An overview of the impact of change on the global wine industry

De Villiers, Gerrit (2000-03)

Thesis (MBA)--Stellenbosch University, 2000.

Thesis

ENGLISH ABSTRACT: This mini-study project was undertaken to investigate the dynamics of the international wine industry in an era of increased globalisation. The capacity of old and new wine producing countries to adapt to the new dynamics was assessed by determining their competitive positions in the global industry. The impact of industry driving forces on trends and future developments was determined and predictions were made for the immediate future of the industry. The cyclical nature of the global wine industry was investigated and the industry's ability to balance supply and demand in the foreseeable future was assessed. Recommendations were finally made on how to establish greater stability in the global wine industry. Wine consumption in traditional wine countries decreased as a result of changing life styles, and prompted the wine industry to focus increasingly on importing countries. Transformation within the wine industry is assisted by the innovative and aggressive marketing strategies of new wine countries. Product differentiation, brand building and the development of a more effective distribution channel are allowing new wine countries to increase market share at the expense of old wine countries. The global wine industry experiences cyclical instability in supply and demand. Evidence suggests that a cycle is completed every eight years. A threatening oversupply of quality white wine will result in increased competition and lower prices, while red wine supply is likely to exceed demand from 2003 onwards. The wine industry needs to introduce some measure of control to co-ordinate expansion and replacement programs of vineyards with an increased quality focus. Producers and wineries will have to be far more sensitive to changing consumer attitudes and life styles and should develop appropriate production strategies in order to meet changing demands.

AFRIKAANSE OPSOMMING: Hierdie werkstuk is onderneem om die veranderende dinamika binne die internasionale wynindustrie te ondersoek teen 'n agtergrond van toenemende globalisering. Die vermoë van oud en nuwe wêreld produksielande om aan te pas by veranderinge is beoordeel deur die bepaling van hul onderskeie mededingende posisies in die globale wynindustrie. Die impak van industrie-dryfkragte op tendense en toekomstige verwikkelinge is ondersoek en voorspellings is gemaak vir die onmiddellike toekoms van die industrie. Die sikliese aard van die globale wynbedryf is ondersoek, sowel as die vermoë van die bedryf om vraag en aanbod in die afsienbare toekoms te stabiliseer. Ter afsluiting word aanbevelings gemaak ten einde groter stabiliteit in die bedryf te bewerkstellig. Leefstyl veranderinge en 'n gepaardgaande daling in wynverbruik in tradisionele wynlande, veroorsaak dat die internasionale wynindustrie sy aandag toenemend op invoerlande vestig. Vernuwing in die bedryf word aangevuur deur die kragtige bemarkingsaanslag van nuwe wêreldlande. Deur differensiasie van hul produkte, handelsmerkontwikkeling en die uitbou van 'n meer effektiewe distribusiekanaal, slaag nuwe wynlande reeds daarin om hul internasionale markaandeel uit te bou ten koste van ou wynlande. Die globale wynbedryf ervaar sikliese onstabiliteit in vraag en aanbod en bewyse is gevind dat die siklus elke agt jaar voltooi word. 'n Dreigende ooraanbod van hoë kwaliteit witwyn sal lei tot strawwer mededinging en laer wynpryse. Die rooiwynaanbod sal moontlik teen 2003 die vraag oorskry. 'n Mate van beheer word onder meer vir die industrie voorgestel om te verseker dat uitbreiding en vervanging van wingerde beheersd en kwaliteitgerig sal geskied. Groter bewustheid van moontlike verandering van verbruikersvoorkeure en daadwerklike aksie is krities belangrik, ten einde 'n herhaling van die afgelope dertig jaar se negatiewe groei tendens te voorkom.

Please refer to this item in SUNScholar by using the following persistent URL: http://hdl.handle.net/10019.1/51615
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