Bulk wine grows to 50% of New World exports

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The international wine trade hit a “watershed moment” in 2013, with half of all New World wine exports coming from bulk supplies, according to Rabobank.

The latest Wine Quarterly report from the bank for Q2 2014 shows that bulk and bottled wine from the New World are now on a level pegging, up from a 25% share for bulk 10 years ago.

The report focuses on South Africa, which saw exports grow 26% in 2013, thanks to a combination of  the soft rand and rising bulk prices.

Rabobank states that both the bottled and bulk sides of South Africa’s wine business benefited from improved cellar technology. It states that bulk wine has been helped by a shift in supply base from premium regions such as Stellenbosch and Paarl to regions that offer higher yields, such as Breedekloof, where production is expanding. Meanwhile South Africa’s bottled wine exporters have boosted sales by focusing on less traditional markets  - mainly other African countries – but also China.

Bulk wine exporters must have efficient supply and logistics models, while bottled wine’s success is becoming increasingly allied to strong brands, says the report. “Bottled wine exporters that continue to compete predominately on price, rather than brand strength, will find it increasingly difficult to compete with the bulk wine business”, it states.

Southern hemisphere

Chile and Argentina both face declines in their 2014 harvests of 20% or more, while South Africa is also expected to come in slightly below last year. Early indications from Australia show its harvest is showing a “higher degree of variability than normal”, while New Zealand is expected to have a new record harvest this year.

Northern hemisphere

There is concern over drought conditions in California, which could lead to a reduction in 2014 yields from the US. In Europe, Spain’s bumper crop in 2013 – up 40% on 2012 - is the main story, with good availability of “economy priced wine” from La Mancha.

 

 

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