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Bourgogne Wine Sales: Prices buoyant, awaiting the return of greater volumes

27/11/2015

The 2014 vintage provided generous yields with good quality, and is now the core of activity in the advance trade market. Bulk sales from estates are up on the strength of this; 94% of volumes sold came from the 2014 harvest.
Available stocks held by producers are nonetheless still down on the average of the last five campaigns, and on the 10-year average. It is the third consecutive year of deficit, and this is having an impact on markets, although export figures have been very encouraging in some of the major markets.


The signs of the return to growth seen in the United States, Japan and Hong Kong since the start of the year could be confirmed when the 2014 vintage is fully on the market, and with the arrival of this year’s vintage, which is of very high quality.
In France, results are more mixed, with a lower presence in the supermarket sector and on the restaurant circuit. The specialist wine store market held firm, with 40% reporting stability in Bourgogne wines sales in 2014, and 33% reporting an increase.

Professionals in the Bourgogne wine sector nonetheless remain prudent. After two harvests with volumes closer to normal – 2014 produced 1.58 million hectoliters and 2015 is likely to come in at around 1.5 million – the Bourgogne wine region should gradually regain the market share it has lost through lack of stock.

Export: Tending towards recovery in the main markets


Bourgogne wines are enjoying a boom, since the region enjoys a good image, which has been further enhanced with the inclusion of the Climats of the Bourgogne wine region being added to UNESCO’s World Heritage List on 4 July 2015. While exports remained slightly down over the first nine months of 2015 (down 3.4% by volume) due to the lack of wine, demand has picked up in several countries. This is being driven by the highly anticipated 2014 vintage, which is starting to come onto the market.

Other factors have had a positive influence on sales of Bourgogne wines: a euro/dollar exchange rate that is favorable for exports; low stock levels among importers-distributors; and the permanent presence of Bourgogne wine representatives in international markets.

In parallel, revenues have continued to grow, with an increase of 25.3 million euros (up 4.8%) over the first nine months of 2015 (to 549.4 million euros).
Some 53% of this revenue came from Bourgogne white wines, 43% from red wines, and 4% from Crémant de Bourgogne.

Three of the main markets (USA, Japan, Canada), along with Hong Kong all posted strong performance for the first nine months of 2015. The United Kingdom, which used to be the leading market for Bourgogne wines, fell back. In a little over three years, sales of Bourgogne wines there went from 20 million bottles exported in 2011, to 14 million in 2014, meaning the UK lost its long-held place as the leading export market, being supplanted by the United States.

Exports of Bourgogne wines also suffered in other European markets, especially Germany, Belgium and Switzerland (down 19.6% by volume over the first nine months of 2015, with total revenue down 15.7%). These three countries saw their overall wine imports shrink (down 5% by volume over the first seven months of 2015). Revenue from these territories dipped by 21% over the same period, with sales there concentrated on entry-level wines. German and Swiss consumers tend to opt for home-produced wines in the premium segments, whereas Belgian wine-buyers are putting store brands ahead of producer brands, a sign of the growing influence of hard discount stores.

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