If anything demonstrates how quickly the bulk wine market is evolving, it’s that many of the businesses at this year’s World Bulk Wine Exhibition weren’t selling bulk wine at all.
“There is a secondary market emerging here,” said wine consultant Cees van Casteren MW. “There are companies here who are interested in supplying the bulk wine market with yeasts, bacteria and equipment, so this shows a big change.”
The nature of the bulk wine market is also changing, as branded and own-label wine is increasingly shipped in bulk, to be bottled in Europe. And as the market expands, so has the show dedicated to it. It’s a no-frills affair, with most exhibitors choosing the most basic stands. But business seemed brisk, with people reporting a good level of traffic and interest. “There are no bullshitters – everyone who walks into this show is relevant,” said Van Casteren.
New opportunities
As the show grows, so does market transparency, because buyers who once relied on brokers can now learn the true market price of the world’s wines, directly from the producers themselves. The timing of the fair – late November – also allows traders to gain a clear impression of the quality of the latest harvest, by making their way through the large ‘silent tasting zone’. Knowledge of the size of that harvest is another essential factor. A short white crop in Southern France, for example, led to a flurry of interest in Spanish white from French wine companies.
“We created this fair because bulk wines are different,” said Cristina Villar Miranda, communications manager for Pomona Keepers, the Spanish company behind the exhibition. “Bulk wine as a sector wasn’t transparent, because everything was in the broker’s hands. Now everybody knows everybody.”
Villar Miranda said one side effect is that producers have realised they don’t have to compete solely on price, but can compete on quality. “People used to think – I am competing with Argentina or France, or people selling the same product as I have, so I am going to lose market. But it’s not like that, because not every buyer wants the same thing,” she says. Villar Miranda said people always assumed that all bulk wine was a totally interchangeable commodity; in reality, taste profile matters. “France is a good example,” she said. “They sell a lot of bulk wine, but they buy a lot as well – they are the main buyers of Spanish bulk. What they are looking for is a very particular product, we realise now.”
This acknowledgment of the importance of quality is evident in the wine competition launched by the fair organisers. Exhibitors like Justin Moran of Limestone Coast Wines in Australia said that the gold medal won by his Sauvignon Blanc had helped when talking to potential customers. Moran’s stand was busy, with his chief winemaker helping visitors try out various blends. This hands-on approach is something that is easier to achieve when face to face with the supplier than when buying through a broker, and it is a feature of the increasing premiumisation of bulk wines.
Villar Miranda says another new development is the influx of new countries. Not surprisingly, perhaps, the former suppliers to Russia – Moldova, Ukraine and Georgia – were out in force. “They are making a huge effort to be here,” says Villar Miranda. “They are learning how to do things differently, because the last few years have been really hard for them.”
Falling prices
Ultimately, however, bulk wine is about price, and there was talk that with plenty of wine still available from countries like Australia and Spain, coupled with the emergence of new players, prices had fallen to as little as €0.35 ($0.43) a Litre, depending on the product.
Rafael del Rey, general manager of the Spanish Observatory of Wine Markets, said that a lot of volume at lower prices had been a trend for several months. In his annual market overview at the exhibition, he noted that sparkling wine continues to grow. “Exports to China are slowing down, and we don’t know what the situation in China really is,” he said, adding there were probably overstocks. “Russia is buying much more wine than in previous years.” He said that bulk wine now represents a little more than a third of the volume of world wine trading, though only around 11% to 12% of the total value. Volumes are growing because of a good harvest in the northern hemisphere, “but this has translated into lower prices”.
So it’s safe to predict that these forces – the trend towards shipping more wine in bulk, the emergence of new countries on the international scene, and the development of a secondary supplier market – mean the exhibition will grow. Ian Loghin from Moldova’s Dragan Group, says they’ll definitely be back, because they see the bulk market as an increasingly important place to be.
And were there any surprises at the fair? He nodded.
“The number of bicycles in Amsterdam.”
Additional reporting by Robert Joseph.
