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Bulk Wine Market Share Expects to Grow

The technology behind bulk wine has added to the product’s quality and its quantity, one partner at the Ciatti Company, a global wine and grape brokerage company, told Wine Enthusiast earlier this week at the International Bulk Wine and Spirits Show in London.

Steve Dorfman, a partner at Ciatti’s California office, estimated that about 40% of wine on U.S. retail shelves was bought in bulk rather than bottled at the source. This percentage is set to increase with the growth of alternative packaging methods like pouches and bag-in-box.

“As we [Americans] drink more and more wine, imports will grow and so will bulk wine,” Dorfman said. The increasing speed and flexibility of the global bulk wine market allows suppliers to react more quickly to varietal or stylistic market trends. “The market moves a lot faster while consumers are less loyal but more experimental.”

Shipping wine in bulk and bottling it in the target market makes both economic and environmental sense. And it’s changing the way wine is bought and sold across the globe. The technology behind logistics is so advanced that handling bulk wine is no longer detrimental to quality.

Richard Siddle, editor at the The Buyer, a UK trade publication, emphasized the growing global trend for bulk shipping, citing Australia, where more than 60% of total wine exports were shipped in bulk in 2016, up from barely 30% in 2006.

Tailor-Made Wines

Greater agility within bulk markets opens opportunities for smaller players like restaurant groups or retail chains to get tailor-made wines at specific price points, much like national chains do already, Siddle said.

Florian Ceschi, Ciatti’s European director, told Wine Enthusiast “We have seen a lot of consolidation, merging and growth both on the distribution and producing side. The supply chain is becoming shorter. Competition is getting tougher because fewer players are highly focused. Everyone wants to sell everywhere.”

The contraction in global volume caused by the small 2017 harvest across Europe and the ongoing drought issues in southern Europe and South Africa has led to pricing spikes, he said.

“The cheapest Spanish wine we sold last year was 25 Eurocents/liter, this year the cheapest is 60 Eurocents/liter. Prices of rectified concentrated grape must have also doubled,” Ceschi said, creating price pressure especially for entry-level beverages like wine coolers.

Regulatory frameworks also pose challenges, like the change from Indicazione Geografica e Tipica (IGT) to Denominazione di Origine Controllata (DOC) in some Italian appellations, which governs yields and which wines can be moved in bottle or bulk, according to Ceschi. He expects dynamics to change once again when China becomes a meaningful producer of bulk wine.

With production and consumption figures constantly shifting with vintage variation and changing consumer behavior, bulk wine offers much-needed flexibility in an increasingly complex global market. This hitherto unsung segment of the market is bound to grow in volume and importance.