By Indiana Lee
Your winery may be the talk of your region, but there is significant potential for it to go further. Over the last several years, the global wine market has seen some incredible growth. One recent report found that 2022’s global wine exports hit a record high of €37.6 billion.
This presents exciting opportunities if you’re looking to take your wine to the international marketplace. Nevertheless, this is anything but easy money. There are various challenges you’ll face as you prepare to get your wine onto the tables of consumers across the world.
The challenges aren’t insurmountable, though. Let’s explore how you can effectively navigate the global wine market.
Recognize What’s Unique
A thriving global wine market is good for everybody involved with production and distribution. This does present some challenges. One of these is the significant amount of competition. Every time a person steps into a store or enters a keyword on a search engine looking for wine, they’re greeted by an embarrassment of riches. To stand out in the crowd, you need to recognize and promote what’s unique about your product.
So, where can you find evidence of your uniqueness? Firstly, consider what sets wines from different regions apart. Wines from distinct appellations — often known in France as Appellation d’Origine Contrôlée (AOC) — have different features. This is due to the specific ways grapes are grown in those areas. The environmental factors of certain regions, from climate to topography, also tend to produce variances in flavours and textures.
Don’t be hesitant to lean into these regional characteristics in your marketing. People are becoming more savvy about where their wine comes from. Even if they aren’t familiar with your region, you could produce content that shows them why your conditions produce unique characteristics in wines that they’ll love.
It’s also wise to promote your business’ personality in your wine brand identity. If your wine labels are purely based on displaying generic grapes customers are already familiar with, your product may feel a little faceless. Consider highlighting the distinct aspects of your winery or vineyard. Your values can also be a good aspect to focus on, such as maintaining sustainable practices. Artwork can also be an effective way of branding. Commission illustrations or graphic designs that reflect what you want your customers to think about when drinking your wine.
Understand the Regulations of Each Market
Another of the key challenges of producing wine in the EU and distributing to global markets is navigating the complexity of international regulations. Not all markets will have the same standards relating to quality, marketing, and sizing. Even if you’re still shipping within the EU, some states have varying requirements.
If any part of your product fails to meet another country’s standards, this could disrupt your ability to make headway in that market. This means you need to commit to significant research. Perhaps collaborate with a lawyer who has expertise in the regulations in your target regions. You can then adjust your practices in line with these.
Some of the common regulatory elements to focus on include:
- Labelling requirements: Your label doesn’t just help your wine stand out on crowded shelves. It also holds important data. Each geographical region will have standards for what you can and can’t put on your labels. For instance, in some markets, you may not be able to state that your wine comes from a specific appellation unless you have evidence that a defined percentage of your grapes are grown there. If you ship to other EU states, your labels can only carry a claim to being organic if the wine meets specific certification criteria.
- Health and safety: Some markets will have regulations regarding what health and safety information needs to be provided during wine import processes. For instance, when you produce wine within the EU, but ship it to territories outside the bloc, you might need to provide a phytosanitary certificate. This confirms that the plants it was produced from are free from pests and diseases. If you’re shipping to the U.S., there also usually has to be a Surgeon General’s warning on the bottle label surrounding the consumption of alcohol. There are similar requirements when exporting to China and other Asian countries.
- Packaging: Many countries have strict requirements on the packaging of wine being imported for sale. The bottle size is an important one here. This is known as the standard of fill. In the EU, the standard of fill sizes are 100ml, 187ml, 250ml, 375ml, 500ml, 750ml, 1000ml, and 1500ml. This differs slightly from the fill standards in the U.S. You should strive to make sure you’re sending the appropriate sizes to the right countries.
Remember, too, that the regulations for each market may evolve over time. These elements may impact how you package your product or the paperwork you need. They might also require adjustments in your production process. For instance, as climate change becomes more urgent, some countries may eventually require evidence of compliance with sustainability standards. By keeping informed on these topics you can make your adjustments in good time.
Minimize Distribution Costs
Having access to global markets is fantastic. Yet, depending on the destination, actually getting your products to customers can be expensive. Unfortunately, transportation costs can have a significant impact on prices. As fuel costs rise, the difference is often passed onto consumers at the other end. The method of transportation can also affect how expensive transit is. This can make companies feel like they’re walking a tightrope between maintaining profitability and driving customers away with higher prices.
If you’re going to try to achieve a price point that is both profitable and reasonable to consumers, it’s vital to establish ways to minimize costs associated with transportation.
There are a variety of ways to do so:
- Adopt route optimization practices: If you handle your wine distribution personally, it can be wise to use route optimization tools in your logistics. This software uses data analytics processes to identify the most efficient routes from your premises to the destination. This helps to cut down on fuel and maintenance costs.
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- Ship in bulk: Shipping a small amount of wine in a large container isn’t always the most efficient way to go. This effectively raises the price of shipping per bottle. You can mitigate this by shipping in bulk either to larger suppliers or to a central distribution point in your target country that a number of retailers then collect from. Be mindful that different volumes of your products may result in different import tariffs depending on the country.
- Collaborate with other producers: Unless yours is a relatively large company, you may be more likely to distribute small amounts of wine. One way to get around the higher shipping costs associated with this could be to collaborate with other smaller exporters. One approach to this could be to use less-than-truckload (LTL) techniques. This is where many suppliers whose loads wouldn’t fill a truck or shipping container work together to fill the space. This can reduce the costs for everyone.
In the coming years, there are likely to be developments that affect the costs of global shipping. Electric vehicles could reduce fuel costs and 5G technology may optimize real-time route efficiency, among other advances. It’s worth keeping on top of the news of these and discussing them with your supply chain partners. The sooner you can make adjustments, the better the impact is likely to be on your costs.
Conclusion
Cracking the global wine market requires some attention to detail. You’ll need to promote what’s genuinely unique about your product, maintain regulatory compliance, and keep transportation costs minimal. It’s important to remember not to sacrifice your local flavour for your global profile, though. Try to find a balance that keeps your winery a positive presence in your part of the world as well as being an international supplier. This isn’t just about remembering where you come from. It can also help ground your brand in some of the regional characteristics that help make it unique.
About the Author
Indiana Lee is a writer, reader, and jigsaw puzzle enthusiast from the Pacific Northwest. An expert on business operations, leadership, marketing, and lifestyle, you can connect with her on LinkedIn.