British wine writer Jamie Goode has an interesting and perceptive set of
2014 predictions on his blog this week (
wineanorak.com/wineblog)
[In Minnesota terms, for "supermarkets," read "large wine stores" -
which is
certainly timely with the arrival of Total Wine in our market. I thought #5
was particularly interesting.]
1. The commoditization of wine will continue apace
Supermarkets do their job well. For most people, wine is just wine, and they
want a glass of something red, white, pink, or fizzy at a good price. The
improvement in quality of cheap wine, coupled with the near monopoly on
route to market that supermarkets enjoy (bringing with it irresistible
negotiating power) means that wine is becoming a commodity. In the absence
of strong brands, and with infinite substitution in this fragmented
category, there's a huge downward pressure on price. It's great for
consumers looking for drinkable inexpensive wine, but not good for producers
playing at this end of the market, who are struggling for profitability.
2. Wine will continue to lose market share; craft beer is on the rise
2014 could be a big year for craft beer. At the more commercial end of the
market, wine is becoming expensive and quite boring; you have to spend quite
a bit now to get something really interesting. Beer used to be a boring
category, with most beers stuck in a limited flavour space: the rise of
craft beer has seen beer become more interesting, without it becoming more
expensive. You can now get some great flavour experiences from beer for
relatively little money. The same isn't true of wine, and those who make
mid-priced boring wine are the ones who will suffer loss of market share.
3. It's going to be a good year for the Balkans and the ancient wine
countries
In 2013 we have seen some interesting wines coming out of the
Balkan/'ancient wine' countries. Georgia, Turkey, Serbia, Greece, Israel,
Hungary, Macedonia, Bulgaria, Slovenia and Romania are all now making some
really good wines, and are starting to sell these successfully in export
markets. They have good stories to tell, interesting grape varieties and
good terroirs. As they begin to get their viticulture, winemaking and
marketing up to speed, they'll find buyers even in competitive markets such
as the UK. Wines stocked by the Wine Society, Waitrose [major British
grocer, big player in the wine market] and especially Marks & Spencer
[British department store, another big wine market player] are testimony to
this.
4. It's going to be a bad year for many wine writers
The barrier for entry into wine writing has been lowered massively over
recent years, with the dawn of the internet, blogging and social media. It's
not a bad thing: personally, I have been a beneficiary, having come to make
a living out of wine communication as an extension of a hobby website. But
it means there are increasingly more people writing about wine, most with
relatively little reach. For existing wine communicators who have failed to
adapt to the digital age, it has been very bad news indeed. And as PR
companies, generic bodies and wineries struggle to assign authority to the
massed communicators (how do they decide who is worth investing in, in terms
of samples, press trips and invitations?), a lot of people are going to lose
out. Let's just hope that the talented voices, new and old, rise to the top,
and not just the aggressive self-promoters.
5. Many will wish they'd paid more attention to their established markets
A lot of generic bodies and wine producers have been seduced by the lure of
making easier money in China. While there is little doubt that China is
going to be an incredibly important place to sell wine, in 2014 many will
wish they'd not abandoned their established markets to the degree they have
in recent years in order to chase China, which is proving to be a tricky and
uncertain market at the moment.
6. 2014 will be the year of the niche
Wine is a niche interest. And in 2014 we'll have realised that, and we'll be
fine with that. Look: lots of people drink wine, and lots of people enjoy
wine, but for the majority it is just a drink, and they don't have a special
interest in it. Those of us who write about wine need to recognize that
reading about wine is just too abstract to be of interest for most people,
no matter how accessible our writing is and no matter how engaging we are.
But there are enough people who have a special interest in wine for it to be
a niche worth bothering with. We, as communicators, just have to remember
who we are communicating with. The good news: the internet has made
connecting with those who are interested in what we have to say much easier,
and the likes of Kickstarter and the ease of electronic publications has
made it possible for authors to produce books which are too niche for
mainstream publishers to be bothered with.
7. The rise of neo-prohibition will threaten the wine industry in many
countries
Wine contains alcohol, and alcohol is the enemy in the eyes of influential
public health advisors [and Muslim governments - R.]. Many loud voices in
the medical profession are lobbying against alcohol, which is seen as an
evil in much the same way that tobacco has been targeted over recent decades
in western countries. In this debate, there is little acknowledgement of the
social and medical good achieved by modest wine consumption. Alcohol is bad
and it is increasingly being legislated against. This poses a direct threat
to wine, and expect to see this grow as a problem in 2014 as governments
lose patience with the ability of the alcohol industry to regulate itself.
In the UK, binge drinking among teenagers is rife, and becoming an epidemic.
The reaction against this is going to see wine caught in the crossfire, and
the danger to wine production and sale should not be underestimated - not
only have we legislation to fear, but also broader societal attitudes
towards drinking.
8. We'll finally see some real innovation in the wine category
Go into any supermarket and browse the wine aisle. The wall of wine is made
up largely of products packaged the same way (in tall glass bottles), which
look the same, and to the average person, taste the same. There is massive
clustering in terms of look and flavour in the wine category, and there's
little sign of real innovation aside from a few brave attempts with label
design. 2014 will be the year that finally sees some new brands with the
courage to be genuinely innovative. One of the reasons that wine has become
commoditized at the bottom end is because of the lack of strong brands; and
with commoditization comes an inevitable downward pressure on prices.
Happy New Year to all!
Russ