The German Wine Market: A Comprehensive Strategic and Economic Analysis

Abstract

Even though it is famous for beer, Germany offers one of the most attractive wine markets, exemplified by being the fourth biggest wine consumption market and a world champion in sparkling wine consumption as well as in wine imports. Still, fragmentation, intensive competition, lack of growth, and a changing environment speak to a challenging market for suppliers. In the absence of a comprehensive investigation on the market, this article aspires to deliver an economic and strategic market analysis. The statistical data is therefore complemented by the primary market research, notably online surveys on strategy and innovation, a proprietary database on wineries’ reputation, and an international expert survey on export success factors. The following market study aims to provide a concise overview covering the relevant market data, and to disclose strategic information about the German wine industry beyond pure market statistics. The German wine market, in the stable wine volume sold, shows dynamism underneath “the tip of the iceberg”, with industry specific environmental forces. Indeed, as the wine industry deals with agricultural products of a high emotional utility, players need to address the world of commodities and of differentiation. Structural changes are visible in the drive-out of players. Moreover, diverse and even restricting environmental factors motivate supplier´s innovation. The key is the changing consumer. Adaptive and innovative suppliers seize market opportunities and expand, despite a lack of market growth. Although the overall price level of wine in the German market is comparatively low, a voluminous premium market exists, where consumers search for experience. Sustainability has been gaining ground, and in cases of appealing offerings and strategic profiling, wineries outperform intensive rivalries and are not limited by missing growth perspectives. Expenditures for marketing will further increase, and cost management is indispensable. Success in the German wine business requires an in-depth knowledge of the complex market and its evolution.

Sparkling Wine International Market Structure and Competitiveness

“…The people began to view wine as a daily drink, and became increasingly curious about higher quality wines (Corsi et al, 2013), which generated an increase in sparkling wine consumption, especially among women (Rod and Beal, 2014). Germany, despite presenting a constant fall, starting with 11.5 points in 2004 and experiencing fluctuations between 2006 and 2011, continued to be a strong importer, due to having sparkling wine as an occasional celebratory beverage (Dressler, 2018). According to Szolnoki and Hoffmann (2014), it was one of the few countries in the world that had very diversified structured distribution channels, offering a wide variety of purchase points for the German sparkling wine consumer.…”

Increasing online shop revenues with web scraping: a case study for the wine sector

“…Currently it can also be purchased online. As stated by (Dressler, 2018), online offers for wine are increasing as the general consumer attitude to buy online increases. (Quinton and Harridge-March 2008) analyzed a sample of store and online wine buyers and found that it is relevant that the online service instills trust for the first-time buyer.…”

Wine price determinants. Is there a homogeneous international standard?

“…The Australian market is almost 90% supplied by domestic production, with a growing dominance of supermarket distribution and increased relevance of online sales [29]. Contrary to Australia, France, and Italy, which are big wine exporters, in Germany imports represent almost 50% of the domestic wine consumption, and sales are 85% off-premise and 15% on-premise [19].…”