Economics and market trends guide buyers

A recent study conducted for VinExpo forecasts that by 2010, wine sales will have increased at an annual rate of 2.1 per cent, while sales of spirit will plod along at 1.39 per cent. Those rates may look mundane, but together both markets registered a $277bn turnover in 2005, with wine accounting for $107bn of the sales. However with volume consumption expected to increase at a faster rate, by 4.8 per cent a year over the following five years, one can expect price competition to come into effect, especially for the middle part of the market. Competing for their business are the bigger wine houses such as Castel and E & J Gallo and distillers such as Diageo and Belvedere along with thousands of other sellers hoping to take a chunk of their sales. VinExpo, which opened yesterday, is in fact a buyer's paradise. Here is where the representatives of the big supermarkets can sample from among the 2,400 wine and spirit sellers over the course of the five days. These are the representatives who have millions of euros in their budgets, and they come from all over the world. These are the power brokers, who can make or break a wine house or a distiller. Among them are representatives from Auchan, Carrefour, Tesco, Ahold, Kaufland Warenhandel in Germany and ElCorte in Spain. Lufthansa, Air France, Continental, Cathay and British Airways are among the airlines looking to get a range for economy to premium class. Hotels such as Tokyo Grand Hyatt have also sent their tasters to suss out what to stock their cellars with for the coming years. Delegations from emerging countries, such as India, Russia, Korea and Japan, could also be seen en masse yesterday and today, swilling and spitting with the aplomb of their western counterparts. Sellers are going to have to adjust their pitch to these cultures and drinking habits. Then there are those from the smaller stores and speciality shops, who collectively wield a substantial clout. Every seller is seeking to attract those from the UK, the US and the increasing number of representatives from Japan and other Asian countries. The VinExpo study forecasts that the US will remain the largest market in the world, followed by Italy and France. But among the top 20 wine markets in the world, consumption is dropping in France, Switzerland, Portugal, Argentina, Austria and Spain. Everyone is looking east for the makeup sales. Chinese wine consumption has increased by 22 per cent in the four years to the end of 2005, making it the tenth largest still wine market in the world. Consumption in the Russian federation grew by 37 per cent over the same period, making it the eight largest wine market worldwide by 2010, the VinExpo study forecasts. In the spirits market Asia is currently the world's largest consuming region, accounting for 46.9 per cent of the demand by volume. Russia has helped keep vodka the star among international spirits, followed by the Ukraine and the US. Next in the pecking order at VinExpo are the thousands of professional tasters who work for publishing houses such as Guide de Hachette in France, or for influential magazines such as Decanter. Their mysterious system of ratings and personal taste can determine the raising and lower of sales throughout the year, especially if a producer has just released a new vintage on the market. They all add up to about 45,000 professional visitors VinExpo organisers expect to make an appearance over the course of the week. To help the smaller distillers and wine merchants compete against the big players, organisers have this year given marketers their own space at VinExpo. About 54 agencies from 10 countries are housed across the lake from the main exhibition area, at the Palais des Congrés, connected by a specially constructed floating bridge. Packaging manufacturers have their own display area near by, exhibiting the latest multi-material concoctions with paper, cardboard, wood, plexiglass and tin. One US company is exhibiting a new flexible packaging material for bottles that it claims maintains its strength throughout the distribution process. Tetra Pak is introducing its French Rabbit recyclable packaging for vintage wines. The package is more convenient, lightweight and "environmentally friendly" the company claims, hitting all the trends in the market. The range is already available in the UK, and is about to make its debut on the French market. Companies specialising in software stock management, order tracking, warehousing and transport are part of the products on offer to connect the large dealers and buyers in a logistic network. The recent focus on counterfeit wine and spirits has attracted two companies that are exhibiting traceability technologies to help guarantee authenticity from the producer or distiller to the retailer or customer. This morning France's minister for agriculture, Christine Lagarde will inaugurate the exhibition along with Alain Juppé, the minister for ecology who is also Bordeaux's mayor. If you want to contact Ahmed at VinExpo, please telephone 0617652601.