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ProWein 2011- Wine Business in Germany

Submitted By: Lewis Perdue, January 06, 2011

German Winemakers wish to hold their Ground

After last year’s very positive development both on the domestic and export markets producers now face a new challenge brought about by the very small-volume – but also very high-quality – harvest in 2010: Can all customer demands be met? Will market share be lost due to inevitable price adjustments?

2010 Vintage: Light & Fresh = Typically German

At some seven million hectolitres the 2010 harvest proved 25% lower than that of last year (9.2m hl). “The reason for this lies primarily in the minimal fruit set caused by the very cool temperatures during vine blossoming,” explained Norbert Weber, President of the German Winegrowers’ Association. The damp weather in August triggered increased pressure on grape selection, which caused yields to drop further. In some areas of cultivation, hailstorms brought drastic crop shortfalls. Compared to 2009, losses of 30% and more were incurred in the Palatinate and on the Hessische Bergstrasse. “Lots of work and little wine,” was the disappointed verdict of Artur Steinmann, President of the Franconian Winegrowers’ Association: “We haven’t seen such a small harvest since 1985.”

However, a literally “golden October” allowed the late varieties to still ripen well so that for instance, Riesling at around 100° Oe (Oechsle scale) and noble sweet varieties – for instance along the Mosel or in the Palatinate – of up to 250° Oe were harvested. Overall the wines are light in alcohol but have good extracts. A main characteristic here is the fresh, fruity acidity. “Already during fermentation the wines are developing a wonderful aroma,” says Annegret Reh-Gartner (Reichsgraf von Kesselstatt estate, Mosel) delighted about a “crazy vintage” providing many VDP estates low yields of about 40 hectolitres per hectare. VDP (Prädikat Wine Estates) President Steffen Christmann knows: “That difficult years are not necessarily bad ones and that “separating the hay from the chaff” in this kind of vintage is a real philosophy at Prädikat wine estates.” Verdict: The 2010 vintage will give wine lovers lean, fresh and therefore typically German wines, though in small quantities.

Moderate Price Increases

Small volumes mean rising prices. Commenting on this Monika Reule, Managing Director of the German Wine Institute, said: “In view of this year’s lean harvest many wineries will find meeting growing demand from abroad a challenge. Upward price adjustments will therefore be inevitable.” However, the price increases of some 5% already implemented cannot fully compensate for the losses. The rise in cask wine prices already noticeable in autumn 2010 is likely to primarily impact the lowest price segments in food retail. Commenting on this, the trade journal “Weinwirtschaft” writes: “Prices between Euro 1.59 and Euro 1.79, like those previously seen for white wines of different varieties, will be a thing of the past.”

Trend towards the Medium Price Segment and Good Exports

The growth seen on export markets in the first half of 2010 also confirms the trend towards better quality wines. While a total of 900,000 hectolitres mean some 13% less wine was exported than in the same period last year, this was mainly to the detriment of wines below the quality wine category. Quality wines increased by 8% in volume and 6% in value terms.

Monika Reule is satisfied with the export situation: “As current figures from key markets show, it seems the crisis of the past few years has been overcome. For instance, wine imports from Germany to the U.S., our most important export market, rose by 17% in the first eight months of 2010. Imports to Scandinavia, calculated by quantity, also bode well in every respect: Sweden: +7.9%, Finland: +9.6%, Norway: German white wine +4.7%.”

Trend towards Varietal Wines

Typical German wine is varietal − and this trend is consolidating further. In Rheinhessen almost three quarters of each of the different wines are pressed from one single variety. Even though Germany is rarely associated with the term “autochthonous grape varieties” there are in fact a series of unusual varieties to discover which scarcely exist elsewhere, if at all. In the organic wine sector – though not only here – we increasingly find new, resistant varieties with characteristics that are worth discovering. Despite great diversity 80% of the area under vine is planted with just ten varieties: Riesling, Müller-Thurgau, Spätburgunder, Dornfelder, Silvaner, Grauburgunder, Portugieser, Weißburgunder, Kerner and Trollinger.

Cultivation Comeback for Whites

The growth trend for red wine cultivation is over. While white varieties were able to post growth, areas under vine planted with red varieties fell slightly between 2008 and 2009 and now account (as in 2004) for a 36% share of the total area under vine (which remains unchanged at 102,186 hectares). Nevertheless, Spätburgunder and the like suffered a loss of 400 hectares, which is still the size of a small German wine-growing area; one quarter of this was accounted for by Dornfelder. Red wines (of all origins) may still be the most favoured wines amongst consumers but for German wines purchased in retail white wines prevail with a 46% share followed by reds at 42% and rosés at 12%.

Riesling – a Successful Variety

Riesling has extended its pole position amongst white wines and its 22,580 hectares (a 22.1% share) make it the most successful German grape variety overall. This means Germany boasts 60% of the area planted with Riesling worldwide. The largest area cultivating Riesling is located in the Palatinate followed by the Mosel. The German Wine Institute’s “Generation Riesling”, an open network of younger vintners, is a successful platform created “to convey the young and modern image of German wine to the world” (German Wine Institute Managing Director Monika Reule).

Focus on Burgundies

Alongside Riesling another variety posting exceptional growth is Weißburgunder (Pinot Blanc) which, planted on 210 hectares in 2009, enjoyed an increase of 5.6%. Seeing the largest area growth in percentage was Sauvignon Blanc which, like other “international” varieties, is not one of the top ten German grape varieties. Weißburgunder (Pinot Blanc) and Grauburgunder (Pinot Gris) together stand in fourth place in the variety stakes with 8,458 hectares. Together with Spätburgunder (Pinot Noir) as well as other members of the Pinot family such as Schwarzriesling (Pinot Meunier), Samtrot and Auxerrois, Pinot varieties with almost 25,000 hectares account for a quarter of Germany’s area under vine. Visitors at the upcoming ProWein trade fair (March 27 – 29, 2011 in Düsseldorf, Germany) will be given comprehensive insights into the world of the three most important German Pinot exponents at the German Wine Institute stand.

Rosé is In

Rated highly by German consumers (who favour German exponents with a leading 52% market share) rosé wines were able to post significant gains in 2009 (sales: Euro 206.7 million). In the first half of 2010 rosés boasted a 9.8% market share; in terms of retail sales of German wines their share in 2009 stood at 12%. With a 51.8% share of the rosé market, Germany stands ahead even of France, the classic rosé wine supplier. Whether as Weißherbst, Blanc de Noirs or sparkling rosé: German vintners offer a large variety of rosés, also including Rotlings like Schillerwein (which are gained from white and red grapes that are pressed or crushed together and are not rosés in the conventional sense). According to the German Association of Sparkling Wine Producers sparkling wine was able to post a 5.3% rise in 2009 while the rosé share increased to 11%.

Organic Trend

Some 800 wine estates cultivate 4,500 hectares of vineyard according to organic methods. On a global level the organic sector has not only stood its ground very well during the crisis but it also represents a trend with growth potential in the wine segment. In the first half of 2010, German health food retail posted 10% growth in turnover. Ecovin, the largest association of organic vintners with some 200 member operations, looks back on 25 years of existence and will be featured at ProWein 2011 with 21 wineries from six areas of cultivation − more than ever before. The VDP also boasts a particularly large area of organic vine cultivation (15% of VDP’s area under vine and 14% of Germany’s organic vineyards).

Tips for Visiting ProWein

The German wine sector will be comprehensively represented at ProWein 2011, International Trade Fair for Wines and Spirits. The German Wine Institute (DWI, hall 4 booth G86) invites visitors for free tastings of a representative selection of German Pinots at the “Burgunder Hoch Drei − The Pinot Trio” event. As usual, areas of cultivation are represented with joint stands such as the Pfalz/Palatinate (featuring four new wineries) where the sommelier world champion Markus del Monego, famous sommelière and author Christina Fischer as well as Editor-in-Chief of the magazine Weinwelt, Ilka Lindemann, will present interesting wines and culinary combinations. Rheinhessen, with a total of 43 participating wine estates, will offer guided tasting sessions on the topics of Riesling and terroir. In 2010 Riesling is at the forefront of Rheinhessen’s activities since the oldest documented instance of this variety was recorded near the city of Worms in 1511. At Franconia’s joint stand featuring the region’s almost entire area of cultivation (with the major vintners’ cooperative Winzergemeinschaft Franken – GWF) visitors should not only taste Silvaner but also look out for Pinot varieties. These have done very well in recent wine competitions.

Baden: Badische Wein GmbH will be featured with just under 30 wine estates and cooperatives and other cooperatives can be found at the stand of Baden’s sales association Vertriebsgemeinschaft Weinland Baden. The Württemberg cooperative Werbegemeinschaft Württembergischer Weingärtner-Genossenschaften will also highlight the Trollinger variety in 2011 (“Trollinger 2.0”); other Württemberg cooperatives will be featured at the Vertriebsgemeinschaft Weinpark Württemberg.

Other interesting attractions will include the Winzerinitiativen (vintner initiative) joint stands like “Message in a Bottle” (Rheinhessen), “Frank + Frei” (Franconia), “Der klitzekleine Ring” (Mosel) or “Gipfelstürmer” (Middle Rhine).

After celebrating its 100th anniversary in 2010, the VDP will offer many panel discussions and obviously lots of wines to taste at its joint stand featuring 126 vintners and its partners Gerolsteiner und Gaggenau.

Featured in the branded and sparkling wine segment will be renowned, high-exporting wineries like Henkell & Co., Rotkäppchen, Zimmermann-Graeff & Müller, Deutsches Weintor, Schloss Wachenheim, Binderer St. Ursula, Peter Mertes, F.W. Langguth Erben, Reh-Kendermann, Moselland, Bernard-Massard and Badischer Winzerkeller. Baden also picks up on the topic of small volumes: “We see the general trend towards well-developed quality plus stronger identity and links between consumers and producers and retailers. Here it is important to carefully aim for increased prices in a way that consumers understand,” states Henning Johanßen, Head of Communication at Badische Winzerkeller.

German sparkling wines accompanied by select chocolate specialities can be tasted every day during ProWein 2011 at the GEV stand.

The author Dr. Rolf Klein is a freelance wine journalist and writer.

ProWein 2011 press contact:

Anne Meerboth-Maltz

Tel. (312) 781-5185

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