Global Wine War Case Study

A History of the World in 6 Glasses, is a book that explains what is happing in the world during the time of a popular drink. From, Beer in Mesopotamia to Coca-Cola in America, our world changed, a lot. The most interesting drink out of the 6, (Beer, Wine, Spirits, Coffee, Tea and Coke) was defiantly wine. As I read the book I could always connect a section of every chapter back to wine. Wine went through many changes, like the other beverages, but it stuck out to me for 3 main reasons. First off, the “Capitol of Wine” wasn’t in the same place the whole time. For example the Coca-Cola section was basically all based in America, where as wine went from place to place. The second reason the wine section stuck out to me was because of all the

The structure of the wine industry is quite different around the world. The barrier to entry is relatively higher in the New World than in the Old World. Referring to the market data on the level of concentration in 1998, people can see a few players dominate the markets in Australia and the U.S. while the level of concentration is quite low in Europe. Therefore, the rivalry in Old World is intense there.

“The size of global wine industry in terms of revenue , at the beginning of 21st century ranged from 130 to 180 billion in retail sales.” Furthermore, There are over 1 million wine producers in the world.

Some experienced marketers such as Coca-Cola, Nestlé, Pillsbury and Seagram entered the wine industry and left behind the consumer focused attitudes and the sophisticated marketing skills.

Beginning as an exotic foreign drink in Mesopotamia that few could afford, wine rose in popularity over time and became the main beverage of Greece and Rome. In Mesopotamia wine was restricted to an elite group of people who were able to afford it. As time went on wine slowly became more accessible to people of lower classes. Standage explains it as “ As the volumes grew and prices fell, wine became more accessible to a broader segment of society” (Standage 49). The vine rapidly took hold throughout Greece and the Greek began to produce wine on a large scale. This is what lead to the immense cultivation of grapevines and olives over grain farming. Drinking wine was viewed as more civilized than the consumption of beer by the Greeks and the

Within the marketing umbrella, new world producers had broken paradigms using wine box packaging for sale and creating new segments of wine classifying these by the type of grape, which caused that consumers begin to compare what kind of wine to buy, its origin, grape, and quality before buying.

These are the ‘new world’ producers which are generally located in the Southern Hemisphere. Australia, Argentina, South Africa and the US have growing wine industries and are taking a large percentage of the global market share from old producing nations.

The buyer’s power within the wine industry varies between different places in the world. There are for example strategic differences between Europe and the “New World”. The “New World” includes countries like the US, Australia, Chile and South Africa. In Europe there is a big competition

Some of the largest New World producers were the United States, Australia, Chile and Argentina. The largest of the Old World producers were France, Italy and Spain. The world’s top 10 wine exporters accounted for more than 90 per cent of the value of international wine trade. Of those top 10, half were in western Europe, and the other half were New World suppliers, led by

1.Discuss critically the competitive advantages of New World wine producers and contrast these against their Old World competitors.

The first of these events was the spread of Phylloxera, which had destroyed much of Europe’s vineyards. Napa’s vineyards remedied this by grafting local rootstocks to their vinifera vines. In a way, Phylloxera’s devastating effect on Europe, helped Napa Valley and American vineyards in general. Tariffs “levied against French wine in 1879 coupled with the small production of European wines, due to the ravages of Phylloxera made California wines more popular than ever.” (Leve).

Production and consumption of wine was mostly localized until the early 1990’s. Wine producers in different countries were traditionally isolated from each other, and most of the world’s wine drinkers consumed either local wines or imports from nearby producers. Winemakers had minimal cross-border interaction and followed local traditions.

When people think of French gastronomy wine is an essential component of her culture. While it remains a one of many licit joys the French indulge in, this gluttony is an important image and offering to tourist. Although parts of France greatly rely on the production and manufacturing of wine more than the actual consumption, they still rather enjoy their wine. Oenology in itself is a very interesting study and takes the appreciation of the drink to a whole new level. French wine is much like the French themselves its well-dressed, elegant, never overpowering, and well behaved. Even on the topic of Oenology the variety and quality that France provides is incredible. Two well-known regions, Rhône and Bordeaux, produce the some famous wine names such as Côtes-du-Rhône and Château d 'Yquem. The Côtes-du-Rhône is more earthy and tends to be described as rustic while Château d’Yquem is a sweeter or dry wine, and also holds the record for most expensive wine bought at 117,000$. Avoiding great detail it’s easy to say that the difference starts in the soil that makes the grapes. In a way the wine can be seen as a model for modern production and food by promoting quality and variety, in other words, an optimistic point of view for French food. France is always advancing in food and wine production therefore it is a fair assumption that they will continue to grow together.

In 2001 there were over 1 million wine producers worldwide, and no firm accounted for more than 1% of global retail sales. Because of this, it would be nearly impossible for the Robert Mondavi winery to dominate sales in any region. Due to Mondavi’s efforts, the winery became one of America’s most innovative,

This case describes the global development of wine industry, and how new world wine players occupied the global market share from old world wine producer gradually. It is very interesting that author selected the Britain as the sample stage for the battle between the new world wine campaign and the traditional campaign.