LinkedIn Post 1: The Drivers of Modern Wine Industry

Those active on LinkedIN may know that the professional networking site has just launched an article/blog publishing platform for some of its millions of users. The idea is to allow the members to make the most of targeted reach to fellow professionals and industry watchers.

As an active user of LinkedIN, I wanted to take advantage of this new feature and share my thoughts about a very interesting subject which I’ve been contemplating writing about (actually for this site, as I’ve been doing since 2008). So, I did end up writing on LI’s publisher and as expected, the response has been good. I am reproducing it here for the benefit of readers of this site. (See original)

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The wine industry and its functioning as we know today – dynamic and extremely progressive, is a far cry from a confined and traditional affair about two decades ago. While globalization has played a vital role, increased consumer awareness and a corresponding demand for more refined products and services, is at the crux of this dramatic transformation within a relatively short period of time. This demand, in turn, has given rise to various organisations and ideas which have helped shape up the contemporary trade and enhance its global appeal. In fact, wine’s rising popularity around the globe, especially in the last decade, wouldn’t have been possible without these innovative brands and smart individuals behind them. In a sense they represent the building blocks of the modern wine world.

Wine’s fascinating turnaround story is often measured by its commercial success worldwide, which is reflective in the stories we mostly come across in the media – like this recent one about most powerful wine brands. But in spite of economics being the ultimate yardstick of wine’s increasing footprint, the industry owes a great deal to the actual drivers of the contemporary business. The list below mentions the most notable of these brands, with an international presence and irrespective of their commercial prowess.
1.) Technology: Most of these are young companies which followed the start-up route during the wine boom of the late nineties and the first decade of this century. They have not only acted as vital connectors of information highways of the wine world but also simplified the way we gather information.

  • CellarTracker: Those who use/follow CT swear by it, and why wouldn’t they? A one of its kind cellar management tool, it is the largest and most credible platform for serious wine lovers with an enviable database of tasting notes, wine reviews and recommendations. Eric LeVine‘s gift to the wine world is an invaluable one and will remain so for a long time to come.
  • Wine-Searcher.com: If there is one organization which has brought transparency and accountability to the online wine trade, it undoubtedly has to be Wine- Searcher.com. Since its inception in 1999 in London (later moved to New Zealand), the company has gone through a dramatic transformation – both as a wine search engine, which remains its USP, and in its latest avatar as a wine news and information site. I had the good fortune of being a part of Wine-Searcher’s wine team and witness its raw ability to empower the wine consumer. Its strength lies in the amount of data it has accumulated over the years, and more importantly the ingenious way the data is integrated to fuel its search engine software.
  • Social & professional networking sites: With the advent of web 2.0 and the corresponding rise of social media, it seems there is no limit to how much wine information is now available online, most of which is dynamic and real time. Today’s vibrant wine ecosystem is unimaginable without Facebook Likes & shares, Twitter’s witty one liners, LinkedIn’s professional inputs or Instagram’s creative photo sharing.
  • Apps, apps & more apps (more the merrier!): With the increase of tech-savvy wine consumers, social media engagement and usage of mobile devices, it is but natural that so many mobile apps have flooded the market of late. They offer a host of features, ranging from label scanning for tasting notes and ratings, to those which let you sift through restaurant wine lists remotely, plus many many more.

2.) R&D, education & training: This sector of the industry is probably the most vital considering the scope and opportunities of spreading knowledge and information, particularly in young and upcoming wine cultures. A case in point is this short video about China’s rise as a major wine market (note that education is the most common keyword here).

  • WSET: The Wine & Spirits Education Trust is at the forefront of wine education in the world. Whether it is basic wine knowledge or specialist qualifications, WSET’s contribution in spreading awareness about wine remains unparalleled.
  • Court of Master Sommeliers: The hospitality industry provides a major source of wine consumption and enjoyment around the world and therefore it is of utmost importance that a trained manpower is available to fulfill this requirement. CMS offers major industry-recognized sommelier certifications, including the holy grail that is Master Sommelier.
  • Other wine education providers: While there are many institutes around the world offering wide ranging courses; from wine production to marketing, there are some which have carved a niche for themselves. The likes of Roseworthy (University of Adelaide) and UC Davis stand out for their quality of wine production courses, whereas BEM Bordeaux has emerged as a chosen destination for business related studies.
  • AWRI: A pioneer in R&D field, the Australian Wine Research Institute’s repertoire of ground-breaking research, especially in wine production, has helped producers around the world to overcome many challenges in the vineyard and winery, resulting in creation of more refined products. Whether it is advanced vineyard management, improving vine health, clonal research, sustainability innovations, simplifying wine microbiology, demystifying wine ageing, important studies on wine closures or valuable research on market behavior and consumer preferences, this organization’s list of research work has made it indispensable to the wine industry.

Then there are organizations like Wine Intelligence and IWSR (International Wine & Spirit Research) who excel in keeping track of market sentiments through specialized studies which include a range of market insights, trends and consumer behaviors, among others.

3.) The marketplace:With rapidly changing business dynamics and fierce competition among brands to capture new markets, there has been a revolution of sorts in how wine is sold today. While brick and mortar outlets still exist, their monopoly has steadily declined and replaced by numerous other ways consumers are able to source wine today.

  • Liv-Ex: Although not a place where you can directly buy wine, it makes to this list solely on the basis of the unique proposition it brings to the fine wine market. It is like the wine world’s stock market, where wines are traded online and over phone and valued against Liv-Ex’s large data of historical and current wine prices. Those with a stake in the fine wine market or wish to have their fingers on the pulse of the market, consider it as an invaluable resource.
  • Online wine stores: Wine e-commerce is big business today and with technology playing a big role in the promotion of the beverage, it is hardly surprising that they have mushroomed all over the world and catering to a big chunk of the market.
  • Futures market: Buying/selling wines as futures is not a new phenomenon but in today’s wine economy it has gained added significance owing to a renewed focus on premium wines and a healthy perception of them being good source of alternative investment. No wonder, the futures/en primeur market is seen as a barometer of a country’s fine wine potential.
  • Auction market: Those who followed the wine boom of the last five years which unfolded in the east, especially in Hong Kong, Singapore and mainland China, realize the importance of the auction market in generating a wave of interest and passion about the beverage. One may argue that this form of trading is super niche and hence has limited reach but the buzz which accompanies fine wine auctions is enough to make this form of trading a significant player in today’s wine economy.

4.) Critics, writers and domain experts: The contemporary wine world owes a lot to these individuals for spreading their wisdom and knowledge about wines and who positively influence our thoughts/opinions about the beverage. Whether it is an acclaimed writer, a prolific blogger or a mass-followed taster and critic, they have deep understanding about the subject and the dynamics of our industry. Thanks to their efforts, coupled with opening of new channels of communication, wine’s appreciation is on a steady rise worldwide. (The list of such personalities is too long to be included here).

5.) Sommeliers: The new breed of sommeliers are not just traditional wine servers – they are the new-age ambassadors of wine wielding enormous clout in the trade, a reason the hospitality industry lays a lot of emphasis in hiring top sommeliers to run their wine programs.

6.) The wine media: Last but not the least, how can our vinous thirst be quenched without the regular supply of news, views and analysis about virtually everything happening around the wine world? In spite of alternative sources of information (read social media) making inroads in the wine ecosystem, a vibrant mainstream wine media is still, and will remain, the primary source information.

Cheers,

Niladri

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