Everything you know about wine is right — for now. But by mid-century, it will be wrong, and here’s why. Climate change, shifting global demand, consumer preferences, new vinification techniques, and marketing will transform the industry and upend conventional wisdom. This transformation has profound implications for the environmental footprint of the industry and conservation, both in traditional wine regions and in emerging wine-producing areas.
Things that would ring true to a well-informed wine consumer right now might include: Most wine is produced in Mediterranean climates;
European wine regions are a successful marketing tool;
China isn’t a big consumer of European-style wine;
Extensive chemical manipulation during vinification is not common in fine wines.
By 2050, each of these statements will be wrong, and the stakes couldn’t be higher – for wine, for the environment, and for the environmental footprint of wine production. Let’s look at each of these themes in turn.
The objective of the paper is to investigate how the market structure of grape varieties affects the performance in the wine industry. We examine the export performance of countries in 2000 and 2010 and analyze the market structure hypothesis applied to grape varieties and the technical efficiency of the market structure of grapes on exports performance using a Data Envelopment Analysis (DEA) methodology. Our results are based on a sample of 20 major wine exporting countries. First, only a few countries are efficient. Second, a small number of prime varieties is not a condition to obtain efficiency. Finally, concentration of top varieties is not sufficient to be efficient.
This paper identifies the macroeconomic determinants of fine wine prices and estimates their impacts on a monthly database from 1996 to 2015. The fine wine demand from emerging markets plays a key role in fine wine pricing, and more precisely, on the fluctuation of Bordeaux fine wine prices. Furthermore, the continuous weakening of the U.S. Dollar in real term favors the fine wine prices to increase. Since 2011, the slowdown of economic growth in emerging markets, followed by the depreciation of national currencies has engendered negative effects on the fine wine market. Along with the process of financialization in the fine wine market, fine wine prices have become more volatile. Factors such as money supply, real interest rate and the growth of investment funds start to show their influence on fine wine pricing.
This study investigates the impact of working capital management (WCM) on firm profitability in the French wine industry. Based on annual data of 430 wine-producing firms from 2003 to 2014, we estimated the impact of the cash conversion cycle (CCC) and its components (days inventory, receivable and payable) on the return on assets. Other firm factors, such as size, growth, tangibility and leverage, were used for control. We took into account nonlinearity, unobservable heterogeneity, heteroscedasticity and endogeneity through the two-step GMM estimation method and showed that WCM did not have a significant impact on the profitability of French wine firms. Furthermore, we found no optimal level of CCC that would allow the firms to maximize their profitability. Only days account receivable and payable significantly and negatively impacted profitability. These results differ from those of previous studies and suggest that French wine firms should shorten the time both to collect cash from sales and pay providers. Contrarily to what we believe, the delay in converting inventories to cash does not significantly impact profitability. The managerial implications of these results were further explored by interviewing three wine firms in the south of France.
Product differentiation, competitive advantage and increased sales could be achieved by wineries through the adoption of environmentally focused practices (Nowak and Washburn, 2002). However, a competitive advantage can only be gained in the marketplace if firms are able to communicate to consumers’ about their environmental focus (Bisson et al., 2002). Environmentally sustainable products are credence goods; consumers cannot ascertain their environmental qualities during purchase or use (Crespi and Marett, 2005). Consumers are not present during the production process of the product and therefore cannot assess environmental friendliness of production. Therefore, extrinsic cues such as packaging has an important function of eco-labeling, being used to reduce information asymmetry between the producer of sustainable products and consumers by providing credible information related to the environmental credentials of the product (Leire and Thidell, 2005). Eco-label logos and claims are the most used extrinsic attributes to signal the environmental attributes of wines to consumers. While organic and biodynamic are the most successful eco-claim at this stage, it is by no means the only sustainable claim. Environmental responsible, made with sustainable practices, 100% eco-friendly, carbon neutral, greener planet are other environmental sustainable claims that can be found on wine bottle labels (Zucca et al., 2009). Because the eco- label/claims are the first line of communication to entice the consumer, it seems therefore extremely important that other extrinsic packaging attributes can also meet the “information” that environmental friendly claims try to convey.
An important attribute of wine packaging is type of closure that by its sealing properties can directly influence the intrinsic attributes of wines. Moreover, closures are also an important extrinsic packaging attribute. Various types of closures such as cork stoppers, screw caps and synthetic closures can be considered by consumers to be a direct reflection of the wine quality and in some extent influence their purchase decision. (Chaney, 2000; Reidick, 2003; Toubia et al., 2005; Barber and Almanza, 2006; Barber et al., 2008; Marin et al., 2007a; Barber et al., 2009b). Although ample research has been conducted on the importance of wine bottle closures in quality perception and purchase decisions of consumers in different countries, however, little is known about how type of closure affects consumer expectations, price and willingness to purchase eco-labeled wines.
The purpose of this paper was to investigate perceptions and current experiences with kegged wine (also known as wine-on-tap). Winery owners, winemakers, and other winery employees from various U.S. wine growing regions responded to an online survey.
Some wineries produce kegged wine on their own, while others use third-party kegging facilities. Eco-friendliness and wine quality preservation were considered important, yet not identified as primary motivators. Increasing sales volume and competitive advantages, on the other hand, were driving the adoption of kegged wine.
On average, the estimated sales price for a keg (5.16 Gallons) of white wine was US$ 174 and for a red wine keg US$225. Kegged wine accounted for almost 9% of the wineries’ annual production volume. Most wineries used the same brand for their kegged wine as for their bottled wine.
The findings of this study provide initial insights into experiences, reasons, and perceptions related to the adoption of a recent wine packaging innovation: kegged wine. The sample was mostly comprised of California wineries, a market where distances between wineries and third party kegging specialists are relatively short; therefore, the generalization of the results may be restricted.
China is one of the most attractive wine markets and a hopeful wine producer in the 21st century. Current studies of wine in China tend to focus on the wine market but seldom analyze the domestic wine industry which contributes approximately 80% of the total wine consumed in the country while Westerners know little of it. This paper analyzes the current situation and the perspectives of the wine industry in China considering both traditional conditions such as wine history, wine policies as well as recent conditions such as e- commerce, climate change and domestic economy trend. We conduct a “SWOT” of the Chinese wine industry considering four sectors (producing, processing, selling and consuming) and use a SWOT Matrix analysis. Then we provide strategies for the development of the Chinese industry from governmental level, industrial level and enterprises level.
This paper examines the survival rates of cooperatives. Traditional theories suggest that cooperatives are inefficient and consequently are prone to failure, but recent literature suggest they could be more resilient. Can cooperatives cope better? We found that French wine cooperatives survive longer than corporations. This result is robust to semi-parametric and parametric models, even when we control for mergers and acquisitions exits. The higher survival rate of wine cooperatives seems to be associated with an ability to shift the fluctuations of their environment to their members.
Crowdfunding has recently emerged as a novel way of financing new ventures. This coincides with a growing interest in wine as an investment good and with a search for new funding opportunities by wine makers. In this study, we first suggest a brief review of the literature on wine and finance as well as on how crowdfunding is entering the wine sector. In particular, we question who are the potential investors willing to engage in wine crowdfunded projects, and what kind of revenue could attract them. To go further, we also exploit an original survey where interviewees are asked about their wine consumption and purchase, their knowledge about crowdfunding, their relation to the Internet, their investment and project related to wine crowdfunding and their expectations concerning the returns from this type of contribution. We suggest that, among all forms of crowdfunding, the donation/voluntary contribution side, driven by intrinsic motivation, is likely to remain marginal compared to crowdfunding as an investment or a form of early purchase – a retail form of the “en primeur” sales. More generally, we ask how the public can help finance this sector and diversify the way wine is sold.
The purpose of the study is to analyse the determinants of wine price mark-up in restaurants. Wine sold at the restaurants is a substantial contributor of the restaurants’ profitability and better understanding factors impacting mark-up is critical for the industry.
Sommeliers around the world, mostly members of the International Sommeliers Association (ASI), have been approached to complete an internet based questionnaire, from February to May 2014. Of the 800 who started the survey, 267 fully completed the questionnaire, generating 1869 observations. W e regress the declared mark-up against restaurant’ s and wine list characteristics, including managerial practices, and wine stewart characteristics.
If the restaurants apply a simple rule of thumb to set wine prices, when focusing on every price segment, it appears that sommeliers doesn’t matter that much. The restaurant positioning and style is more likely to explain a positive impact on wine prices’ mark-up.
Our findings suggest to adopt a more holistic perspective on mark-up decision, based on various criterion including: the long experience of the sommeliers, the ability to ‘capture’ clients of the hotel attached to the restaurant, and a fine dining positioning.