The world’s wine markets by 2030:
terroir, climate change, R&D and
globalization
Strategies for wineries over the
next two decades
Peter Hayes, Vice-President International
Organisation of Vine and Wine (OIV)
Surface area of vineyards worldwide
9.9%
Europe
Asia
America
Africa
Oceania
4.3% 0.7%
16.1%
18.8%
57.8%
4.1% 1.4%
64.4%
9,000
8,800
8,600
8,400
8,200
8,000
7,800
7,600
7,400
7,200
7,000
7871
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
P
Fo ro 200
re v. 5
ca 20
st 06
20
07
86
-9
0
91
-9
5
96
-0
0
01
-0
5
5.0% 2.6%
21.7%
69.0%
11.3%
1000 ha
12.8%
average
Years
World production of wine
Europe
Asia
America
Africa
Oceania
3.0%1.6%
1.5%
4.2% 4.1%
18.5%
16.0%
3.4% 3.1%
78.0%
68.2%
5.0%
17.0%
5.0%
71.6%
300
280
260
270.9
240
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
P
2
Fo rov 005
re . 2
ca 00
st 6
20
07
220
86
-9
0
91
-9
5
96
-0
0
01
-0
5
1 000 000 Hl
320
average
Years
Recent developments of the leading vineyards
1300
1200
Spain
France
Italy
USA
China
Iran
Turkey
1100
1000
900
800
700
1000 ha
600
500
400
300
250
200
150
20
05
pr
ov
Fo
.2
00
re
ca
6
st
20
07
04
20
03
20
02
20
01
20
20
00
100
as
t
20
07
6
.2
00
re
c
Portugal
Roumania
Argentina
Chile
South Africa
Australia
Moldavia
300
Fo
05
pr
ov
20
04
20
03
20
02
20
01
200
20
Australia’s Vineyards
= 20% of France’s
Vineyard Area
Surface area of vineyards worldwide
Areas planted in vines of the 12 leading countries
1200
800
600
1169
Prev.2007 / 2005
867
decreasing
800
stable
increasing
525 500
409
400
200
338
248 231
205 197 174
Po Ira
rt n
A ug
rg a
en l
R tin
om a
an
ia
C
A hil
us e
tr
al
ia
0
Sp
a
Fr in
an
ce
Ita
Tu ly
rk
ey
C
hi
na
U
SA
1000 ha
1000
Forecast 2007
Global Issues: Problems, Opportunities,
Drivers
• Global supply-demand balance & system inertia
– Defining, analysing and interpretation of statistics
– Modelling, scenario analysis and projection?
– Emerging (BRIC) and adjusting producer/consumers
• Structure of distribution and retail sector
– Recent and ongoing consolidation, limits to SKUs
– Alternative access, promotion & servicing pathways?
• Political and social pressures on consumption,
pricing, margins, growth
– Social licence; health/wellbeing, environment
– Sponsorship and tacit promotion
– Competition for natural resources and infrastructure
National/Regional Issues : Problems,
Opportunities, Drivers
• Industry investor and competitor behaviour
– Industry planning, communication and adoption
– Numbers, sector focus, current/future viability,
“adjustment”
• Policy settings
– Regulation, Taxation etc
– Product and industry legitimacy
• Regionality Branding cf/vs Proprietary Brand
development
– Scale and allocation of investments and by whom?
– Legitimacy and credibility of regionality
– Risk; climate change and variability
Consequences
• Industry Legitimacy
– Direct and indirect implications for industry’s “Licence
to Operate”
• Accessibility, reliability and cost of resource
access-land, water, energy, infrastructure---• Accountability
– Development and implementation of BMP+,
diverse/confusing/competing certification schemes
– Alignment with regional landscape environmental
targets, social objectives-community health and
wellbeing
– Role of a “Sustainability Performance Index”
– Public audit and reporting; social/community dividend
and environmental impacts etc
Proprietary : Problems, Opportunities,
Drivers
• Regionality Branding c.f. Proprietary Brand
development
– Risk and exposure to weakest colleague
– Reliable and valued differentiation-especially with
“Climate Change”?
• Consolidation, Innovation and Diversification
– Product; classic vs novel and FMCG approaches
– Marketing
– Sales and distribution
• Optimising business structures and scale
– “Whole of business” modelling, planning and belief
– Implementation and monitoring
– Adaptation and resilience
For Industry and its Businesses
• Improved sector and business analysis
interpretation and communication
• Deeper consideration of
– Business positioning and potential
– Entrepreneurial opportunity and risk management
• Adoption of more creative approaches in
–
–
–
–
R&D for contribution to design and delivery
Business planning and execution-action
Communications and Marketing
Adaptability and resilience
Vitivinicultural c.f. Human Factors
• What is the relative plasticity, adaptability
and resilience of
– The vitivinicultural system
– The human operator
– Societal institutions
– Our markets
• The media
• Customers and
• Consumers?
Business Performance
• Heightened production and compliance
costs
• Greater public accountability measures
• Issues of genuine demand/supply balance
• Impacts of supply chain consolidation and
balance in market power; novel
approaches to marketing and distribution?
• Profitability; individual and regionally
– Capacity for reinvestment, innovation and
development
Accountability, information, education
and communication
• The public perception and product image of
wine has been reinforced by regulatory,
industry protocol and promotional assurances
of origin, quality, integrity and sustainability
communicated to the public, customers and
consumers; especially evident with
“terroir” based propositions (+organic---?)
• Engagement with the public regarding
emerging pressures and industry adaptations
must be well planned and managed in order
to preserve and enhance these attributes
Optimal adaptation to climate,
environment & social pressures needs;
• Development of regionally relevant and realistic
potential scenarios
• Preemptive and active balance of management,
technical and regulatory innovations to allow
effective functioning of the sector, rather than
– a belated uncoordinated recuperative action.
• Strategic investment in technical, social and
economic R&D, information and communication
• Support and promotion by very well informed
leaders and executive management within
the public and commercial sector
Implementation of Mitigation/Adaption
Strategies
• Clear leadership will be required from industry
and government in making a firm commitment
to;
– Transparent and rigorous analysis of the national and
regional impacts of change (climate, social etc) in its
diverse manifestations---technical, environmental,
social and economic
– Communication of alternative scenarios and
candidate responses is made
– Appropriate adaptation of production and marketing
processes
– Well considered legal and regulatory change
recognising a need for more adaptable management
And finally-Should the wine industry
become more adventurous?
• In its engagement with customers and
consumers?
•Different varieties
•Different wine styles
•Alternative representation of regionality
•Different lifestyle and customer/consumer
needs-alternative grape based products
• Adapting industry organisation; variety,
viticultural and oenological techniques;
packaging and promotion to emerging
biophysical and social climates?
Some Stimuli
• Creative thinking; Edward de Bono
http://www.youtube.com/watch?v=UjSjZOjNIJg
• Outlook from Bloomberg Business Week; John
Mariani
http://www.businessweek.com/lifestyle/content/jan2010/bw2010017
_325474.htm
• How Globalization is Reshaping the World of
Wine; The Wine Economist
http://wineeconomist.com/category/eu-wine-market-reforms/
• Strategies to reduce the harmful use of alcohol:
draft global strategy; WHO
• http://apps.who.int/gb/ebwha/pdf_files/EB126/B126_13-en.pdf