internationally is helping to support a stronger demand for premium fruit in Australia,’ Mr Clark said. ‘The positivity for Australian fine wine is resonating within our key export markets and we’ll continue working closely with our grape and wine community to increase the demand and the premium paid for Australian wine.’

The report shows that the amount of premium fruit sold for more than $1500 per tonne increased to account for 7 per cent of the total crush this year. Premium Shiraz in the top graded categories of more than $1500 per tonne rose to 13 per cent of the variety’s total crush and the national average price per tonne for Shiraz increased by 14 per cent. Similarly, premium Cabernet Sauvignon in the top categories grew to 9 per cent of the variety’s crush and its national average price increased by 17 per cent. Overall, the average price paid for red winegrapes increased 13 per cent to $651 per tonne and white winegrapes grew 12 per cent to $398. Winemakers’ Federation of Australia Acting CEO Tony Battaglene said that Vintage Report 2016 shows that the weighted average price has increased over the last two vintages. ‘It’s not uncommon to see peaks and troughs across vintages due to different factors such as fluctuations in demand. However, this year, there is an increase in pricing for the second consecutive year and an increase in the overall crush, which is encouraging. We need to remain pro-active as a sector to continue to grow demand, particularly in our key export markets of the United States and China,’ Mr Battaglene said.

Australian Wine Industry

Vintage Report 2016 shows that the average purchase prices for winegrapes increased across most Australian wine regions. The warm inland wine regions increased 8 per cent to $313 per tonne and cool/temperate regions grew 4 per cent to $1,196 per tonne. Wine Grape Growers Australia Executive Director Andrew Weeks said the increase in average prices is a positive development for the Australian grape and wine community. ‘There is still much work to do, but with recent improvements in key markets and firming in wine grape prices across the nation, there is reason for cautious optimism. It is vital that this positive trend continues and that all in the wine sector are focused on continuing to build demand in key markets.’ The crush decreased overall in warm inland wine regions, with a 2 per cent increase in the Riverland offset by a 2 per cent decline in Murray Darling–Swan Hill and 4 per cent decline in Riverina.

The overall national increase in the crush came from growth in many cool/temperate wine regions, including a 57 per cent increase from Langhorne Creek, 27 per cent in Tasmania, 9 per cent from Margaret River, and 2 per cent from King Valley. The data for the Vintage Report 2016 was collected by Wine Australia through the Wine Sector Survey 2016 and gathered responses covering an estimated 88 per cent of the crush. The report provides price dispersion read-outs and average purchase prices for varieties in more than 40 Australian wine regions. Vintage Report 2016 is available to download from www.wineaustralia.com/winefacts.

For further information, please contact:

Wine Australia Hannah Bentley Communications Manager Phone: 0428 930 865 Email: Hannah.bentley@wineaustralia.com Winemakers’ Federation of Australia Alison Laslett Manager, Communications & Membership Phone: 0424 135 381 Email: alison@wfa.org.au Wine Grape Growers Australia Phone: (08) 8133 4400 Email: info@wgga.com.au About Wine Australia Wine Australia supports a competitive wine sector by investing in research, development and extension (RD&E), growing domestic and international markets and protecting the reputation of Australian wine.

Wine Australia is funded by grape growers and winemakers through levies and user-pays charges and the Australian Government, which provides matching funding for RD&E investments. Wine Australia is the trading name of the Australian Grape and Wine Authority, a Commonwealth statutory authority established under the Australian Grape and Wine Authority Act 2013.

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Dr. Damien Wilson To Speak at the IBWSS Conference

International Bulk Wine and Spirits Show welcomes Dr. Damien Wilson as its keynote speaker on the first day of IBWSS conference and show. (July 26th, 2017, San Francisco).

Dr_Damien_Wilson IBWSS ConferenceDr. Wilson arrived in California in 2015 with 20 years of professional experience in the wine sector. This commercial experience facilitated him achieving the first-ever Honors Degree in Wine Business with the University of Adelaide, and this qualification is among his four degrees in the discipline of Wine Business. He joins us from Burgundy’s School of Wine and Spirits Business, having established a European professorial career after having started with the University of South Australia in 1999. Dr. Wilson worked within the prestigious Wine Marketing Group where he worked on a series of wine business research projects investigating consumer adoption patterns, purchasing motivations and retailing strategies. The client list extends from global organizations such as Pernod-Ricard and the Fosters group, through to boutique wine producers. His professional and research interests have realized an extensive list of trade, consumer and academic publications on crowdfunding, wine consumer behavior, tourism and technology. Dr Wilson’s most recent book chapter on ‘Innovation Management in the Wine Sector’ is the culmination of two years of work to identify and encapsulate the key findings from the emerging field of innovators in wine business.

Wine Business Specialties:

  • Innovation Adoption
  • Purchasing and Consumption Behavior
  • Social Media Strategy
  • Crowd funding
  • Wine Tourism

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Global Bulk Wine and Private Label Industry to meet in San Francisco

San Francisco, CA. July 4th 2016. Growers, wineries and distilleries looking to sell bulk wine and spirits; producers and negociants who offer contract manufacturing; and importers, retailers and distributors looking for private label programs can become exhibitors at the International Bulk Wine and Spirits Show (IBWSS) 2017 by registering at ibwsshow.com.

“The bulk segment holds the largest market share in the wine and spirits industry,” said Sid Patel, CEO of Beverage Trade Network.  “Bulk trading is an age-old trade between producers, but we are now seeing the business take on a very impressive position across the industry. The International Bulk Wine and Spirits Show aims to give the bulk trade a truly dynamic trading platform where buyers can confidently conduct business with the world’s most reputable suppliers.”

Among the highlights of IBWSS 2017 is the Business Conferences. The most influential professionals in the beverage industry will present today’s leading ideas on marketing, sales and distribution. During the two days, 16 TED-Style talks will give attendants insights into what strategies and standards the industry’s top thinkers are using to shape the marketplace, aiming to grow their private label, bulk wine and bulk spirits business. The confirmed speakers include Tim Hanni MW, a specialist in wine analysis and tasting, Dr Damien Wilson of Sonoma State University Wine Institute Unit, Deborah Parker Wong, a Wine Industry Journalist, Educator, Judge and Consultant, Steve Fredricks, President/Partner at Turrentine Brokerage and Brandy Rand of IWSR.

Visitors will also have access to four highly personalized Masterclasses. At each workshop, a panel of experts, winemakers, sommeliers, importers, and educators will reveal the secrets of every glass, regarding grape varieties, regions and personalities of the wine.

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Get more information regarding International Bulk Wine and Spirits Show at ibwsshow.com.

About Beverage Trade Network:  Beverage Trade Network (BTN) is a leading online marketing and B2B networking platform servicing suppliers, buyers and beverage professionals in the global beverage industry.  BTN provides a selection of sourcing solutions for importers and distributors as well as an extensive range of marketing and distribution services for international suppliers.  BTN also runs a line-up of b2b trade shows around the world.  For more information about BTN, please visit www.beveragetradenetwork.com

About The International Bulk Wine and Spirits Show: The International Bulk Wine and Spirits Show (IBWSS) is an annual trade show and conference, open to trade professionals only, which takes place in San Francisco, CA. IBWSS exhibitors are wineries and distilleries looking to sell bulk wine and spirits, producers and negociants who offer contract manufacturing / private label programs and wineries / distilleries / importers who have one time excess stock to clear. IBWSS buyers are other wineries and distilleries looking to meet up their demand, Importers, Retailers and Distributors looking for private label programs, negociants who are looking to meet the growers and producers.

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The History of Wine Negociants

A French term for wine merchants, negociants initially originated in Burgundy, buying grapes or wine from the small producers or winemakers and then mixing, packaging and offering the wine under the their own name. In fact, some of the best known Burgundy makers including Jadot, Drouhin, and Bouchard Père and Fils are principally negociants.

The wines supplied by some of the negociants have become immensely popular owing to their unique taste. As a result, many negociants have evolved into vineyard owners themselves over the years.

How it all began

Initially, Bordeaux wines were sold with nothing but the name Bordeaux on the bottle. By the late 1600s, there were certain regions and brands that started the practice of allowing discerning consumers to choose their preferred Bordeaux vineyard or appellation. Among the foremost brands that developed recognition were Margaux, Haut Brion, Latour and Lafite. Buyers slowly started looking for wines from specific communes.

Once the differences were recognized, or appreciated, what is known today as the Second Growths were the next brands to garner a following. For all this to take place, the need for negociants and courtiers was born.

The prime reason why negociants came to assume a lot of significance in the wine business was because:

  • They bridge the gap between grape producers/vineyard owners and buyers
  • They were able to aggregate sufficient quantity of grapes or wine for the wine manufactures to vinify, which was not possible otherwise, considering that the high quality vineyards were highly fragmented

The earliest negociants date all the way back to 1620, with Beyerman the Dutch firm. In the early 1700s, this quickly expanded when several new companies were founded. These companies continue to operate to this day. Some of these firms have over 350 years of experience in the business. Schroder and Schyler, Nathaniel Johnston, Thomas Barton and the Lawtons are some of them.

 

The Negociant System

Originally, the role of chateau owners was to tend the vineyards, make wine and place it in a barrel. This is how the systems worked as far back as the early 18th century. The rest of the job was handled by negociants – from bottling to sales and distribution. As a matter of fact, the owners of the chateau were all wealthy people, with many of them being members of the royal family. The idea of having to sell their product personally would have been considered unseemly at the time from their point of view. Hiring someone to handle the mundane commercial aspect of wine production was just what they needed.

Perhaps, there was an even more crucial need for the negociant system. Maintaining the chateauand vineyards, making wine and ensuring that everything was in good shape and running smoothly was an undertaking that came with high costs. The wine was bought by the negociants before bottling and sales was a way for chateau owners to get instant funding to maintain their vineyards and keep their wine-making operations running. Soon, the most powerful negociants became a sort of unofficial bank for the owners of chateaus.

The Bordeaux system has continued to be unique. As negociants are sold wine only by the top chateaux, Bordeaux became the only wine-producing area where direct customer interaction was not required with the chateau and the owners. Since there was no wine to buy, it was not necessary to meet the ordinary wine drinkers. Therefore, the royal wine makers discovered another method that allowed them to operate a commercial enterprise without the need to have contact with the masses. This is one more reason the negociant system grew and flourished.

1855 Classification

Although the 1855 Classification was started at the request of the French government, it quickly became the most successful marketing tool the world has ever seen. The classification’s purpose was to promote Bordeaux wine and provide information to offer consumers guidance about which wines were the best and how to pay for them. There was a need to create something simple to do this. And voila, the 1855 Classification was born!

So how did the 1855 Classification come about? Similar to today’s World Fair, the Exposition Universelle de Paris provided France the perfect opportunity to display to the entire world the best of everything it had to offer, including wine of course. This was one of the goals of Napoleon III in 1855. An official classification was ordered by the Gironde Chamber of Commerce to promote the now famousBordeaux-appellation wines. Even in those days, Bordeaux was recognized as the most important wine region in the world.

The Wine Brokers Union of Bordeaux was requested by the Chamber of Commerce to develop and expand the classification system that is recognized and well accepted all over today. A group of known brokers and negociants came together and worked to develop what is now referred to as the official 1855 Classification of the Medoc.

Categories of Wines/Growths

Wines were given rankings in five unique classes for red wines by Bordeaux, calling them Growths – First Growth, Second Growth, Third Growth, Fourth Growth and Fifth Growth. The wines that were included in these rankings all came from Medoc, with the exception of the renowned Chateau Haut-Brionwhich came from Graves. It had to be included as a Growth due to its popularity all over the world. In Barsac and Sauternes, sweet white Bordeaux wines were also included, although it was only in two classes. A special class was given to Chateau d’Yquem – “First Great Growth, Premier Cru Superieur,” which is equal to the best of all the produced First Growth wines.

The Role of Negociants Today

With every chateau today bottling their own wine, it is the responsibility of negociants to sell and distribute the wine to a large number of importers, wholesalers and merchants all over the world. They play an important role because they are responsible for helping create new markets. Currently, there are over 400 active negociants in Bordeaux. The number of negociants that each chateau works with differs – some work with five while others work with more than 100.

It is not necessary for a chateau to sell through negociants, but only a handful of estates have the ability to sell their entire production in every vintage without negociants. Of course, there are a few important Bordeaux producers that sell directly to merchants and private customers and do not sell their wines to negociants on the Place de Bordeaux – one of the most notable is TertreRoteboeuf in St. Emilion. Starting with the popular 2012 vintage, the renowned First Growth estate, Chateau Latour stopped offering their classical wines as a form of futures. Latour rendered an official announcement stating that their wines would be held at the Chateau and offered for sale when they were ready to drink. However, the estate would still sell their wines to the trade through the negociant system.

The negociant system works because it helps in getting wines quickly to the marketplace. However, it has a flipside too. While it helps the best chateaux that take part in the system, it leaves out smaller properties, and this results in their wines not being available to many consumers.To add to it, there is a dependence on selling wines that are on the 1855 classification. Classified wines, the First Growths in particular, are the heart and soul of the system. That has traditionally been their core business, along with the wines of the Medoc. The first, and currently the largest, negociant focusing on the Right Bank’s wines is EtsMoueix.

Although most people feel that the negociant system makes wines more expensive, it is not true for the majority of Bordeaux wines. Interestingly, when Pomerol, Le Bon Pasteur was taken from the Place de Bordeaux and owner Michel Rolland used his own company to market the wine in 2005, it cost even more than it would have, had it been sold through negociants. Within the next few years, Bon Pasteur returned to the negociant system and sold their wine on the Place de Bordeaux.

Negociants have been Bordeaux’s fabric for as long as wine has been produced here. As far back as the 11th century, there were groups of French merchants selling their wines abroad, but the market saw real growth with the advent of the English and Dutch in the 17th century and the Irish and German in the 18th century. They set up businesses along the docks of the Garonne in the district of Chartrons. At this time, they were buying wines in bulk and adding their own names. They certainly added most of the wine’s value as well.

Bordeaux negociants sell wine throughout the world, but their primary location is Bordeaux. Many changes have occurred in the negociant system, with a number of these changes happening in ways that do not satisfy long-established negociants. It will be interesting to see the future of the system, as it makes its way around the world with negociants like Joanne, Diva and CompagnieMedocaine opening up offices in the United States.

Negociant system spreading its wings globally

Though the negociant system originated in Bordeaux, it is now prevalent in many parts of the world, including US, Italy, Spain, Portugal, Australia, New Zealand, England and even China. In fact, in 2012, Diva, a large negociant firm, sold a 70% stake in their company to investors from China. Shanghai Sugar Cigarette and Wine (SSCW) bought the stake. Since 2008, the relationship between negociants and the Chinese market has continued to expand when wine taxes were taken down to zero by the Chinese government.

Negociants USA (NUSA), a leading importer of New Zealand and Australian wines for the U.S. market also enjoys an exclusive tieup with Wirra Wirra, a historic winery that has gained acclaim for producing premium-quality wines from the coveted region of McLaren Vale. The system is only gaining more prominence with the passage of time.

Moreover, with the passage of time, wine negociants have come to assume a far more significant role in the wine making business. They are no longer relegated to the role of mere intermediaries in the trade. Rather, they have now come to the fore, and based on their strong insights into the business, are making some of the most sought after wines in the world today that are raking in big moolah.

Sources:

http://www.foodandwine.com/articles/wine-masterminds-negociants

http://www.bbr.com/wine-knowledge/bordeaux-trade

http://www.thewinecellarinsider.com/wine-topics/bordeaux-wine-history-description-wines/

http://www.newbordeaux.com/#!the-negociant-system/cc0y

http://www.thewinecellarinsider.com/wine-topics/negociants-courtiers-en-primeur-bordeaux-wine-system/

About International Bulk Wine and Spirits Show (IBWSS)

IBWSS_FB_Pic_1200x630_0516_1-04The International Bulk Wine and Spirits Show aims to give the bulk trade a truly dynamic trading platform where buyers can confidently conduct business with the world’s most reputable suppliers. As the go-to shipping gateway on the Pacific seaboard and home to the majority of wineries in the USA, San Francisco is positioned perfectly for the fair. The city has long acted as the USA’s trading post between the northern and southern hemispheres.  With the launch of IBWSS, international bulk suppliers from some of the world’s most important markets will have unprecedented access to the US market.

IBWSS exhibitors are wineries and distilleries looking to sell bulk wine and spirits, producers and negociants who offer contract manufacturing or private label programs, and wineries, distilleries and importers who have one-time excess stock to clear.

IBWSS buyers are wineries and distilleries looking to meet their demand, importers, retailers and distributors looking for private label programs, and negociants who are looking to meet new growers and producers.

Looking to grow your Bulk Wine, Bulk Spirits, Contract Bottling or Private Label Business? Become an Exhibitor at IBWSS and Grow.

 

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The State of the Australian Bulk Wine Market

The Australian bulk wine market is in a positive place, it’s in a pretty healthy state. With low volumes of back vintage stocks there has been an early interest in 2016 irrigated wines. This interest has been further driven by the 2016 yields across these warmer inland regions. With these irrigated regions producing only average crops for 2016, buyers have picked up volumes early. There looks to be a stabilising of price now and opportunity for a small increase as the stock levels reduce.

Demand for premium bulk wines also remains strong. Older vintages and Barossa reds are in greatest demand, with other regions posting good interest in value parcels. There are very limited stocks of 2015 and older wines available. Sales of current vintage are slow as buyers look to pick up remaining parcels of the 2015 and older material. In addition, unlike the irrigated regions, the 2016 vintage yields across premium regions of South Australia were up, on average by 15%. There’s an increased volume of wine around however it’s certainly not excessive. Historically these wines tend to be sold domestically however this market is limited with low opportunity for growth. These wines need to be redirected away from the traditional domestic market routes.

Winegrapes Australia sees opportunities for growth in export and this is remains a focus for us. Across international markets, bulk wine has historically been associated with low cost wine options. This perception is now changing and the positive for our group is, of the many trade shows we exhibit at, there is an increasing interest in our premium wines.
Making premium wines available as a bulk parcel is a point of difference for us. This space is growing and given the expansiveness of our portfolio, and the origins of the wines we offer, we are able to drive solid interest.

China is a strengthening market with good interest. Our winemaker Peter Flewellyn, has invested a tremendous amount of effort in this market and we are now seeing real traction from this investment. Presence in the destination market is just as important for bulk wine sales as it is for bottled. As producers, our strength is connecting with the buyers and listening to their needs.

Quality, consistency and value are what the buyers of bulk wine are after. Winegrapes Australia sees this as our advantage as our customers have the opportunity to purchase wine directly from the grower. It provides the connection right back to a wine’s roots; the grower, the vineyard and the story to go with it.

We see the US market as a real opportunity for us, and the IBWSS is a great platform to introduce some of our premium wines. B2B trade events for bulk wine producers are an ideal way to introduce our products and be able to discuss its origins. As we see it, bulk wine continues to be a sought after commodity and with “in market” packaging increasing in many export markets, this trend is unlikely to this stop.

Report Contributed to IBWSS by Paula Edwards General Manager, Winegrapes Australia 

Paula Edwards

About The International Bulk Wine and Spirits Show: The International Bulk Wine and Spirits Show (IBWSS) is an annual trade show and conference, open to trade professionals only, which takes place in San Francisco, CA. IBWSS exhibitors are wineries and distilleries looking to sell bulk wine and spirits, producers and negociants who offer contract manufacturing / private label programs and wineries / distilleries / importers who have one time excess stock to clear. IBWSS buyers are other wineries and distilleries looking to meet up their demand, Importers, Retailers and Distributors looking for private label programs, negociants who are looking to meet the growers and producers.

 

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