How Aldi’s global wine buying hub is only part of a bigger consolidated wine market
By Richard Siddle
On the face of it the announcement this week that Aldi is to create a dedicated global wine-buying hub in Salzburg, Austria, to co-ordinate buying and blending for all its markets around the world is pretty big news... But then it’s equally a wonder why it has not done this before. For one of the strengths of the German discounters over the years has been how it has used centralised buying for so many of its core, commodity grocery lines to be able to buy at such competitive rates and keep its prices lower than the rest of the grocers on the high street.
It’s why its tinned tomatoes taste just as good as the most expensive branded version, or its tomato ketchup is on a par with Heinz, its cereals a match for anything Kellogg’s can make. Products are centrally trialled, tested and developed and benchmarked against the number one brands in that category. So when consumers pick them up for a half the price, take them home and discover they taste just as good as the originals they come back for more.
It’s the strategy that has made the German discounters a success in every international market they have gone in to around the world as they have introduced products that match up to the best selling brands in that ...
Like Tesco and Carrefour. It signed a “strategic alliance” last year to look at ways it could pool its more than considerable forces to buy better, bigger, and yes, cheaper. A link up that has to be seen in context with Carrefour's commitment to cut costs by €2bn by 2020, and Tesco's on-going transformation strategy under new chief executive, Dave Lewis.
Here’s how Lewis sees the deal with Carrefour: "By working together and making the most of our collective product expertise and sourcing capability, we will be able to serve our customers even better, further improving choice, quality and value."
Tesco has also joined forces with the major UK cash and carry business, Booker, to align its buying power and reach more areas of the market. It’s why Asda and Sainsbury’s, also in the UK, were so keen to come together before being thwarted by the competition authority ...
The latest report from the French Ministry of Agriculture, dated 19 August, estimated the 2019 harvest in France to be 43.4 million hectolitres, down 12% on 2018 (-520 million litres), down 4% on the five-year average, and the second-smallest harvest in the past five years. Ongoing high temperatures and temperatures and negligible rainfall in many growing areas are likely to make the shortfall larger. France’s 2019 harvest is looking significantly down in size versus both last year’s crop and the five-year average.
Spain Spain’s 2019 harvest is expected to be significantly down by 15 – 20% (-600 million litres) from 2018’s bumper crop, with the 2019 growing season being extremely hot and dry in Castilla-La Mancha and across Spain in general, with water restrictions in place and the non-irrigated vineyards struggling in particular. On Spanish generics however, prices are unlikely to rise significantly and Argentina is offering highly aggressive pricing on generics at the moment.
Italy A detailed harvest report jointly compiled by Assoenologi, ISMEA and UIV – using information collated at the end of August – has estimated Italy’s 2019 harvest at 46 million hectolitres, down 16% (-900 million litres) from 2018’s record 55 million hectolitres.
California With another good-sized harvest underway, Californian bulk wine prices have dropped and offer good value for international buyers.
Argentina Argentina is also highly competitive on all other wines, including Malbec and international varietals. Prices are negotiable, but the country’s increasing inflation (55%) and interest rates (85%+) mean sellers there are likely to be reluctant to further price-cut despite the large inventory – now estimated at 600 million litres.
Australia According to the latest ‘Water Market Outlook’ from the Australian Bureau of Agricultural & Resource Economics, water allocation prices in the southern Murray-Darling Basin are likely to remain high in 2019-20. They have already risen significantly – from around AUD250 per megalitre in July last year to AUD600 per megalitre now – due to a combination of drought and increased demand for water.
Chile Winter 2019 has been the third-driest in Chile since 1950 and water reserve levels are a significant concern for growers.
In November 2019, Beverage Trade Network will host the first-ever International Bulk Wine & Spirits Show (IBWSS) in Shanghai, China.
The two-day event (November 5-6, 2019) will include an exhibition trade show floor for buyers and sellers to meet in a central marketplace, as well as a series of speaker presentations, panel discussions, and Q&A sessions designed to offer practical, actionable advice about the Chinese bulk wine and spirits industry.
Who should attend IBWSS 2019 in China? The event is open for global bulk wine producers, negociants, brokers, contract bottlers, importers and distributors looking to enter the fast-growing Chinese wine market. By becoming an exhibitor at this first event of its kind in China, you will be able to meet directly with Chinese buyers looking to expand imports of foreign wine. At the same time, you will be able to explore the many new offerings from the Chinese wine market, including vineyards that specialize in Cabernet Sauvignon,
Who are the Buyers? IBWSS buyers are retailers, importers, distributors, wineries and distilleries looking to meet their demand or bulk supply or private label projects. IBWSS exhibitors are wineries and distilleries looking to sell bulk wine and spirits, contract manufacturing or private label programs. Exhibitor Registrations for the IBWSS are now open to domestic and international suppliers.
When: November 5-6, 2019. Where: 457 Jumen Road, Unit 407 and R Floor, Bridge 8 Phase IV, Huangpu District, Shanghai, PR China 200023 中国上海市黄浦区局门路457号407室 及 R 楼, 8号桥4期