Bulk wine

[vc_row full_screen_section_height=”no”][vc_column][vc_column_text]When we talk about wine, we are usually talking about bottled wine.

But this is only half the story: on the other side stands the world of bulk. A sector, that of bulk, which in the past decades has been the backbone of entire wine regions, especially in Southern Italy from where the tanks with wines loaded with alcohol left to strengthen the wines of Northern Italy and those from beyond the Alps, in this case French.

Today things have changed.
Not only has Southern Italy shaken off its image as a bulk producer, but above all the concept of bulk has changed, with the average quality of which is constantly increasing thanks to ever-improving vineyard management and increased technology in the cellar.

Bulk at a global level
The OIV data for 2016 speak of a total of bottled world of 54.9 million hectoliterswhile its bulk it hovers on 40 million hectoliters for a value of approximately 3 billion euros.
Bottled wine recorded a contraction between 2016 and 2015 (from 65% to 54%), confirming the decreasing trend that has been recorded since 2000.
And if the volume decreases (-1.2%) the value increases (+2.2%).
Bulk, which in recent years had instead registered a modest increase, has been in a stagnant situation since 2016 (-3,6% compared to 2015).

The bulk stop
The drop in bulk sales is linked to the surge in popularity of sparkling wines, to a probable increase in quality but above all to the trend of the exchange rate – the main net exporters of wine are in fact European, Chilean and Australian while the major importers are American and English.
Well explains Mark Bacchus in the magazine “The Wine Numbers” :

"with a strong euro and a weak dollar, for example, it is more convenient to pack products in the final markets, and vice versa when the dollar strengthens. So, 2015 and 2016 are two years of strong dollar (1.11 against 1.33 in 2013 and 2014) and this has probably reduced the convenience of choosing to export bulk wines to be packed in the final markets. And the current weakening of the dollar, if it continues, would go in this direction".

Producing countries: the bulk podium by volume
The podium in value is occupied by Spain, Italy and Australia.
In 2016, Spain produced 12.7 million hectoliters, followed at a distance by Italy with its 5.4 million hectoliters and Australia with 4.2 million hectoliters.
Together, the top three players are worth more than half of the bulk produced worldwide (22 million hl out of a total of 41).
Chile comes fourth with 4 million, followed by South Africa with 3 million.

Producing countries: the bulk podium in value
The first three exporters in terms of value are Spain, Italy and France with a value of almost 500, 385 and 300 million euros respectively.
Australia is fourth with 283 million Euros, followed by Chile (274 million Euros) and New Zealand (204), with the latter recording a growth of almost 20% in the last five years. Close behind are the US (197), South Africa (175) and Germany (89) at a considerable distance.

Italy and New Zealand
Italy, with its 5.4 million hectolitres and 385 million euros, after years of contraction, it is recovering positions compared to Spain, with estimates of +7% in value and +9% in volume.
Also attracting attention is New Zealand, which is aggressive also from the point of view of the average price, with 263 euros per hectolitre, thus significantly detaching the second player, namely France which stops at 133 euros per hectolitre. It is followed by the US (111), Italy (72), Australia and Chile tied (68) and far behind is Spain (38).

Major importers
The OIV data for 2016 identify the three largest markets for bulk imports (excluding must): Germany, the UK and the US, with 14.5, 13.5 and 11.2 million hectolitres respectively.
America is the largest importer of bulk in terms of value with 5.6 billion euros, followed by the UK with 3.4 and Germany with 2.4.
The hub of the American bulk market is the state of California, where important intermediary companies are based (Ciatti, Mancuso Wine Brokerage, Turrentine Brokerage are among the largest) and where the potential catchment area is over 4 thousand companies.

The UK case
A long tradition of bottling is also found in Great Britain where establishments such as Accolade Park – bought last year by a Korean investment firm for £62m – handles up to 1200 bottles of wine a minute, for a total of 600 million bottles a year.
In addition to large bottling companies such as Accolade Park, the UK also has numerous supermarket chains that produce their own private labels on a massive scale, such as Asda and Sainsbury's.
The current trend in the UK is however under scrutiny for the possible consequences of Brexit.

The China Case
The country of the Dragon is also gaining ground among importers, where in 2016 imports increased both in terms of bottled (+22%) and bulk, where the volume almost reached +15%, reaching 6.4 million in 2016 (OIV data).
The 2017 data between July and September speak of 56.29 million liters for a value of 47.17 million euros, with an increase of 92.92% in volume and 100.74% in value if compared with the same period in 2016 (WBO data).
This growth can be explained not only by the increase in consumption by the population, but also by the increase in the price of bottles, which makes the option of bulk more attractive for Chinese companies, with which they can achieve higher profit margins.
Today, two-thirds of the wine shipments headed to China come from Chile, with which there are privileged trade relations regarding wine.

The major fairs
There are two major trade fairs worldwide dedicated to loose products.
The first one is held in Europe and is the World Bulk Wine Exhibition, which will be held in Amsterdam on 27-28 November 2018 where negotiations cover over 85% of the global bulk market.
The largest bulk trade fair in the New World is theInternational Bulk Wine and Spirits Show which is held in California, specifically San Francisco, and which will be held this year on July 25-26, 2018.

If Great Britain is a market historically interested in bulk, with bottling plants such as Accolade Park or Treasury Wine Estate, the Chinese market is becoming increasingly interesting:
According to Chinese customs, in the third quarter of 2017, 562.900 hectoliters of bulk wine crossed the Great Wall, corresponding to a value of 47,17 million dollars.
This is (we take these and the following data from recetum.com) double the amount absorbed by China in the same quarter of 2016 in terms of value (+100,7%) and +92,9% in terms of volume.

Spain is currently the leading supplier in this market (524.500 hectoliters of wine in tanks between January and September for a value of approximately 39 million dollars), followed by Chile, Australia, France, South Africa, Italy, the United States, Portugal, Moldova, and Germany.

Global trade in bulk wines has been at a standstill for several years now, with figures fluctuating around 41 million hectolitres and a value of approximately 2.9 billion euros.
This stability is part of a growing trend in global trade, with sparkling wines as the main positive protagonists, but also, to a certain extent, bottled products.
Consequence of the shift of wine consumption increasingly towards quality? Probably yes, although these are not the only reasons (in some cases, the fluctuations of international currencies, on which product purchases are made, also play a decisive role).

On the other hand, the consumption and sales of bulk wine in Italian shops are constantly increasing.
To verify it in the field is Vignantic, the first group of bulk wine shops in Italy.
The brand, created in 2004 by the Venetian manager Richard Fornasier, has spread over the years throughout the country until it achieved the primacy of marketing quality bulk wines.

Bulk wine has always been synonymous with low quality and little certainty, Vignantica has dispelled a false myth and has demonstrated how even bulk wine can represent a certain point of reference for those looking for the genuine product directly from the producer.
The selected wines come exclusively from partnerships with Venetian producers in the Piave river area between Valdobiadene (TV) and S.Donà (VE).

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