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By Marina La Forgia
GWS Account Manager, Europe and Latin America

The international wine industry appears to be facing difficult but not impossible challenges in 2009. To better understand what lies ahead, it is important to consider where the consolidated markets are headed and what new and emerging markets are looking for. This information is useful in developing appropriate production and commercial strategies.

Wine is a unique but evolving beverage, and knowing how to react to change is the key to staying on the right track.


Consumption trends

Emerging markets as such China, Russia and India are likely to increase their consumption of low-end wines. While consumers in these regions are becoming more knowledgeable, it is not expected that sales of higher-end wines will grow proportionately. Previsions therefore emphasize quantity over quality.

Growth in 2009 will be led by the Asian markets, where discriminating consumers with disposable income are curious to explore trendy options such as organic and non alcoholic wines, as well as new packaging and formats.

The traditional markets should not be forgotten either. Consumers in the United Kingdom, Scandinavian Europe, Germany and the United States will continue to purchase quality wines, but some surveys indicate that they will do so in smaller quantities or possibly even turn to less expensive products.

Producers need to consider a phenomenon common to every market: today's consumer is on the lookout for a brand image. Whether shopping for an entry-level or premium wine, every consumer responds to an attractive presentation and eye-catching label. The future of bulk wine sales also remains an important question for the industry. Private labelling is a good option for this sector.


Production needs to be adapted

France, Italy and Spain will continue to be the world’s leading producers, but they are facing stiff competition.

Although France will be the world’s largest producer in 2009, it will experience a difficult year, primarily because of the economic crisis affecting many European countries, but also because New World wines are rapidly gaining market share. A key to success for France might be the introduction of a new, entry-level category of wine specifically tailored to consumer preferences in new markets. However, some analysts suggest that France should completely abandon the mass market to focus exclusively on high-end and luxury wines — a category where New World wines are less competitive.

Thanks to the quality of this year’s harvest, Italy could become a bigger producer and a leading player on the world scene in 2009. Spain still needs to make improvements in its approach to production and marketing, but some Spanish producers are already showing signs of flexibility and openness.

Finally, the financial crisis appears to be an opportunity for South American wines, with their increasingly competitive pricing. Chile has already consolidated a place for itself, and Argentina will continue to develop a strong international presence.

There is reason to be optimistic despite the impact of the economic crisis on the wine industry. Wine is a unique product because it can be marketed in a wide range of qualities and prices and is already well established with consumers around the world. In short, producers offering a full range of wines and prices will be in the best position moving forward.

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