Commissioned by ProWein, Geisenheim University polled experts from throughout the world across the entire value chain of the wine industry in late 2022, for the sixth time now. Participants include wine producers from the most important wine-growing countries in the Old and New World, exporters, importers, specialist wine merchants as well as representatives from the food service/hospitality and hotel industries. The Report follows on from ProWein’s unique, regular barometer of public opinion for the international wine industry produced since 2017 and assesses the significance of the challenges facing the industry during the current economic crisis.
“This year again almost 2,500 international experts from 47 countries have shared their insider knowledge,” says Prof. Simone Loose, Head of the Institute for Wine and Beverage Business at Geisenheim University, underlining the special relevance of this global industry barometer. “The industry faces major challenges caused by rising costs and disrupted supply chains. What’s interesting here is that industry leaders are proactively responding to the economic crisis by tapping into new markets with their products and innovatively reacting to traders’ and consumers’ needs.” This includes alternative wine packaging and low or no-alcohol wines.
THE MOST IMPORTANT CHALLENGES
Threats and challenges for the wine industry
Current challenges for the wine industry
Like in the previous year, rising costs and disruptions to supply chains rank top of the list of threats and challenges for the wine industry here. However, the degree to which the industry is affected has clearly increased. In addition, the economic slowdown threatens to reduce wine sales.
Economic situation of producers by origin
Hope for economic recovery fails to materialise
The industry entered 2022 with positive expectations. Producers and traders hoped for a recovery from the negative impact of Covid-19. These hopes were not or only partially fulfilled. In general, the industry is cautious about the future.
Effects of higher energy costs on producers and traders
Effects of the economic crisis on the industry
The global economic upturn after Covid-19 already led to a greater demand for energy and rising energy prices in 2021. With the war in Ukraine and sudden collapse in energy supplies in 2022, prices in many parts of Europe have therefore often more than doubled compared to 2020. Due to their higher energy consumption, producers are significantly more affected by this than wine traders.
Reaction of companies to increasing cost of energy
Companies react to increased energy costs
The majority of companies can still compensate for the higher energy costs and expect reduced but still positive profits. In response to higher energy prices, the majority of companies raise the prices of their products in order to pass on at least part of these higher costs. In doing so, companies are aware that higher prices can lead to consumers’ reticence to buy. The second most common measure adopted by companies is optimising their processes to save energy.
Expected end of supply problems
Transport issues and disruption of supply chains
Almost all producers were affected by transport issues and supply chain disruption. Wine producers managed to successfully cushion the trade from a large proportion of the supply problems. As a result, the wine trade was significantly less affected. From the industry’s perspective, transportation and availability will continue to present a major challenge for their business.
Reaction of companies to the economic crisis
The wine industry reacts proactively to the economic crisis
Companies in the wine industry are taking a range of measures to respond to the economic crisis. Overall, proactive measures to open up new domestic and export markets with innovative products predominate. In these measures, ProWein will play an important role in developing contacts in new export markets, identifying market trends and forging new business contacts.