For wineries, the end of vintage means the task of marketing and selling the new vintage can get under way.
However this year the challenge for many wineries will be one of allocating a scarce resource, rather than soul searching as to where the sales will be made. A smaller vintage will mean lower sales and lower income streams for many.
The changed supply demand balance in the industry is likely to have a major impact on industry performance over the next year.
But the world into which the industry is selling is also changing and as industry we would be wise to keep a watchful eye on those changes, now and into the future.
Social Conservatism means Social Responsibility
In some markets in which we sell wine there appears to be a growing social conservatism around matters relating to alcohol. Whether this social conservatism is caused by the aging of populations, the tough financial times, growing perceptions of problems from excessive 'alcohol' consumption or other causes it is difficult to say. However, it is manifested in markets such as the UK and New Zealand (our two biggest volume markets) by legislators considering law changes such as minimum pricing, raising the age of purchase and possible restrictions on advertising. Such law changes will have direct impact on wine markets if they are enacted.
In this more conservative social environment it is important the industry demonstrate its awareness of the changed landscape by showing it is socially responsible. This point was made strongly in the recent PriceWaterhouseCoopers strategic review. Now more than ever we must be socially aware and socially responsible.
The Pacific Century
The 20th century was the so-called Atlantic Century dominated (for good or bad) by the wealth and happenings in Europe and North America (think WWI, the Great Depression, WW2, The Cold War etc). Many commentators now believe the 21st century will be the Pacific Century where global developments are shaped by the interplay between the rising power and wealth of Asian countries (notably China) and the existing dominant global super-power, the USA.
For the wine industry the rising consumption of wine in countries such as China is already starting to make its impact. Did you know, for example, that China is already the largest export market for NZ Cabernet Sauvignon and blends, and it is our third largest market for Merlot.
The growing importance of Asian markets, and indeed Pacific Rim countries in general is something that needs to be recognised by our industry. It means we will have new consumers often with unfamiliar cultures and languages. We need to invest more effort into these markets and we need to ensure that our access to such markets is competitive, which means trade pacts such as the Trans-Pacific Partnership are vital to our future.
Our future, there is no doubt, will be strongly influenced by Pacific developments, which puts us very much at the centre of the 21st century world.
Sustainability
There are still some people in the industry who question the growing focus of our industry on matters sustainable. While there may be arguments about the degree or the way forward, there is no doubt in my mind that being able to demonstrate our environmental credentials is just as vital as being socially responsible and economically profitable. In a world dominated by a resource hungry, booming human population, being able to say we care for and look after the environment in which we grow our grapes and make our wine, is going to be a vital pre-requisite to market place success in the upper end market segments in which we operate. ■
