The bordeaux wine market - France

1.2 The global market

The global wine market

According to a report by Acumen Research & Consulting, the global wine market is estimated to be worth $***.* billion in ****, and is expected to grow at a CAGR of *.*% between **** and ****. This gives the following estimates:

World wine market World, ****-****, in billions of dollars Source: ****

With regard to the geographic breakdown of the market, the report highlights that European wines account for **% of the global wine market.

Bordeaux wines on the international market

The Bordeaux wine industry is estimated to be worth around * billion euros in ****. It exports between **% and **% of this figure, depending on the year. The CIVB's Bilan **** indicates that in ****, Bordeaux exported the equivalent of *** million bottles, for a value of *.* billion euros, down **% on the previous year in the midst of the health crisis.

Bordeaux wines account for **% of French exports of still wines (***).

Share of Bordeaux wines in French still wine exports World, ****, as % of total Source : CIVB *IGP: Protected Geographical Indication

Bordeaux wines are mainly exported to China, the United Kingdom and the United States.Asia accounts for **% of exports.

Bordeaux wine exports by geographic zone World, ****, as % of total Source: ****

Main export countries for Bordeaux wines World, ****, in millions of ...

1.3 The French market

The national wine market

Wine occupies a special place in French culture. According to Insee industry figures, the French wine market is estimated to be worth over ** billion euros in ****.

French wine market size France, ****-****, € billion Source: ****

However, the challenges facing the wine industry are multiplying. The US surtax on wine, along with Brexit and the coronavirus crisis, are all threats to the wine sector. As for threats from within the market, the decline in wine consumption in France is accompanied by a transformation in consumer habits, to which industry professionals are being forced to adapt.

The French market for Bordeaux wines

Bordeaux wines are by nature entirely French in origin, and around half of production is destined for the domestic market. In total, the equivalent of *** million bottles were sold in ****, for a value of *.* billion euros, down **% on ****. [***] Bordeaux is the leading AOC vineyard in France, both in terms of exports and domestic sales.

Distribution of Bordeaux wine sales World, ****, as % of total Source: ****

According to a **** Wine Intelligence study, Bordeaux wines maintain an excellent reputation in France among wine lovers. These are wines of " very good quality", that "inspire confidence" and that people are "proud to serve", ...

2.1 Consumer profile

According to the Cavissima **** annual barometer conducted by Ifop on "Les Français et le vin", **% of French people say they drink wine, and **% say they buy it. A total of *.*% say they "consume wine frequently".

French wine consumption frequency France, ****, in Source: ****

According to a Wine Intelligence study also published in ****, **% of wine is consumed by the over-**s, and only **% by the **-**s.

Share of wine consumed by age group France, ****, in Source: ****

Red wine is France's favorite wine, the first choice of **% of French people. It is even more popular with men, as well as with the over-**s, who in each of these categories prefer it to white, rosé and other wines by **%.

Types of wine preferred by the French France, ****, in Source : Ifop Bordeaux wines top the list of French wine preferences by wine-growing region, with **% of respondents, closely followed by Burgundy wines (***). In particular, they are preferred by **% of men, **% of the over **s, and **% of respondents from the South-West region.

Types of wine preferred by the French, by wine-growing region France, ****, in Source: ****

2.2 French consumer habits

By the end of ****, **% of French people will say they buy wine in supermarkets. This figure rises to **% among **-** year-olds. Supermarkets are the primary place of purchase for **% of respondents of all ages, while **% prefer to buy wine directly from a winery, and **% from an independent wine merchant.

Place of wine purchase France, ****, in Source: ****

As we saw in section *.*, the wine preferred by **% of French consumers is Bordeaux. Region of origin is the second most important criterion for wine consumers, directly after price, but ahead of label, vintage or reputation.

Wine choice criteria France, ****, in % Source : Ifop Among consumers, **% buy bottles of wine costing less than €**. **% buy between €** and €**, and **% between €** and €**. According to the CIVB's **** report, **% of sales of **cL bottles of Bordeaux red wine are priced at over €*. The average price of a bottle of Bordeaux wine based on sales volumes is €*.**.

Breakdown of red Bordeaux wines sold by price range France, ****, in Source: ****

2.3 Demand affected by changes in wine consumption

Young people turning away from wine

A Kantar study reveals that young people seem to have little interest in wine compared to their elders. The **-** age group accounts for just **% of all wine consumed, and their consumption has been falling in recent years. Between **** and ****, consumption is expected to fall by *%. Wine Intelligence reveals that **% of **-** year-olds prefer another beverage than wine, and only **% claim to like the taste of wine. [***]

Red wine is particularly affected by this decline in interest, and is also facing a trend towards white and rosé wines. Consumers are drinking less and less, especially during everyday meals. On the other hand, they do like to enjoy a glass of wine as an aperitif, and prefer to drink white and rosé wines, considered to be fresh and "safe values" when you're not a fan of fine wines.

Bordeaux red wines are likely to suffer the most from these changes in consumption patterns. Bernard Farges, president of the CIVB (***) of changing consumption patterns."[***] The CIVB's Bilan **** reveals that, according to a Kantar study, it is Bordeaux red wines between €* and €* that are most affected by the population's moderation in relation to alcohol consumption. Out of *** units ...

3.1 Value chain

The wine market is divided into several types of players involved in the various stages leading up to the marketing of wine. Production leads either to direct sales on the estate, or to sales to intermediaries who in turn sell the wine to retailers. Finally, the wine is either sold to professionals in the CHD (***) market, such as restaurants or bars, and then consumed by individuals, or sold directly to households via distributors.

Source: ****

3.2 Bordeaux wine production

there are several types of wine producers who fall into three main categories[***] :

Winegrower-harvesters, who vinify their own harvest Négociants vignificateurs, who buy grapes from winegrowers for vinification Caves coopératives, which are groups of winegrowers who produce and sell wine made from the grapes of their members.

The Bordeaux winegrowing area is estimated to have some **,*** producers, with around *,*** châteaux and over ***,*** hectares under cultivation, ***,*** of which are AOC (***). Total production is estimated at * million hectolitres, of which *.* million are AOC. [***]

The vast majority of wines produced in the Bordeaux region are red (***), but the region also produces white wines, which account for less than **% of total production.

Breakdown of Bordeaux wine production, by type of wine France, ****, in Source: ****

3.3 Distribution of Bordeaux wines

The distribution of Bordeaux wines sometimes involves specialized market players. These may be wine merchants, who then sell to distributors such as supermarkets and hypermarkets, or CHD professionals such as restaurants and hotels. There are an estimated *** négociants selling Bordeaux wines, representing the "Place de Bordeaux". Merchants account for **% of Bordeaux wine sales.

Distribution now also goes through specialized websites such as Millésima or Wineandco.

Between winegrowers and merchants, brokers may intervene, selecting wines by giving an impartial opinion on the quality of the harvest, and offering them to the trade. There are an estimated one hundred wine brokers in Bordeaux, around thirty of whom draw up the official Bordeaux wine list. They are involved in **% of transactions between owner-seller and merchant-buyer. [***]

In ****, **% of Bordeaux wines were distributed in France through supermarkets and hypermarkets, while **% were sold through other channels such as restaurants, wine merchants and direct sales.

Distribution of Bordeaux wines France, ****, as % of total Source: ****

4.1 Bordeaux wine price indices

In March ****, the Wine Decider website reports a general price increase for Bordeaux wines of around *.*% over * year, a figure that remains well below general price inflation.

According to the Vinoclub website, a good Bordeaux wine costs at least €*-*. Prices can then soar depending on the appellation. Here are a few examples of Bordeaux wines and their prices per bottle:

Source: ****

4.2 Types of offer: wines and grape varieties

Most Bordeaux wines are red, but there are also whites and, to a lesser extent, rosés. In fact, white wines are enjoying strong growth, as they are easily drunk chilled for lunch or as an aperitif. Today, some *,*** winegrowers produce white wines every year. [***] In France as a whole, dry whites are expected to grow by **.*% in ****, and sweet whites by **.*%, according to Nielsen IQ. Bordeaux crémants, which are benefiting from the same trend for fresh wines to be shared in convivial moments, are not to be outdone, with *** winegrowers producing * million bottles.

Bordeaux wines are often made from several grape varieties (***). The main grape varieties used in Bordeaux wines are Merlot for the reds, and Semillon for the whites.

Bordeaux red wine grape varieties Bordeaux, ****, % of total Source: ****

Bordeaux white wine grape varieties Bordeaux, ****, in Source: ****

4.3 Appellations and geographical breakdown of Bordeaux wines

There are over fifty different appellations in Bordeaux. Some, such as Bordeaux, Bordeaux Supérieur and Crément, cover the entire Bordeaux region. Others are more localized to certain wine-growing communes in the Bordeaux region, notably on the left bank of the Gironde and Garonne rivers in the Médoc, Graves or Sauternais, or on the right bank of the Gironde and Dordogne rivers in the Libournais (***) and Bourgeais. Between the Dordogne and Garonne rivers lies Entre-deux-mers.

Here's a list of the different wine appellations found in the Bordeaux region:

5.1 Regulations

The label

Wine labels must include * compulsory statements:

the sales name wines with a geographical indication (***) actual alcoholic strength by volume origin nominal volume name of bottler batch number allergens

For sparkling wines, the sugar content is added, and for wines with a GI, the requirements may vary.

There are also regulated and unregulated optional indications.

[***]

For Bordeaux wines, the names of châteaux and other similar terms used in the marketing of Bordeaux wines must be included in the "Châteaux" file managed by the Fédération des Grands Vins de Bordeaux, prior to any transaction. Registration is free of charge, and can be accessed via the Internet at www.fgvb.fr (***).

The expressions traditionally used in Bordeaux (***), may only be used under the conditions laid down by national and/or European law. The location is free on the label. [***]

Exports

Wine exports are strictly controlled, and regulations on the subject are based on ** main points:

approved warehousekeepers approved exporter status approved economic operator status circulation of wines destined for foreign markets declaration of exchange of goods suspensive export tax regime customs warehousing tariff species origin value / Incoterms

[***]

The "Bordeaux" Appellation d'Origine Contrôlée (***)

Only wines ...

6.1 Segmentation

• Les Grands Chais de France
• Carrefour Groupe
• Auchan groupe
• Caves de Rauzan
• Nicolas (Castel Groupe)
• cavavin
• Vins Etonnants
• Inter Caves
• La Rose Pauillac
• Union de Producteurs de Saint-Emilion
• Baron Philippe de Rothschild
• Bernard Magrez
• Château Margaux
• Château Morillon
• Larré Vins international groupe (Cheval Quancard)
• Descas