San Pedro is launching a new wine brand to support (Glaciares Chilenos) Patagonian Glaciers

 

Chile’s Viña San Pedro is launching a new sustainable, organic wine brand called “South Cause” which will raise money to support Glaciares Chilenos, an NGO that aims to conserve Patagonian glaciers.

San Pedro, which is part of the VSPT group is launching the new wine brand in Europe, North America, and north Asia by the end of the year.

Labeled “South Cause” the new brand comprises four different wines: Cabernet Sauvignon, a red blend, Sauvignon Blanc, and a rosé, all targeted towards millennials and the younger generation of wine drinkers.

Rodrigo Romero, vice-president of global marketing for VSPT, described the new wine label as an “activist brand”, and he states:

“So far most of the things we have done have been in-house. We heard about Glaciares Chilenos and thought maybe we could have a role in this. And what better way to do it than create a new brand that stands for this sentiment. It proves it’s not an after-thought. It’s a range of quality wines that also embrace the cause.”

The wines are certified organic and vegan, will be released in eco-friendly packaging, which is either made from recycled materials or is itself recyclable.

VSPT has recently pledged to reduce the quantity and weight of its bottles and packaging so that 100% are separable, reusable, recyclable or compostable by 2030.

Sales of “South Cause” wines, will be priced between US$12-$15 per bottle, depending on the market, and will directly benefit Glaciares Chilenos.

VSPT has signed an agreement with the NGO which will see it give the organization a set lump sum each year to fund its scientific research and educational campaigns. The NGO will also receive a variable amount of money each year, based on sales of the wine.

Glaciers act as climate regulators, reflecting between 45% and 80% of the sun’s light, helping to cool the earth’s temperature. Glacier-melt causes sea levels to rise, leading to flooding and the loss of land. In the last six years, Chile’s glaciers have decreased by 8%, the equivalent of 1,800 Olympic-sized pools.

Glaciares Chilenos is dedicated to the preservation of Chile’s Patagonian ice fields, which represent 82% of the glaciers found in South America. The issue is particularly pressing given that 70% of the Chilean population is supplied with water originating from mountainous areas and the glacier refill zone.

Young red wine is found to be more beneficial than aged wine, study finds

A recent study of 16 wines from Australia and New Zealand has found levels of healthy antioxidants, existing mainly in red grapes, decreased significantly over time.

CQUniversity lead researcher Mani Naiker said the compound, trans-resveratrol, was proven to have cardiovascular, anti-inflammatory, and anti-diabetic effects.

“The more you consume this compound in your food or in beverages, it is perceived to give you better health benefits,” Dr Naiker said.

“When we compare younger bottled wines with mature red wines, we have proven that as the wine ages the concentration of this important bioactive compound decreases by about 75 percent over a 16-month period.

“That is a huge decrease in the concentration of this particularly important health-benefiting compound.”

Lead researcher Dr. Mani Naiker states that the compound is proven to have cardiovascular, anti-inflammatory, and anti-diabetic effects.

The study published in the Australian Journal of Grape and Wine Research, found the concentration decreased in some wines by as much as 96 percent.

After the initial resveratrol levels were measured, the bottles were resealed and stored in darkness in their original packaging.

“Irrespective to where we got the red wine from, which variety it was, the process of that compound, the loss was the same,” Dr Naiker said.

“I might just leave it with the French paradox that having a glass of red with a meal every day is good for your health.

“Now you know, you might want to go with a young red rather than an old one.”

https://onlinelibrary.wiley.com/doi/abs/10.1111/ajgw.12449

Research from University of Cape Town shows old vines add value

Research from the University of Cape Town shows that using old vine fruit earns winemakers more money.

South Africa has finally discovered – and celebrated – its treasure trove of old vineyards. A country that typically renewed its plantings every 15 to 20 years, pretty much as soon as the yields began to decline, was an unlikely candidate to develop a culture of ancient vines.

Part of the reason for the constant renewal of vineyards lies in the history of the industry. Until the modern era, it existed primarily to supply cheap wine to the domestic market and to provide distilling grapes to the local brandy trade. Accordingly, it was planted to high yielding varieties – or at least to varieties which could be induced to increase their yields if the local market preferred quantity to quality.

There was also another reason for the frequent replacement of vineyards: the widespread incidence of leaf-roll virus. Within a few years of a vine reaching productive maturity, the vine leaves, lacking essential chlorophyll, turn russet long before the vintage. Since the vine is unable to convert sunlight into fruit ripeness, as the season advances it shows signs of stress; acidity declines in the grapes while the sugar levels remain resolutely low. Within a few years the yields drop. By the time a vineyard has reached what should be peak maturity it is economically unviable and must be replaced.

In the pre-modern era of the Cape wine industry roughly a third of the national vineyard was Chenin Blanc (putting South Africa’s share at over 50% of the world’s plantings) followed by Cinsaut. The two varieties accounted for half of all vine grapes in South Africa. With the Mandela presidency in 1994 came an extraordinary worldwide demand for Cape wine. Exports, which in 1992 had totaled a mere 21m liters – roughly 2% of total production – doubled and redoubled every year. At the end of the decade they had grown sevenfold to over 140m liters. In 2008 they crossed the 400m liter mark for the first time.

In this post-Apartheid export boom, vineyards were uprooted simply to meet the expectations of a market that wanted Cabernet and Chardonnay rather than Chenin and Cinsaut.

Rescue Plan

A number of initiatives were undertaken to save focus varieties, of which the most important was a campaign launched in the early 1990s to preserve the country’s Chenin heritage. Happily, Chenin is less susceptible to leaf-roll, so there were many older vineyards yielding reasonable quantities of often fabulous fruit. There was less success with Cinsaut: many of the older plantings fell victim to the simple demands of the international supermarket trade and were replaced with Merlot and Shiraz.

In the early 2000s Rosa Kruger, a viticulturist with a passion for the country’s viticultural heritage, began to research and create a record of the country’s oldest vines. Unsurprisingly, most were Chenin, though Grenache, Pinotage (a local crossing of Cinsaut and Pinot Noir), Semillon and Cinsaut were also present in more reduced amounts. At much the same time Eben Sadie, a producer who enjoyed a singular reputation for hand-crafted artisanal wines, began marketing some of these single-site rarities. His lead was followed by many of the younger, and more adventurous, winemakers. Suddenly, for the first time, it seemed as if it could be profitable to farm low yielding ancient vines.

At this point Johann Rupert, whose family had started one of the country’s major liquor companies and had then gone on to create Richemont (whose brands include Dunhill, Cartier and Mont Blanc), provided the seed capital to launch what is now known as the Old Vine Project. Making use of Rosa Kruger’s catalogue of the old vines, it identified just over 3,800ha of heritage vineyards, and then persuaded the authorities to certify wines produced exclusively from them.

In 2019 the University of Cape Town’s Graduate School of Business conducted research into the value that old vines bring to the selling price of the wines: its primary objective was to determine whether, given the inevitably lower yields associated with older vineyards, it was actually viable (from an economic rather than a sentimental perspective) to keep them in the ground.

Price Advantage

The research was able to quantify the retail price advantage of old vine fruit: all other factors being equal, it added R100 ($5.70) per bottle to the final product. Given that most wines sold from these varietals retail for less than R200, the connection to an old vineyard was significant – at this stage an estimated 30% to 50%. Typically, the fruit cost of a bottle of wine comprises a low percentage of the final selling price. Stellenbosch grape prices average less than R12000 per ton, or R20 per liter. Dry goods, oaking and processing cost would take this to R50. These are largely constant, unless a producer opts to use a high percentage of new wood. Doubling the fruit price only raises the input costs by 40%. If certified old vines add R100 to the price of a bottle of wine, this potentially means that grape prices could increase from R12000 to somewhere close to R60000.

This amount of upward price mobility is vast in the South Africa context: it more than compensates for the lower yields. Johann Rupert’s investment in the Old Vine Project has proved, beyond doubt, that well-sited virus-free older vines are worth nursing to the magical age of 35 years – at which point they acquire the Certified Heritage Vineyard seal. It may seem strange that the country’s most famous luxury goods mogul’s true legacy – at least in the world of wine – will rest on an act of generosity aimed at saving a dwindling number of old vines. But it is also apt. It is the combination of quality and rarity which ensures that there’s nothing artificial about the premium: on reflection, that has always been the unique selling proposition of the luxury goods business.

Source:  Wine Business International

Pau Roca, Director General of OIV gives his overview of the 2019 global wine sector and the impact of Covid-19

Speaking from the OIV’s [International Organisation of Vine and Wine] headquarters in Paris, by web conference to over 3,000 international wine journalists, and trade, Director-General Pau Roca presented today [April 23, 2020] details of the 2019 wine production, consumption, and international trade. The impact of Covid-19 in the sector was also highlighted.

Here are the important facts and highlights of today’s Conference:

  • The surface area of the world vineyard is estimated at 7.4 mha, which has been stable since 2016;
  • World wine production is estimated at 260 mhl, a marked decrease, compared to 2018 historically high;
  • World wine consumption is estimated at 244 mhl, marking a +0.1% with respect to the previous year;
  • The world wine export market has expanded both in volume, estimated at 105.8 mhl (+1.7%), and in value with 31.8 bn EUR (+0.9%);
  • 2020 Harvest – first estimates of wine production in the Southern Hemisphere indicate low expected volumes for 2020 (with the exception of South Africa and Uruguay).

Vineyard area stabilization

In 2019 the world area under vines, corresponding to the total surface area planted with vines for all purposes, including young vines not yet in production, is estimated 7.4 mha.

Starting with the Northern Hemisphere, overall stability can be observed in the European Union (EU) vineyards, which stands for the fifth consecutive year at 3.2 mha.

Within the EU, the latest available data for 2019 indicates an increase in the area under vines in France (794 kha), Italy (708 kha), Portugal (195 kha), and Bulgaria (67 kha). The vineyard surface area in Spain (966 kha), Hungary (69 kha) and Austria (48 kha), on the other hand, slightly decreased from 2018.

In East Asia, after over 10 years of significant expansion, the growth of Chinese vineyard (855 kha), second in the world by surface area just behind Spain, seems to be slowing down.

In the United States, the vineyard has been consistently decreasing since 2014, and its estimated surface area in 2019 is 408 kha.

In South America, developments in vineyard surface area between 2018 and 2019 showed a downward trend for the fourth year in a row.

The only exception in the continent is represented by Peru that increased by 7.1 kha (+17% / 2018) its vineyard surface area reaching 48 kha.

South Africa’s vineyard surface area remained stable with respect to 2018, at 128 kha.

Australia the area under vines remained stable at 146 kha in 2019; while New Zealand the surface area grew by 1.6 % reaching a record-high of 39 kha.

Production back to the average

World wine production, excluding juices and musts, in 2019 is estimated at 260 (259,0) mhl, marking a sharp decrease of 35 mhl (-11.5%) with respect to the exceptionally high volume recorded in 2018. Overall, after two consecutive years that can be defined as extremely volatile, 2019 brings global wine production back to average levels.

Italy  (47.5  mhl), France (42.1 mhl), and Spain (33.5  mhl), which together account for 48% of world wine production in 2019, saw a sharp decrease in their wine production with respect to 2018.

Other EU countries that registered a decrease in production with respect to 2018 are Germany (9.0 mhl, -12%), Romania (5.0 mhl, -4%), Austria (2.5 mhl, -10%), Hungary (2.4 mhl, -34%) and Greece (1.9 mhl, -8%). The only EU country that, in 2019, saw an increase in its wine production is Portugal with 6.7 mhl (+10% / 2018).

In Eastern Europe, weather conditions were favourable in Russia (4.6 mhl, +7% / 2018) and Ukraine (2.1 mhl, +6% / 2018), while in Moldova the harvest was less abundant in 2019 and the vinified production was equal to 1.5 mhl (-23% / 2018).

In Asia, the new data available for China indicate an estimated vinified production of 8.3 mhl in 2019, marking a decrease of -10% with respect to the already relatively low production level of 2018.

In North America, wine production in the USA is estimated at 24.3 mhl, a decrease of 2% compared to 2018. This slight decline in 2019 does not depend on bad weather conditions or the raging fires that occurred in California (harvest was just before), but it is a response to overcome an oversupply of grapes and wine.

In South America, the overall trend for wine production in 2019 is negative with respect to 2018. However, while in Argentina (13.0 mhl) and in Chile (12.0 mhl) 2019 vinified productions are lower with respect to 2018 but overall in line or even higher than their five-year averages, Brazil (2.0 mhl) registered a sharp decrease in its wine production in 2019 of more than 1 mhl (-34% / 2018).

In South Africa, 2019 production reached 9.7 mhl. This represents an increase of +3% with respect to the low volume registered in 2018, but it is still far from the average production levels recorded before the beginning of the drought that heavily impacted the country for three years in a row (2016, 2017 and 2018).

With regard to Oceania, Australian wine production registers a decline for the second consecutive year reaching 12.0 mhl in 2019 (-6% / 2018). In New Zealand wine production was 3.0 mhl in 2019, a slight decrease of -1% with respect to 2018.

Expansion of the international trade of wine

In 2019 the world wine export market – considered here as the sum of the exports of all countries – has expanded with respect to 2018 both in volume, estimated at 105.8 mhl (+1.7%), and in value, with 31.8 bn EUR2 (+0.9%).

Strong increases can be observed in exports from Italy (+2.0 mhl), Spain (+1.3 mhl), Canada (+0.4 mhl) and Chile (+0.3 mhl). However, significant reductions in exports are recorded for Australia (-1.1 mhl), South Africa (-1.0 mhl), Ukraine (-0.4 mhl) and Hungary (-0.3 mhl).

In 2019 the global value of wine exports is on the sustained growth path started in 2010 reaching a new record high. France was still the most important world exporter in terms of value, with 9.8 bn EUR exported in 2019. There were rises in the value of exports in many large exporting countries like France (+425 m EUR), Italy (+211 m EUR), and New Zealand (+84 m EUR). The largest declines include Spain (-234 m EUR) and South Africa (-73 m EUR).

In 2019 the international trade of wine in terms of volume was mainly dominated by three European countries – Italy, Spain, and France – that together exported 57.1 mhl, accounting for 54% of the world market.

In 2019 the top three importers in terms of volumes were Germany, the UK, and the USA, which together imported 40.4 mhl, reaching 38% of world total. These three countries represent 39% of the total value of world wine imports, reaching 11.9 bn EUR.

The first importer in 2019 is still Germany with 14.6 mhl, even if its wine import volume decreases by 0.6% compared to 2018.

China for the second consecutive year saw a significant decline in its imported volumes (-11% / 2018), reaching 6.1 mhl in 2019. In terms of value, the trend is similar, with an overall downfall of -9.7% compared to 2018, reaching 2.1 bn EUR. The only category that increased both its volume (+8%) and its value (+8%) is sparkling wine, although it represents only 2% of the total imported volume.

Early estimates of the 2020 harvest in the Southern Hemisphere

First estimates of wine production in the Southern Hemisphere indicate low expected volumes for 2020 for the majority of countries, with the exception of South Africa and Uruguay.

In 2020 a decline in production volumes in all South American countries, with the exception of Uruguay, are expected. In Argentina estimated production is 11.6 mhl (-11%), in Chile 10.5 mhl (-12%) and in Brazil 2.0 mhl (-1%), while in Uruguay 0.65 mhl (+11%).

South Africa seems to continue its recovery path from the drought and expects +5% with respect to last year, reaching 10.2 mhl.

In Oceania, Australia expects a lower production level in 2020 estimated at 11.5 mhl (-4%) due to drought and bushfires while in New Zealand (2.9 mhl, -2%) expectations on wine production are by and large in line with 2019, or just below.

These are preliminary estimates and should be interpreted with caution,  given the current exceptional circumstances.

Impact of Covid-19 in the wine sector

At this early stage the information and statistical data available are insufficient to provide an accurate forecast and anticipate the scenario of the vitivinicultural sector in the future. However, due to communication with OIV members (“Member States”), the OIV has certain qualitative information at its disposal.

The feedback given by the Member States reflects a radical change or transfer between distribution channels. The expected overall balance is a decrease in consumption, a reduction in average prices, and therefore an overall decrease in total sales value, turnover, margins and finally profits of the wineries.

As far as exports are concerned, economies in recession are not a promising market to develop, and during this pandemic, the largest consuming countries have been the most affected. Trade flows may recover along with the economy, but some permanent changes could occur.

Alcohol consumption is also being debated. Messages on the positive effects of wine consumption are totally unacceptable and irresponsible.

The same applies to the issuing, under these circumstances, of general statements or biased messages that are the result of ideological concerns about wine consumption, such as abstention.

The OIV’s work follows the Strategic Plan approved by the General Assembly in October 2019 and covers a 5-year period until 2024. In the current context, the objectives and goals of the OIV go hand in hand with the needs that this crisis has highlighted.

The OIV is the intergovernmental organization of scientific and technical nature of recognized competence for its work concerning vines, wine, wine-based beverages, and other vine-based products. It is composed of 47 Member States. In the framework of its competence, the objectives of the OIV are as follows:

  • to inform its members of measures whereby the concerns of producers, consumers and other players in the vine and wine products sector may be taken into consideration;
  • to assist other international organizations, both intergovernmental and non-governmental, especially those that carry out standardization activities; and
  • to contribute to international harmonization of existing practices and standards and, as necessary, to the preparation of new international standards in order to improve the conditions for producing and marketing vine and wine products, and to help ensure that the interests of consumers are taken into account.

Wine in a can is a robust trend and not a short-term fad

With the traditional wine market in the US growing at an increasingly slow pace, successful wineries 10 years from now will be those that have adapted to a different consumer with different values.  Wine in a can is no new thing; it was first seen in World War 1 when the French army had their wine rations delivered this way.

WICresearch.com has done an in-depth study of the drivers that are affecting the boom in the wine-in-can market and it is predicted that the trend will continue to grow as it has done exponentially in its infancy.  The most important factors to consumers when it comes to wine-in-can are taste, quality and value, followed by convenience, portability and fun.  From 2017-2108 the wine-in-can market grew by 43%.  It is a market that cannot be ignored as the industry needs new growth places.

There are 6 main drivers that are promoting the expansion of wine-in-can, as follows:

Convenience

This is the most obvious benefit and relates to the carrying, opening and finishing of the product.  One is able take a can where it is illegal or inconvenient to bring a bottle or any glass.  The single-serve size also allows for zero waste of the contents, and it removes the need for traditional wine paraphernalia: foil cutters, corks screws. Under the convenience banner, the wine vending machine is also a trend that is starting to gain traction, certainly opening new markets in terms of novelty and availability.

Occasion expansion

This is based on both location and event. Location involves places where taking a bottle of wine is not suitable nor practical: boats, beach, swimming pools.  Event expansion is where offering a single-serve beverage is desirable e.g.BBQ, picnic.

It is interesting that wine-in-can drivers such as these are not cannibalizing the existing market with its meagre growth of 1-4% but it is rather creating an extension of markets or even new markets and thus creating strong double-digit growth.

Sustainability and cost savings

Aluminum is 100% recyclable and so the environmental footprint is greatly reduced, and the product attracts an eco-friendly consumer who values sustainability.  Research has shown that 51% of Millennials check the packaging before purchase for sustainability claims.

 Facts:

  • Sustainable products grew 4x the rate of non-sustainable products (Nielsen)
  •  Consumers are willing to pay 15% more for sustainable packaging (McKinsey)
  • 66% of consumers will pay more for sustainable brands (Nielsen)

Packaging in aluminum cans also produces a saving of 15-20% with some manufacturers suggesting 40% due to efficiency of packing and transport, lack of breakage, and lighter weight.  Therefore, carbon emissions for transportation are also lower. Also, savings occur in establishments serving wine by the glass, as there is total accuracy over the serving size with no shrinkage.

Portion control and variety

Apart from the benefit of not having to open a whole bottle when you would like to enjoy a glass, there is also no issue of dealing with unfinished wine.  The wine-in-can movement is very popular with restaurants that have less waste and leftover wine, or the problem of customers wanting to cork their bottle to take it home which is illegal in many parts of the world.

Due to the small serving, wine drinkers can enjoy different varieties of wine with different courses, instead of a full bottle of the same wine.

Visual image and branding

An aluminum can has a 360-degree label rather than just a front and a back.  It gives the product a cooler, more photographable, Instagrammable look.

“With 64% of consumers trying a new [wine] product simply because the package catches their eye, packaging design is one of the most underappreciated marketing levers” (Freeman, 2016).

Designers can go so far as to make the packaging glow in the dark.

Quality

“You actually have a really stable environment in a can…There’s no UV penetration or oxygen exchange like there would be through a cork and glass bottle” (Drinks News, 2018).

For still and sparkling wine, the integrity of the product can easily be preserved.  The dark, oxygen-free environment for still wine is ideal while for sparkling, the effervescence is contained in a small space.

There is ongoing research for different types of cans, linings and filling systems to ensure further integrity of the product as well as preserving its future life which is, as yet, unproven.

It is interesting to note that the wine-in-can purchase is not affected by gender, education nor generational group.  There is also no difference in self-reported wine knowledge i.e. consumers with a high level of wine knowledge are just as likely to buy wine in cans.

In a 2019 a blind taste test of wine-in-can versus wine-in-bottle was conducted. The identical wine from the same winery in both packaging formats was poured.  There were 4 different varietals and the experiment was done in 2 different locations.  51.1% said they either preferred the wine-in-can or that they could tell no difference between the two.

Wine-in-can is a growing market and innovation and interesting marketing tools are emerging every day.  It will be a very interesting space to watch over the next decade.

WICresearch.com

Jenny Ratcliffe-Wright
Cape Wine Master