Academic journal article Business Economics

The Evolving Global Wine Market

Academic journal article Business Economics

The Evolving Global Wine Market

Article excerpt

Fifty years ago, a few countries in Western Europe accounted for virtually all world exports of wine and most of its production and consumption. This has changed dramatically: now every continent has major producing and/or consuming countries. MU Ch of this chane has been driven by technology and science, resulting in increasing quality, bringing new countries into the ranks ofglobal winemakers, and increasing the productivity of traditional countries. Much of it has also been driven by economics, in particular the rising income and changing tastes of consumers throughout the world, and by public policy that has created surpluses in Europe. This paper shows the magnitudes of the shifts in consumption and production and discusses the economic and social factors. that drive them.

Business Economics (2014).49, 46-58.

doi:10.1057/be.2014.3

Keywords: wine consumption, wine production, wine sutplus, viticulture, enology. wine surplus

Much of the cultural and economic evolution of the post-World War II world is reflected in the evolution of the global wine market.

Fifty years ago the traditional wine-producing countries, except Argentina, were all led by Spain. Italy, and France. The United Kingdom was the largest wine-consuming market. Today, Spain remains the global leader in vineyard acreage. but China grows the most grapes and continues to expand.

The United States is the now world's largest wine-consuming market. with China rising quickly.

Wine consumption in Europe has fallen steeply, but production has fallen far more slowly, allowing for the vast surpluses that became known as Europe's "wine lake." Europe's need to dispose of these surpluses along with the emergence of new producers and new consumers in new regions has re-shaped the global wine market.

Europe's need to dispose of these surpluses and the emergence of new producers and new consumers in new regions has re-shaped the global wine market.

1. The Quality Revolution in Wine

The quality revolution in wine that has now spread across the world began in 1944 with the publication by Maynard Amerine and Albert Winkler, professors at the University of California, Davis, of their landmark Composition and Quality of Musts and Wines of California Grapes. This work initiated a rigorous approach to wine growing based on varietal selection, climate, and geographical location.

UC Davis' research integrated science (chemistry. genetics, microbiology, chemical engineering, plant physiology, and biochemistry) with sensory analysis. wine production, horticulture, and traditional agriculture. It became the global model for viticulture and enology research and training, generating constant improvements in practices and products.

The very phrase "wine growing---combining grape growing and wine making into one concept--symbolized these new practices, now practiced in every continent except Antarctica.

Advanced research and experimentation enabled grape growers to select the most appropriate grape varieties for individual regions and vineyards and develop improved growing practices. including trellising and vine management. pruning, and harvesting. Research and training in enology--winemaking--introduced better techniques for crushing, fermentation, blending, bottling, and aging of wines. New materials were introduced; and traditional materials and equipment have been consistently upgraded, even to the point of ensuring that the most traditional of wine materials--the cork from ancient Portuguese forests--is now repeatedly quality tested with modern equipment.

Better science and skills also opened the path to more consistently good quality wine, less dependent on annual vintage conditions, and an expanded focus on varietal wines and production at a wider range of price points. Today there is little "bad"--as in poorly made or spoiled--wine produced almost anywhere, although the range of quality may vary widely. …

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