Member access

4-Traders Homepage  >  News

News

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesHot NewsMost Read NewsRecomm.Business LeadersVideosCalendar 

Rabobank Report: Global Wine Industry Q3 2013

10/17/2013 | 01:28pm US/Eastern

Innovation and Market Diversification Needed to Drive Argentine Growth

Rabobank has published a new report on the global wine industry, looking specifically at the opportunities and challenges of the Argentine wine industry. In the report, the bank's Food & Agribusiness Research and Advisory says that, following the decline of Argentine wine exports in recent years, Argentina must find ways to regain competitiveness, while maintaining the country's brand image, through market diversification and innovation to drive growth in the domestic market.

Rabobank's wine researchers say that the Argentine wine boom has been an impressive story. A growing demand for wines at higher price points saw Argentine exports take off from the early 2000s. However, in 2012, export volumes of Argentine still-bottled wine began to contract, unveiling the challenges the sector is currently facing.

"Wine production costs have increased as much as 100% over the last four years," notes Rabobank analyst Valeria Mutis. "Movements in the exchange rate are also far from being on par with inflation rates. While the industry has little or no capacity to alter the current economic context, there are a number of strategic steps that it can undergo to improve its competitive position."

Opportunity Among U.S. Hispanics and Mexicans

Rabobank says that in 2012, Argentina accounted for more than 3% of world wine exports, heavily weighted towards the U.S. The U.S. Hispanic segment, an expanding community, is a natural niche market for South American and Spanish wine producers. Additionally, opportunity exists in the Mexican market where alcohol consumption is relatively high and a burgeoning middle class exists. According to Rabobank, diversifying to these 'natural' markets presents potential for continued long-term growth. Elsewhere, exports to Canada and China have recorded strong pricing gains suggesting a growing market appreciation and an attractive target for future promotional efforts.

Adapting to New Consumer Trends

Argentine bottled wine can no longer compete profitably in the low-end market segments. According to Rabobank, the industry will need to adapt its wine offering without eroding its strong brand by identifying and adapting to new consumption trends. Though their preferences diverge from the typical wine consumer, the millennial generation are driving sector growth and brands that have successfully targeted this consumer segment have seen significant sales growth. Argentina's domestic market, too, presents an opportunity, as consumption of higher end wines has gradually increased. If wine manufacturers can continue to convince the domestic market to trade up in their wine selections, a growing amount of "exportable" wines could be directed to the domestic market.

Pricing Declines

Internationally, bulk wine pricing continues to fall across many regions and varietals, with Chardonnay and generic white wine pricing remaining more stable than many others in recent months. Cabernet Sauvignon and other red varietals have seen some of the most notable pricing declines.

"In the current challenging scenario," said Rabobank analyst Marc Soccio, "All eyes remain fixed on the U.S. Federal Reserve, as anticipation grows that it will pare back the level of monetary stimulus in the economy before the end of the year".

Rabobank's report on the outlook for the global wine industry in Q3 2013 is available to media upon request.

Rabobank Group is a global financial services leader providing wholesale and retail banking, leasing, real estate services, and renewable energy project financing. Founded over a century ago, Rabobank is one of the largest banks in the world, with nearly $1 trillion in assets and operations in more than 40 countries. In North America, Rabobank is a premier bank to the food, beverage and agribusiness industry. Rabobank's Food & Agribusiness Research and Advisory team is comprised of more than 80 analysts around the world who provide expert analysis, insight and counsel to Rabobank clients about trends, issues and developments in all sectors of agriculture. www.rabobank.com/f&a

For a social media-ready version of this press release: http://rabobank-food-agribusiness-research.pressdoc.com

Follow us on Twitter: @rabofoodagri

For more information please contact the report?s authors:
Valeria Mutis: valeria.mutis@rabobank.com, South America, +56 9 9227 1480
Marc Soccio: marc.soccio@rabobank.com, Australia, +61 4 1841 3187
Stephen Rannekleiv: stephen.rannekleiv@rabobank.com, USA, +1 212 808 6823


© Business Wire 2013
Latest news
Date Title
<1m ago 'Hello Moto' set to return China market
<1m ago DOGAN SIRKETLER GRUBU : Bus accident death toll in Turkey up to 15
<1m ago CENTRAL GLASS : Notification of Completion of Acquisition of Two Subsidiaries from Guardian Industries Corp. in the United States(PDF 67KB)
<1m ago UTI MUTUAL FUND : Mastershare Unit Scheme declares its 28th consecve dividend
<1m ago NORTHEAST TIGER PHARMACEUTICAL : Monthly Returns Monthly Return of Equity Issuer on Movements in Securities
<1m ago ACCORDIA GOLF : Notice of Revisions to Earnings Forecast
<1m ago METALLURGICAL OF CHINA : Fabrication of Steel Structure for Production Base of CCB Completed by China 22MCC Group
<1m ago METALLURGICAL OF CHINA : Construction of Phase-II of the Demonstration Expansion Project Commenced
<1m ago METALLURGICAL OF CHINA : MCC Huludao Nonferrous Metal Group Completed its Annual Refined Zinc Production Plan
<1m ago TEHO : Results Of Extraordinary General Meeting
Latest news
Advertisement
Hot News 
ULS TECHNOLOGY : Plunges As Improved Results Still Won't Meet Forecasts
COMS : Widens Loss On Restructuring, Acquisitions And Increased Costs
DEUTSCHE LUFTHANSA : Lufthansa cuts 2015 forecast on global economic slowdown
ABERTIS INFRAESTRUCTURAS : Application work of protective coatings
SORIN : Completes Enrollment in the RESPOND CRT IDE Clinical Trial Using Innovative Heart Failure Management Technology
Most Read News
1d ago CHINA MENGNIU DAIRY : Mengniu and Danone Strengthen Strategic Alliance as Danone Subscribes to a Private Placement by Yashili
1d ago ENERGEN : tops Street 3Q forecasts
52m ago BNP back in profit, on look out for bolt-on acquisitions
1d ago FLUOR NEW : ICA Fluor Awarded Fabrication Contract for Shell’s Heavy Oil Extraction Project in Canada
1d ago Hiring business drives LinkedIn's revenue beat
Most recommended articles
18m ago Global shares jump, yen slumps as BOJ cranks up stimulus
19m ago Global Shares jump, yen slumps as BOJ cranks up stimulus
21m agoDJEUROPE MARKETS : European Stocks Rally After Surprise Japan Stimulus
22m ago Advertising group WPP sticks to full-year outlook despite slowdown
30m agoDJChina Industrial Growth Likely Steady in 4Q, Official Says
Dynamic quotes  
ON
| OFF