You only need to cast your eyes over the news headlines of the last few months with story after story of frosts, floods, rains, or intense heat playing havoc with the average vintages in most major wine producing countries. It has got wine buyers at all levels of the wine market scratching their heads worrying about where they are going to source their wines from in 2018. Which makes this week’s World Bulk Wine Exhibition in Amsterdam even more crucial for buyers than ever before.
With up to 8o% of the world’s bulk wine available to buy at this week’s show it is not surprising the biggest and most powerful wine buyers are in Amsterdam for the World Bulk Wine Exhibition.
They might be coming in hope rather than expectation but the trading floors of Amsterdam’s RAI exhibition hall will be full of the world’s most powerful wine buyers representing major supermarkets, importers, distributors, and hotel groups. But with an estimated 3 billion bottles less wine available to buy or source then they are going to have their hands full trying to find enough to fill their order books and keep their bosses happy back home.
It’s hard to kick off the most important week in the global bulk wine calendar without feeling a little downhearted on the news from the International Organization of Vine and Wine that global production from the 2017 vintage is going to be at the lowest level since 1961, down 16% on last year.
But wine buyers, by nature, are a resourceful breed and whilst it is going to be a lot harder to find the right wine at the right price, there are always enough sellers to keep the international wine market buzzing. That said there will be stressed, anxious delegates arriving at this week’s event, which starts on Monday November 20, never mind the state they will be in when they leave.
Where did the wine go?
The global wine figures can be hard to take in. But Europe is facing its smallest harvest in decades, down by more than 20% from 18.2 billion litres in 2013/2014 to 14.5 billion this year. The EC says that this year’s regional harvest is expected to be the worst since 1982, with production down by 14% from 2016.
The top three wine producing countries – Spain, Italy and France, which between them produce over half of the world’s wines – have all recorded their lowest harvest for decades due to a mixture of frosts, rains and extreme hot weather during the growing season, which saw many grape crops being decimated.
“It has not been uncommon for one of these three producers to have an off year, but rarely have we seen such poor harvests for all three simultaneously,” said Stephen Rannekleiv, a global drinks analyst at Rabobank. The shortages are already having an effect, with the price of some wine varieties increasing by up to 10% this year. Germany too saw volumes plummet to record lows, while Greek production was also down by around 10%.
While volumes increased in parts of South America compared to the low levels of 2016, Chile’s remained low, and was down 6% on 2016.
That said there will be those in Amsterdam confident on getting a good or even better price for their wine. Much of the New World is in a far better place. South Africa may still be struggling with drought and worried about the 2018 harvest, but it was still able to see levels increase by 2% for the 2017 harvest.
Australian producers and bulk wine brokers will be particularly popular with 6% more wine to offer, which New Zealand also enjoying a bigger 2017 vintage.
Checks and balances
Check and balances are what the keeps the international bulk wine market such a fascinating sector to operate in. For too long dismissed as only being for entry level, and poor quality wines, bulk wine is now an important market for any serious wine buyer to be doing business. With more and more exclusive labels, own brands and wines in the £6 to £10 price brackets all now being sourced from bulk wine.
The WBWE itself estimates 40% of the wine exported around the world is being shipped in bulk, and is a market now worth some €3,000m. Which is why there is such uncertainty heading in to this year’s event.
“We still foresee a dramatic decline in wine availability going into 2018,” confirmed Rannekleiv. “We expect the decline [in consumption] to be felt most tangibly in the lower-priced tiers.”
But what wine is available is expected to be of good quality. Which will be a life saver for many producers as it will also see higher prices for certain quality fruit from in demand markets.
WBWE general manager Romero de Condés expects the fair to still offer great potential for those buyers and producers with a clear focus on what they want to achieve. “Crises – such as the drop in production of the latest harvest– bring opportunities to look for added value in our wines, the chance to prioritise quality producers and find new market niches,” she said. “This is what the WBWE offers, and why, particularly in a year of low production such as this, that buyers and producers look to participate and not miss the boat on new opportunities.”
The Buyer will be at WBWE for the first time and it will be interesting to see the dynamics play out on the trading floor where over three quarters of the available bulk wine will be open for sale and negotiations. The event is also not just about buying and selling wine, but provides an important back drop for global debate on the key issues affecting the industry as a whole, and the bulk wine sector in particular. Yaan Juban from the OIV’s opening talk on how it sees the international market will be an important show starter.
The spectre of Brexit is never too far away and it will be interesting to hear how Free Trade Agreements are opening the bulk wine market to new markets and offering real growth for those countries involves. The Canadian bulk wine market will come under the spotlight and how FTAs are opening up its wines to new opportunities in Eastern Europe and Central Africa.
Other key talks are due to take place from leading logistics supplier, JF Hillebrand, and its take on the latest supply chain efficiencies. Cruz Liljegren, business wine writer and bulk wine broker, will give his take on what he sees as the key trends in private label wines.
But perhaps the best place to start is to assess and analyse the medal winners in the show’s bulk wine competition, which is open to those wineries producing a minimum quantity of 10,000 litres. If you’re looking for quality then that’s where you’ll find it. But hurry you won’t be on your own.
- The World Bulk Wine Exhibition is being held at the Amsterdam RAI between November 21-22.
- This is an adapted and extended version of an article that first appeared on VINEX, the bulk wine trading platform.