WSET Canva Questions Flashcards
(23 cards)
What year did USA surpass FR in largest wine consuming country?
2011
Undersupply consequences for high vol, inexpensive branded wine and low vol, premium wine
HIGH VOL, INEXPENSIVE BRANDED WINE:
* customer swith brand/variety
* price increase
* final quality of product compromised
LOW VOL, PREMIUM WINE
* increase exclusivity
* price increase
* wine likely sold on allocation
Govt political and/or legislative factors that impact supply & demand
How much liters of wine does Flexitank, ISO tank and Standard shipping container w/ bottles contain?
Flexitank: 24K
ISO tank: 26K
Standard ship container w/ bottles: 9-10K
in general what types of wine is there an increase demand for globally?
rose
Sparkling wine
low alc wines
largest area under wine in 2019
In order:
Spain
China
France
Italy
USA
Transportation method - most expensive to least
Air
Road
Rail
Sea
Define an estate
Makes wine exclusively from their own vineyards. The entire production process (grape growing to bottling) takes place on site.
Define Growers
Only concentrate on growing grapes to be sold on to winemakers or merchants.
Define Grower Producer
Grow their own grapes and make the wine, but pass the wine on to merchants to mature and bottle.
Define cooperative
Owned by a group of growers and produce and sell wines made from grapes grown by their members.
Describe Custom crush facilities
Sites where growers do not own the facility but pay each time they require a winemaking facility.
Define virtual winemakers
This is a term used, mainly in North America, for winemakers who do not own vineyard land or winemaking facilities. Often buy in grapes or juice and may rent facilities in another winery.
Define conglomerates
Large companies, which have interests in different kinds of alcoholic beverages. Often own many smaller businesses through the supply chain.
Define merchants
Traditionally buy immature wine, mature it and sell it under their own name. Sometimes blend the wines of different producers before bottling
What circumstances have led to the rise of micro-négociants in some regions, and what is their role?
- In some regions (esp Burgundy & Champagne), land is very expensive and rarely available for purchase.
- As a result micro-négociants have been on the rise and they specialise in small production wines and often from only one vineyard or domain.
- A good option for producer that wants to expand their portfolio of wines w/o the added cost of buying the land.
Identify 3 ways merchants may try to protect themselves from price fluctuations and vintage variation.
- SPOT MARKET: buy grapes on spot market from multiple growers & producers when vintages are poor, although this may incur higher prices
- LONG-TERM CONTRACTS: with suppliers to protect against fluctuations in cost; merchant can also provide technical support to suppliers to ensure higher quality fruit
- OWN VINEYARDS: own their own vineyards so wines can be produed at all desired price points. may produce premium wines from their own vineyard and wine from suppliers to sell at lower pricepoint
Identify 5 tactics conglomerates used to control the wider market
- have interests in many different alc products
- own some of the largest wine brands in the world
- the brands cover a range of price points, reaching a wider market
- often own many smaller businesses across the supply chain which can reduce costs, giving a competitive edge over other business types
- can afford to set up regional/national offices, increasing their market presence across the globe.
How does a broker differ from a distributor?
- distributor paid by producer to sell wine on its behalf, while broker are independent intermediaries who represent neither parties
- brokers dont enter into any deals, merely make them happen
- brokers have lower overhead, so charge small fees (usually 2% of contract price, range 1-5% around the world)
Differences btw supermarkets & deep discounters
- Deep discounters sell at lower prices
- Deep discounters rarely stock major brands (due to costs associated with marketing) and often don’t have more than one option from a brand.
- Often deep discounters will buy up the stock of wine from a producer. This means the offerings in the stores will be constantly changing.
- Premium lines are only really introduced around holidays, etc at Deep Discounters.
- Deep discounter retail outlets tend to be more sparse store, with products being displayed in pallets rather than shelves. This saves costs from overheads.
- Deep discounters rarely have price promotions, as costs are already low.
- Although supermarkets and deep discounters have low prices, supermarkets rely on profit margins whereas deep discounters rely on vol of sales.
What are the advantages & disadvantage of producer selling wine directly to retailer in foreign market?
Advantages:
* Option to sell the wines en primeur, which can create a steady cash flow.
* Introducing wines to new markets can create increased sales/interest in their wine
* Having their wine available in different markets spreads the risk if one market is to fail (if wines are only sold in one territory this could be a problem).
* Nointermediary’s costs and margins potentially maxmimzing profits.
* Free to decide which retailers stock their wines.
Disadvantages:
* Paying import duties and taxes will be the responsibility of the producer - which takes time and resource.
* Responsible for making sure packaging & labelling comply w/ relevant laws in the country - takes time, resources, & costs associated w/ potentially producing different labels.
* Time & effort to build relationships in other markets with retailers on an individual basis.
* Cost of visiting different regions, either to visit retailers or for trade fairs.
* Need to be aware of local legislation, customs and consumer preferences.
* Responsible for any wine that is lost or damaged in transit (although the cost of this can be alleviated if using a specialist freight forwarder).
How can employing a distributor help alleviate some of the administrative task for producer
- Distributor will take on the burden of approaching multiple retailers and the administrative work that this involves.
- Distributor can attend trade fairs in the market they’re based and to organise their own trade fair to represent the producers and their wines.
- Local knowledge of a market that a producer from another country is hoping to gain a presence in, is a distinct advantage.
- Local knowledge of the market means more contacts and targeting retailers that would suit the wine they are representing.
- The logistics of transport is generally managed by the distributor which reduces the administrative burden on the producer and they absorb any damage to goods.
- Have knowledge of labelling requirements & taxes to advise the producer.
- Language barrier reduced - becomes less of an issue.
What are the pros and cons for the producer selling through a specialist retailer?
Pros:
* Smaller brands can get better exposure as specialists tend to focus on interesting grape varieties/producers/regions rather than big brands.
* Specialists often cater for consumers more interested in what they’re buying, and are willing to pay more for wine. This means they are likely to get a better margin.
* Producer’s wines will often be hand sold by knowledgeable staff, which helps create brand loyalty.
* There’s the option for producers to showcase their wines at events etc. held by the specialist.
Cons:
* Producers will probably have to employ and pay a distributor to sell their wine to specialists as there are many outlets to target. Trying to do business on an individual basis with all of them would be very time consuming.
* Major producers may not be appropriate for specialists, partially as they don’t require the stock that supermarkets/discounters do, and specialists don’t have the buying power.
