CropTec Show
Farminguk
25 August 2016 | Online since 2003
Auto Trader Ltd


23 November 2012 09:33:09 |News

Wine companies search for new growth markets


With maturing or declining sales in many traditional markets, wine companies across the globe are increasingly searching for new growth markets.
Emerging markets are attracting the interest of nearly all major wine companies.
But those companies that were late to invest in these markets often have a greater challenge as the competition has already established routes to market and has garnered share of mind with the consumer.
While China and South Korea probably rank as the most attractive emerging wine markets - Mexico, Brazil, Poland and Nigeria have been identified as four ‘hidden gems’ that have the potential to become important growth markets.
Early investments to establish a route to market and build brand awareness hold the key to long term growth in these markets.

Hidden gem markets are not currently the largest nor the most attractive wine markets in the world. These markets offer good prospects for long term growth, but are in earlier stages of development and may thus carry more risk.
However, the rewards for identifying hidden gem markets, investing early and successfully developing a beachhead may be worth the risk for some companies.
Mexico, Brazil, Poland and Nigeria - each offer good prospects of medium to longer term growth for ambitious wine exporters willing to make early investments in building their brands in these markets.

The Mexican market may be easy to overlook, but it is proving lucrative for many suppliers.
As well as enjoying a strong economy, the growth in the middle class population is leading to improved wine consumption trends and wine imports grew at a 20 percent compound annual growth rate (CAGR), between 2006 and 2011.
Similarly, imported wine volumes in Brazil grew by nearly 30 percent in the four years from 2007 and 2011 due to growing interest in wine and limitations of domestic producers to match the quality of imports.
Poland too, has seen strong growth in demand for imported wine, and although pricing remains constrained, the relatively low levels of corruption may make it an attractive option for foreign investors.
In contrast, Nigeria is far less transparent than Poland and requires a much higher tolerance for risk, but wine imports have been growing at a 16 percent CAGR in recent years, and the government has made progress in modernising the economy and reducing social conflict.
With a population of approximately 170 million and large strategic petroleum reserves, Nigeria has a strong foundation for continued economic growth and increased demand for wine.

Stephen Rannekleiv, Rabobank Food & Agribusiness Research analyst said: “Wine companies are now facing the question of what to do with these four hidden gems."
"Although they present opportunities, each has a very different market with much uncertainty for traditional branded wine companies. Furthermore, along with the opportunities in these markets come risks, and the possibility that the opportunity may not be realised."
"The flip side is that early exposure to nascent markets gives a company hard-won experience and expertise as well as a head start on the competition that will likely emerge as the markets develop. Wine companies that manage these opportunities correctly have a chance at securing long-term profitable growth”.

Download

0 Comment

loginuserlogo
Name

Please enter your name


Email

Please enter your email

Please enter valid email


Comment

Please enter your comment


Post Comment

Your comment has been submitted successfully. Please wait for admin approval.


Comments

No comments posted yet. Be the first to post a comment


Ireland | 25 August 2016
EU worry at lack of GM food testing in Ireland

Inspectors from the European Commission’s Directorate General for Health and Food Safety said the lack of laboratory capacity at the Public Analyst’s Laboratory (PAL), which is located in St Finbarr’s...


France | 25 August 2016
French farmers may face more pain as dry weather hits crops

French farmers can’t seem to catch a break from the weather. After deluges earlier this year decimated wheat crops, now not enough rain is threatening their corn. Many fields in the European Union’...


France | 25 August 2016
French farmers protest over low milk prices outside major milk processor

Some 400 French dairy farmers have blockaded the roads around Lactalis, the milk processor based in Laval, France, this week in protest against low milk prices. The farmers have taken over the roun...


USA | 25 August 2016
The next agriculture revolution is under our feet

At the core of agriculture is innovation. Advancements in agricultural technology throughout the past century have allowed farmers to feed a population that has grown from less than 2 billion people t...


Australia | 25 August 2016
Dairy industry goes under spotlight as Barnaby Joyce signals end to $1 milk

Scott Morrison has asked the Australian Competition and Consumer Commission to investigate the national dairy industry as the agriculture minister, Barnaby Joyce, emerged from a dairy crisis meeting d...



Trending Now

Viewed
Discussed


Top stories you may have missed
FarmingUK
FarmingUK Logo

FarmingUK

The British public are overwhelmingly in favour of keeping or strengthening...


FarmingUK
FarmingUK Logo

FarmingUK

The sustained recovery of pig prices since the spring has come at a time wh...


FarmingUK
FarmingUK Logo

FarmingUK

A World Trade Organisation (WTO) panel has declared the Russian import ban ...


FarmingUK
FarmingUK Logo

FarmingUK

A new study has linked oilseed rape crops grown from neonicotinoid-treated ...


FarmingUK
FarmingUK Logo

FarmingUK

Philip Hammond is to guarantee billions of pounds of UK government investme...


FarmingUK
FarmingUK Logo

FarmingUK

Access to the foreign labour market is 'critical', according the chief exec...


FarmingUK
FarmingUK Logo

FarmingUK

The Tenant Farmers Association has said the National Trust's vision for a p...


FarmingUK
FarmingUK Logo

FarmingUK

Ulster farmers will 'not lie down and wave the white flag' when Brexit nego...


FarmingUK
FarmingUK Logo

FarmingUK

The cost of rural crime to the UK economy costs £42.5 million a year, accor...


FarmingUK
FarmingUK Logo

FarmingUK

A young farmers club member from Oxfordshire has created a petition on the ...


closeicon
Username
Password