This is marketing research on the wine industry and can include information on the background, market structure, definitions, competitors, trends and developments of wine and is related to other topics such as alcoholic beverages, beer, drinks and distilled liquors.

Table of Contents

[edit] Background

Wine is an alcoholic beverage which is made through a process of fermentation of simple grape juice. The chemical nature of grapes enables the juice to be fermented without any sugars, acids, enzymes or other nutrients being added externally. Other fruits may also be fermented, such as apples or various kinds of berries, and the wines made from these are usually named after the fruit – as in apple wine or elderberry wine -- and are classified as fruit wines or country wines.

Other kinds of wine, including barley wine and rice wines such as sake are made from the fermentation of starchy materials making them closer to beer in nature. The only reason the term "wine" is used in these cases is to indicate the higher alcohol content of these beverages and not as a reference to their production process.

The oldest known evidence of wine production in Europe has been found in archaeological sites in Greece and date back 6,500 years. Traces of wine production have also been found in China, dating from as far back as two thousand years BC. Many of the current major wine producing regions of Europe were originally established and cultivated by the Romans. The basic technology of wine making came to be improved considerably during the Roman times and many grape varieties as well as various cultivation techniques became known. Barrels were an innovation that was developed primarily for storing and shipping wine. In medieval Europe, the Christian Church supported wine, as a necessary part of the Catholic Mass. In a number of places, drinks such as beer became perceived as pagan and barbaric while the consumption of wine was seen as a mark of civilization and culture. Wine was, and still is, forbidden in Islam, but after Muslim chemists pioneered the wine distillation, it came to be used for medicinal purposes.

Generally made from one or more varieties of the European species, Vitis vinifera, when the wine is made from one of these varieties, as the predominant grape, the resulting wine is called a varietal. Blended wines are made from a blend of several grape varieties of the same vintage.

[edit] Market Structure

Wine is a popular and important world beverage. It is used as an accompaniment and an enhancement to a range of European and Mediterranean cuisines. It complements the simplest of traditional cuisines as well. There are thousands of grape varieties that have developed over time. These differ from one another in color, size, and shape as well as in characteristics such as the composition and flavor of the juice, the time needed for them to ripen and their resistance to diseases. Wine grapes generally grow best between thirty and fifty degrees north or south of the equator. They are grown under widely varying conditions and the production processes applied are diverse.

In South Africa, the planting of wine grapes began in the 1650s, and was introduced by the Dutch. The sweet dessert wines produced here have gained international renown while significant amounts of red and white table wines have only recently begun to be produced for the world market.

In North America, and specifically in the United States, wine production is an important industry - especially in California, Oregon, Washington, and New York. Premium wines are produced across the length of California; the cooler temperatures of Oregon vineyards lend themselves well to Chardonnay and Pinot Noir; the Cascade Mountains make the Washington vineyards warmer and dryer, producing a totally different set of grapes; and the Finger Lakes area in western New York produces mainly Riesling.

Argentina produces more wine than any other South American country. The Spanish started vineyards in Chile, also in the 1500s and the country has recently had great success with the French grape varieties. In Australia, the wine industry has recently grown many times over in both production and international reputation.

European wines have many common elements. They are generally named after their place of production and European winemaking still proceeds according to traditional methods. The wines here reflect the local tastes rather than broader international trends and are generally less fruity. France has been the standard for wines around the world and is the place of origin for most of the greatest wine grapes. The five greatest wine regions of France are -- Bordeaux, Burgundy, Rhone, Loire, and Alsace. Germany mainly produces white wines in great quantities, made from Riesling and Gewurztraminer grapes among others. Italy produces more wine, as a country, than any other while Spain has the most acres planted as vineyards.

New Zealand has recently gained an entry into the world wine market. The wines are very different from those of Australia, for example, and are generally white including Chardonnay and Sauvignon Blanc.

[edit] Industry Definitions

• Appellation – the name of a wine-growing region
• Balance – how the wine overall handles the key components of acidity, alcohol, tannin and other flavors
• Body – the fullness, “weight” and concentration of the wine
• Fermentation – the basic process of converting grape juice into alcohol
• Nose – the aroma or smell of the wine
• Oenophile – a wine lover
• Tannin – derived from the skin of the grape which produces its “pucker power”
• Terroir – describes the wine growing region, especially the type of soil and climate
• Varietal – types of wine made from specific varieties of grapes such as Merlot
• Viticulture – the process of growing grapes and wine

[edit] Market Metrics

Top Wine Producing Nations of the world (as of 2005)

• France -- 5,329,449 tons
• Italy -- 5,056,648 tons
• Spain -- 3,934,140 tons
• United States of America -- 2,232,000 tons
• Argentina -- 1,564,000 tons
• China -- 1,300,000 tons
• Australia -- 1,274,000 tons
• South Africa -- 1,157,895 tons
• Germany -- 1,014,700 tons
• Chile -- 788,551 tons
• Portugal -- 576,500 tons
• Romania -- 575,000 tons

The Top Ten Wine Exporting countries (2005) 

Country			         Exports 
			(in thousand hectoliters)

Italy 				 15,100  
Spain 				 14,439
France 			         13,900  
Australia 			  7,019  
Chile 				  4,209  
United States		          3,482  
Germany 			  2,970  
South Africa 			  2,818  
Portugal 			  2,800  
Moldova 			  2,425

The Leading Wine Exporting Nations in Market Share, 2005:

County			Global Share of Exports

France			         22% 
Italy				 20% 
Spain				 16% 
Australia			  8% 
Chile				  6% 
United States		          5% 
Portugal			  4% 
Germany			          4%

[edit] Trends and Recent Developments

Recent decades have seen a strong rise of “branded wines”, especially from outside the EU countries. Surplus production as well as retail consolidation have affected the prices in the UK, the U.S. and in continental Europe, and the value of wines in the export market seem to be increasing at a much greater rate than the volume.

In the United States alone, exports have grown by as much as 25% to the UK as well as a significant amount of sales to other countries. Wine is the fastest growing and most consumed adult beverage in America and wine has overtaken beer as the alcoholic beverage adult drinkers consume most often. Approximately 39% of American drinkers today consume wine more often than beer.

Between 2003 and 2006 the largest growth in wine sales has been in the super-premium category ($15 and above), which gained 123%. Industry statistics predict that the United States will be the number one global consumer of wine by 2010.

[edit] Sources

Wikipedia

Encyclopedia Britannica

Winebusiness.com

AC Nielsen

About Wine

The Wine Book

[edit] Next Steps

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