Global Wine Wars

The winery industry can be categorized into red and white wine segments. The red wine segment, measured by tonnage of varietals crushed, has grown at a compounded annual rate of 4.7% for 10 years from 1989 to 1998, and a year over year growth rate of 8.2% from 1998 to 1999. Judging by the strong growth rate experienced in the red wine segment, it is reasonable to conclude that the red wine segment is in the growth phase of the life cycle model. In addition, production of red wine varietals which are relatively unknown such as syrah and sangiovese nearly doubled in a year from 1998 to 1999. The white wine segment, however, is at the mature phase of its life cycle as the segment shrunk slightly by 0.42% from 1998 to 1999. Overall, the industry is still at the growth stage lead by growth in the red wine segment.

Champagne Jean Pernet is a small family vineyard situated in Mesnil Sur Oger, which is in the heart of the Champagne region. Its vineyards span across more than 40 hectares, serving mostly the French market, wine merchants and private clients.

For example, the Appellation d’Origin Controllée (AOC) law in France. Italy followed France and also introduced laws and regulations. Producers supported these laws and regulations, they saw this as an opportunity to differentiate their wine and raising the entry barriers. In a later stage other regions in France were given the, usual lower ranked Vin Delimités de Qualite Superieure (VDQS) and the, even lower ranked Vin de Pays, inexpensive but very drinkable wines for French tables and increasingly for exports. Although this movement was quite rigid, due to a belief that quality was linked to terroir.

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 dynamics of the global wine industry are better understood through a brief history of wine as well as an overview of the wine making process. Some countries have longer historical and cultural ties with wine then others and that can affect the quality and perception of the product in the eyes of the consumer. Also, the conditions in which the wine grapes are raised and the processes used to make the wine can create a superior wine and therefore a competitive advantage.

The expansion of wine production is a result of expansive technological advancements which have made it possible to grow wines in inappropriate locations. For example, wines are genetically enhanced in most new world countries in order for them to survive a deficiency in the environment which may include high temperatures or a lack of rainfall. Irrigation systems area prime example that have assisted iin the wine industry of Australia.

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

The scope of the innovation expertise that New World wine producers have is value-chain wide in scope, and in-depth enough to completely re-order manufacturing, fermentation, distribution channel, pricing, marketing and customer service (Cholette, 2009). New World wine producers

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).

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,

The United States wine industry is a 12 billion dollar industry and is composed of 7,000 wineries and around 1,800 different companies. The three major companies within the industry are Constellation brands, E&J Gallo, and The Wine Group Inc. The industry has made its way through the economic crisis at a better rate than some of the other U.S industries however in order for them to continue to see any type of growth it is important that they acknowledge their issues and find ways in which they can rectify them. The majority of the issues among the industry are problems that cannot be directly controlled by individual wine companies. Therefore it is imperative that wineries find away to use these issues to their

This industry has seen very limited growth since 1986. Based on Exhibit 4 (C-271, the total wine consumption in the US) and Exhibit 5 (C-271, per capita wine consumption in the US) the wine industry is in the maturity stage. It could

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.