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(Last updated: 5 Sep 2011)
Trends and opportunities
The market
Germany is a large player in the global wine market as indicated by the following:
- In 2010, Germany was the world’s largest importer of wine (14.46 million hl in 2009)
- Imported wine accounts for 78 per cent of wine consumed in Germany (Source: Australian Wine and Brandy Corporation [AWBC] 2009)
- 78.7 per cent of imports are from the three countries France, Italy and Spain
- Australian imports account for 2.6 per cent. (Source: Deutsche Wein Statistik 2010/11)
- Approximately 20.3 million hl wine consumption in Germany in 2010 (Source: Deutsche Wein Statistik 2010/11)
- The per capita consumption of wine in Germany has been generally decreasing steadily over the last years and has now reached a similar consumption as Australia with 20.7 litres (24.6 litres wine and sparkling wine) in 2009 (Source: Wein Markt Faxline 01/2010). As a comparison, per capita consumption of beer has been steadily decreasing and currently amounts to 111 litres
- Consumption remained relatively stable despite the global financial crisis
- In 2009, German households spent €11.1 billion on alcoholic beverages. Within this category, wine and sparkling wine together accounted for 41 per cent of expenditures, followed by beer (29 per cent) and spirits with 25 per cent
- German households tend to favour red wines over white wine. In 2009, 63 per cent of households purchases at retailers consisted of red wine, 29 per cent of white wines and 8 per cent of rosé wines. (Source: Datamonitor 2011)
Generally the German consumer tends to be rather price sensitive and this can also be seen in the wine market. The average price of wine in the retail sector (including discounters) for a 0.75 litre bottle wine was €2.08 in 2009. The average for a German wine (€2.11 per bottle) was slightly higher than the average of an imported wine (€2.06 per bottle) (Source: Weinwirtschaft 5/10 p.16). This underpins the price sensitivity of German consumers and can further be regarded as a market barrier, when compared to other European countries such as the UK (average price per bottle €4.97) or Denmark (€7 per bottle).
Given the low average price per bottle, it therefore comes as no surprise that most of the wines (72 per cent) are distributed via supermarkets and discounters. Currently Aldi sells every fourth wine bottle purchased in Germany. Nine per cent of all wines are distributed via specialised wine retail and over the Internet. The remainder, 19 per cent are bought directly from vineyards (Source: Weinwirtschaft 5/10, p.164). Most wine is consumed at home (Source: Weinwirtschaft 5/10, p.165).
The German sparkling wine industry is enjoying a growing demand. According to information provided by the Verband Deutscher Sektkellereien e.V. (German Association of sparkling wine producers), the market volume for sparkling wine, champagne and other sparkling wines increased by 2.5 per cent in Germany to more than 345 million bottles in 2009 compared to 2007. Consumption of an estimated 3.87 litres per head remained high. Attempts by French, Spanish and Italian wine producers wanting to conquer the German market have yet to be successful – Germans currently prefer drinking local sparkling wine.
New World wines
78.7 per cent of wine imports to Germany still come from old world wine countries such as Italy, Spain and France. The majority of imported wine is red wine (60 per cent), compared to 25 per cent white wine and 7 per cent rosé (Source: Weinwirtschaft, 1/10, p.12).
New World wine imports are led by South Africa with a value of €72 million followed by Chile and USA – Australia ranks fifth after Austria. Looking at the price of EUR per hectolitre (EUR/hl), Australia is clearly leading the New World wine imports by charging on average 134 EUR/hl compared to 101 EUR/hl for South Africa. Despite the significant growth of wine exports in the last decade, Australian wine export has suffered a 37 per cent decline in volume and 21 per cent by value in 2008, reducing the volume to 265 hl, valued at €38.5 million (Source: AWBC 2009).
There are currently approximately 200 Australian wineries represented by more than 45 importers in Germany.
Opportunities
Feedback from the market suggests that there are currently limited opportunities for Australian wineries wanting to enter the German market due to a shift in product and price awareness, consumer behaviour and taste. However, some importers of Australian wines have suggested that there could be a new niche market for Australian market entry wines. Additionally, there may be some interest for up-market wines, but these need to have a unique offering (eg. have won prestigious world-known wine awards, distinct wine label).
Given that Germany is a major wine producing country, opportunities for innovative products/technologies in wine technologies from Australian exporters exists. As an example, the closure material cork is on the decline. According to experts more than 66 per cent of wine bottles will be sold without the traditional closing material (Source: http://wiwo.de). As an example, the Australian wine technology company Zork, which has developed innovative wine and sparkling wine closures is represented in Germany and has received great interest from wineries, retail shops from Germany and from other European countries.
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