We are addressing the different distribution formulas of wine, on the basis of surveys carried out by Mediobanca which has interestingly split the results depending on the type of company (total market or just cooperatives) and product type (all wines rather that only those above 25 euros). The picture of 2007 data when compared to previous years shows: (1) a stabilization of the weight of large distributors, which does not seem to grow more than the market anymore and that is indeed declining in the segment of high price wines; (2) the steady decline of wine shops and wine bars as regards the whole distribution of wines, while they maintain a leading role in the high price wines; (3) the strong growth of alternative distribution methods.The market share of large surfaces reached 43.7%, a bit less than last year (44.2%). Cooperatives as always directed a more significant part on large retailers (about 50% of their products against 51% last year). The decline of wine shops is quite evident from the graph, with their share dropping to 8.3% from 10% in 2006 and 11.5% in 2005. Very similar, although less pronounced is decline of the contrade channel which represents 20%, a bit less than last year. Having said that, you might wonder who grows because all parties we mentioned were down! Direct sales and channel called “others” are taking market share in a significant way, highlighting the increasing role of internet and remote sales.Things turn radically different when we move about the highly price wines (the ones selling for more than 25 euros per bottle). Here the evolution of sales channels is fairly stable, with the large surfaces that seems to have lost further ground moving from 9% to 7% and on-trade channel going from 41% to 44%. The wineries did not shine in 2007, maintaining their very high stake of 28%. The strong growth in direct sales which we noticed for the totality of wine distribution is not evident here, with an increase compared to 2006 (12% vs. 10%) but back to the same level of 2005. Similarly, the other channels do not seem to have had better luck and remain relegated to 8% of the total (compared to 10% in 2006).I include again the two pies with the distribution of wine in Italy. You can see the major role of large surfaces in the sale of wine but not in the high quality wines segment. Looking at this detail, cooperatives seem to segment better their distribution channels: a lot more large retailers for the total wine business, but much less for the really good wines (only 2% compared to 7% for the total of the sample).
Monday, April 28, 2008
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