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the german wine market: well prepared for the casting show?


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di Werner Engelhard, Chefredakteur WEIN+MARKT
Evento organizzato da DuPont: International Wine Grape Symposium.
Lazise, 6 aprile 2011

Published in: Business
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the german wine market: well prepared for the casting show?

  1. 1. the german wine market:well prepared for thecasting show?Werner EngelhardChefredakteur WEIN+MARKT
  2. 2. 2:5Inter Mailand - Schalke 04
  3. 3. frame conditions – key figures ca. 82 Mio. inhabitants (huge potential) 24,3 l per capita consumption wine and sparkling wine ca. 20 Mio. hl market volume wine and sparkling wine ca. 9% of world wide wine and sparkling wine consumption Germany is like your little finger: not necessary to survive, but very useful to work successfully and efficiently especially because the situation in other important wine importing countries like UK, USA or Russia is no longer as profitable and funny as it used to be and emerging markets in Asia or South America are not that easy to conquer, as well.
  4. 4. Nr. 1 import market (volume):very attractive, but very aggressive 14,64 Mio. hl import volume (+1,2%) 2,08 Mrd. Euro import value (+2,9%) 1,42 Euro/l average import price(source: Deutscher Weinbauverband)
  5. 5. german “Trinkweinbilanz” 2009/2010:quite solid and stable, but saturatedduring worldwide economic crisis, german wine market was shrinking by only2,7%.and it was recovering quite fast in 2009/2010. Volume increased by 1,8% andalmost reached the former level.this shows: the german market is quite solid and stable, even in times of crisis.if you believe in what market researchers and economic analysts say, there willbe 7 fat years for german economy.- german economy was growing in 2010 by 3,6% (BIP)- according to the forecasts, analysts expect a further increase in 2011 of 2,3%- the export business of german companies is booming- the number of unemployed people is shrinking (ca. 3,3 Mio.)- and the consumer sentiment is improving--- all this can benefit the wine businessbut the long-term comparison of the Trinkweinbilanz reveals as well, that there isno real growth on the german wine market, as well.the market is absolutely saturated.--- growth is possible but it is mainly growth by displacement of others
  6. 6. displacement works like this ... Netto Promotion 2010/2011
  7. 7. or like that ... Lidl Promotion Jan. 2011
  8. 8. even in mailorder business ... Hawesko Promotion Jan. 2011
  9. 9. 12 bottles of wine+ 6 specialties+ 12 plates/crockeryGiordanoNov. 2010
  10. 10. displacement indistribution channels
  11. 11. huge price aggressivenessentry consumer prices for basic articles in german off-trade*Bordeaux AC/AOP 1,99Chianti DOC 1,99/2,49Gran Reserva 2,99Chardonnay New World 1,99Prosecco Frizzante 1,99German Riesling (l) 2,59Champagne 11,99* March 2011
  12. 12. the other side of the medal: premium offense Aldi and Lidl x-mas 2010
  13. 13. discount shops: 4 ways to grow1. increase of outlets2. number of articles3. frequency of promotions4. increase of margins… new chances to get in and good times for trading up conceptions(even if you don‘t get a standard listing)
  14. 14. problemsmore than 100.000 winesno demand for any additional wineall claims are occupiedconcentration process: big players become stronger and stronger- for example takeover of Plus by Netto (Edeka) and Penny (Rewe)- takeover of Trinkgut by Edeka Rhein-Ruhrless players = less opportunities for listings
  15. 15. problemsconcentration process in buying-for example Rewe Für Sie(better conditions mean lower margins for suppliers)concentration process among distributors-for example Bremen (Eggers & Franke Gruppe)maximum of 50-70 efficient distributors left(for thousands of producers)again: all claims are occupied!there‘s no need for any additional supplier
  16. 16. distributors define key suppliers/brandspressure on prices, margins and conditions forces distributors todefine key suppliers/key brands on which they focus theirmarket investment/supportfor your success it‘s extremely important to be among the keysuppliers; it doesn‘t help you to be nr. 21 in the portfoliothe way to the wine cellar of german consumers leads throughdistributors and buyers in the on- and off-tradeproducer --- distributor --- buyer on-/off-trade --- consumeran efficient distributor is an important key to success
  17. 17. wine selling in Germanyis like a casting show !
  18. 18. what can you offer to the jury?better prices?better qualities?better price-quality-relationship?better service?better margins?better concepts?better story (emotions)?better certificates?better support in terms of manpower?better support in terms of promotion budgets?what else?if you want to be successful, you have to be well prepared!
  19. 19. but what kind of wine concepts does thegerman market need?don‘t ask me, ask your distribution partner(psychological aspect)listen to your customersand develop a strategy together
  20. 20. the basic lessons of your homeworkfirst step: analysis - what can I offer to the german market?what‘s my USP?where is my market gap, my market niche?who are my main competitors?what can I do better than they can?how big are my capacities?which distribution channels can I supply in Germany?who are the relevant distributors for these distribution channels?is there a gap in their portfolio, I can fill?or do I have to kick out a competitor?what makes more sense? one general importer for all my brands, differentimporters for my different brands or several regional distributors?how much do I have to spend for listing fees?
  21. 21. the show must go on ...being listed in the portfolio of a distributor or a trade partner is onlythe first‘s no reason to lean back and relax – as the show must go ontogether with your distribution partner(s) ...define marketable wines (marketable qualities, outfits and prices)define realistic sales volumesbased on this develop a sales and marketing planincluding a budget for advertising, promotions at the POS,personal presence at presentations, fairs, events, visits of importanttrade partners and, and, and ...
  22. 22. showing your flag is absolutely necessary ...
  23. 23. ... or you‘ll get lost in the jungle
  24. 24. Metro Weinhumidor, Düsseldorf
  25. 25. Metro Weinhumidor, Düsseldorf
  26. 26. Metro Weinhumidor, Düsseldorf
  27. 27. Fegro/Selgros„Gastromarkt“,Neu-Isenburg
  28. 28. Fegro/Selgros„Gastromarkt“,Neu-Isenburg
  29. 29. TV CampaignEdeka
  30. 30. TV CampaignEdeka
  31. 31. flagship storeof Edeka SüdwestScheck-In,Frankfurt/Main
  32. 32. flagship storeof Edeka SüdwestScheck-In,Frankfurt/Main
  33. 33. flagship storeof Edeka SüdwestScheck-In,Frankfurt/Main
  34. 34. flagship storeof Edeka SüdwestScheck-In,Frankfurt/Main
  35. 35. Rewe Aupperle,Fellbach bei Stuttgart
  36. 36. Rewe Aupperle,Fellbach bei Stuttgart
  37. 37. Rewe Aupperle,Fellbach bei Stuttgart
  38. 38. Rewe Aupperle,Fellbach bei Stuttgart
  39. 39. Rewe Aupperle,Fellbach bei Stuttgart
  40. 40. Rewe Aupperle,Fellbach bei Stuttgart
  41. 41. Wasgau Center,Annweiler
  42. 42. Wasgau Center,Annweiler
  43. 43. Wasgau Center,Annweiler
  44. 44. Wasgau Center,Annweiler
  45. 45. Wasgau Center,Annweiler
  46. 46. Torsten Toeller,CEO trinkgut
  47. 47. trinkgut: Nr. 1 GFM chainmore than 500 Mio. Euro,more than 300 shops
  48. 48. Getränkemarkt Freyer,Leingarten
  49. 49. Getränkemarkt Freyer,Leingarten
  50. 50. Getränkemarkt Freyer,Leingarten
  51. 51. Getränkemarkt Freyer,Leingarten
  52. 52. Getränkemarkt Freyer,Leingarten
  53. 53. Getränkemarkt Freyer,Leingarten
  54. 54. good success andthanks for your attention.