If you have that unrelenting love for wine and you already have the best wine coolers at home— precisely for storing the high-end variants, this post and the subsequent discussions are expected to make a lot of sense. Based on the recent chain of global events, the entire entrepreneurial circuit is expected to witness a set of challenges and the wine industry wouldn’t be left behind. Let’s start with the devastating and catastrophic fires in the Australian contingent which negatively impacted the entire sector concerning wineries. Apart from that, the entire wine industry is also expecting a major downward shift courtesy of the changing tariffs in Europe and even Washington.
While these global ramifications are largely out of individual control, winery owners can still make certain changes to steer clear of the existing challenges while avoiding these testing times turn into overwhelming instances.
Challenge 1: European Wine Tariffs that are expected to Change
Reports are in stating the fact that the US Trade realm is expected to impose a 100 percent tax on the wine imports from the European Union. Firstly, these tariffs, if and when applied, will increase the cost of wines for the customers. Secondly, for businesses, the impacts can be of catastrophic nature as there are wine stores that are currently importing wines from Italy, France, and other European countries.
Mitigation Plan: Businesses can start by submitting request to the ‘US Trade Representative’ which will then be considered, depending on the intricacy of the situation.
Challenge 2: Australian Bushfires
One of the biggest challenges that wine industry must account for is the destruction of the multiple Australian vineyards, including the ones at Victoria, Queensland, and more. This issue is expected to increase the rates, quite massively, which in a way might have detrimental effect on the overall sales and business revenue. However, no one except the hardcore environmentalists could have predicted the existence of this challenge and therefore to some extent, this challenge is beyond human control.
Mitigation Plan: The best way to approach this issue to carefully calculate the percentage of vineyards and wineries that were actually destroyed in the bushfires. At present, only one percent of the vineyards have been affected and wine industry owners can still work hard towards better the existing scenario. Moreover, the inclusion of wine coolers into the wine industry should be prioritized almost immediately. This will allow business owners to store their wines in the best possible manner for the customers; provided the concerned vineyards are affected and wine manufacturing is actually difficult.
Challenge 3: The ‘Dry January’ Effect
Here is a challenge that involves individuals taking up a healthy route, in regard to lifestyle. The ‘Dry January Effect’ falls under the ‘Sober Curious’ movement and is expected to kill off a few revenue generation opportunities for most wine businesses even though we are already into the month of February.
Mitigation Plan: While businesses have already lived out this challenge, they need to devise a plan for combating the same in future. Brands can start by introducing non-alcoholic variants of wines and this is expected to fit in even during the drier phases and ‘Sober Curious’ movement.
Now that we have pin-pointed the challenges and the mitigation plans regarding the wine industry, it is only appropriate to understand the expectations and trends of the wine market, going into the future.
Firstly, during the five year period i.e. 2019 to 2024, the wine industry is expected to grow massively with an expected CAGR of around 5.8 percent. This means that demand for good quality wines will increase and even wine products will gain the popularity they deserve. Moreover, along with the growth of the wine industry, wine storage is expected to improve with better wine coolers being introduced during this five year period.
Secondly, with preferences and tastes changing with each passing day, it is necessary for the business owners to introduce new tastes and wine variants for catering to the existing customer base. Moreover, as proposed and discussed during the wine based challenges, the likes of Riesling Wine and certain fruity versions are also expected to increase in number.
As mentioned, at present, the entire wine making and distribution circuit is going through a metamorphosis. Moreover, with these challenges lingering along, it is important to follow the mentioned mitigation strategies for achieving the purported CAGR.