Germane and to the point

The first World Wine & Spirits Plenum, took place in Dusseldorf last month. Here are some of the highlights

THE DAY before ProWein, one of Europe’s largest wine shows, an audience comprising buyers, press and drinks industry professionals from all over Europe gathered together to hear an impressive line-up of international speakers from the wine, spirits and financial worlds.

The event, developed by Rüdiger Ruoss in conjunction with the German trade magazine Wein & Markt, was staged with a specific focus – to discuss the future of the drinks industry in key European markets.

First to speak were Arend Heijbroek of Rabobank and Wilhelm Lerner of Arthur D Little who took a brief but incisive look at the key drivers that would shape the future of the wine industry in particular.

Heijbroek outlined these as being "increased demand in a changing and saturated market, the oversupply of premium wine, and changes in the structure of the industry in line with the economy and distribution." 

He added, "Retail power will be one of the most important drivers in the future, which begs the question will the discount retailers be leading the format or will the future favour the service retailers? Will we be dominated by the Ahold or the Tesco model?"

The response of the branded sector, he predicted, would be vital in this battle. Wilhelm Lerner agreed, suggesting, "Brands will be crucial in bringing de-complexity to the sector, driving the inevitable reduction in diversity and reduction in the number of products available."

Next up, Klaus Richter of Creative Enterprises hit the question of the multiple retailer becoming the "discounter" head on.  "Retailers are no longer the discounters but the brand owners," he argued.

"The likes of Aldi and Lidl give orientation to the consumer who only says ‘I am confused’ when they approach the wine aisles.  In my opinion, the big opportunity out there is to establish one, two or three big brands, working hand in hand with the multiples to dictate fashion to the consumer and limit the offer to suit their knowledge and expectation."

The afternoon of the event was taken up with a UK-dominated panel, with John Phillips of Beringer Blass taking a look at wine business models under the title "Size versus quality – what really matters?" He admitted that while a large company can have the benefits of "marketing, consumer research and investment, most smaller companies have the speed and flexibility to be more responsive in terms of organisation and communication."

David Cox, Brown Forman Europe, followed by taking an in-depth look at the trends in wine retailing in the German market over recent years, posing the question "Imported wine in Germany – success or dilemma?" He stated that, "Germany has now fallen to the lowest level as a market for potential investment because of the retail landscape, the dominance of retail prices and the perception of the German consumer.

How can a market that makes some of the finest wines in the world sell some of the world’s poorest?" he asked of the audience.  "What we need in Germany is a culture change in the buying departments, more of a focus on premium wines and a significant change in the fixture layout, merchandising and promotion. But who will take the lead?"  It’s fair to say that the mainly German audience was reticent in giving any kind of real response.

The afternoon continued with Allan Cheesman, of Sainsbury’s, and Russell Burgess, ex-Thresher and Asda, giving insights into the workings of the UK market from a retailer perspective, and Hew Dalrymple of Waverley taking a look at wine consumer demographics and the core groups identified by his company’s Face Value research.

The day ended with a bit of crystal-ball gazing as Mattias Horx, futurologist, delved into trend development in the drinks market over the next 15 years. He felt that one of the ubiquitous "mega trends" over the next 25 years would be that of "GloCalisation", which involves "highlighting the link between the local relationship with the consumer and allying it to their global knowledge".

He also predicted that "Asia certainly would be the future market in terms of cultural trends.  The advent of phenomena such as Pokemon, Reiki, Feng Shui, Asian eating habits and cross-cultural fertilisation has seen fashion turning away from aspiring to the American."

Other "sociographic megatrends" he identified were the phenomenon of an ageing population, the rise of women, individualisation and health issues.  That might sound like a few made-up words but there was some food for thought.

All in all, it was an interesting and insightful programme of seminars covering some of the major issues affecting our industry today.  So for anyone out there who might think Prowein is not worth visiting, you might want to think again.