Tom Burchfield, Head of Market Intelligence, ProWein Agora Takeaways
Tom Burchfield, Head of Market Intelligence, shares insights from his presentation and panel discussion at ProWein Agora, alongside his takeaways from the event itself.
First time at ProWein Agora. A maze of stands. The no and low section was pretty massive, a sign of it being perhaps the one wine category that is growing. The spirits section also vast.
I managed to locate my former Vivino colleagues (where I worked for six years) to catch up with old friends. They told me the fair was half as big as last year, itself half as big as the year before and that there were fewer attendees. Still felt vast to me.
Agora
This year ProWein reintroduced the Agora stage, where various experts present on and discuss key topics within the industry. How to market to the new generation? How to market no and low? How to leverage new technologies including AI to better serve customers? What is the current state of the fine wine market and where is it going?
That one was the topic I presented on. A lot of ground to cover in 20 minutes, and the aim was to set the scene for a debate with Krister Bengtsson (founder of Star Wine List) and Robert Joseph (journalist and consultant). To further condense my 20 minutes into a 3-bullet point summary of where the market is and where it’s heading:
- Price stability. At the top of the fine wine market, more wines are now either seeing flat or gently rising prices than falling prices.
- Fragmentation. The fine wine market is broader than ever, and this trend is likely to continue with the next generation of collectors.
- Stratification. At the same time, across segments within traditional regions like Bordeaux and Burgundy we see the top of the pyramid looking more secure than further down. Within Bordeaux the portion of the industry that is at risk is growing.
Scene set, half an hour of interesting debate.
Is demand for fine wine elastic?
Yes, in my opinion, not for others.
My take is that participants are doing everything they can to maintain higher release prices – squeezing supply, pouring cash into production to achieve high scores. Is that sustainable on their side? Is it worth the effort with prices softening post-release? I believe there is a price that works. We see this consistently with Bordeaux after release. There is a price at which demand is unlocked. You can try to avoid market reality or you can accept it.
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Liv-ex trades of Lafite 2021
A flight to value. Something we all agree upon. Whether that’s the collapse in demand for Second Wines or changing tastes in the on-trade, consumers are after value.
The next generation of collectors. We agree that price is a challenge. The industry needs a broad base of potential collectors. How does that happen for Burgundy, where even regional wines are becoming a special occasion indulgence? The on-trade needs sommeliers that have not just tasted, but drunk both the classics and the future classics.
GLP-1 medications. An existential threat for the fine wine market? Some say yes, I say not at this point. Fine wine is sheltered to some degree.
Other reflections
- Betraying my ignorance, but I had no idea that Dusseldorf has a big Japanese community? I do now, and can vouch for some excellent ramen as a counterpoint to wurst.
- The drinks industry is clearly faced with many challenges. The more we discuss these, try things, share successes and challenges the better. But don’t forget that wine has an incredible ability to bring people together. Despite the current challenges, people were having fun at ProWein.
- Of the UK contingent travelling to Dusseldorf on the Saturday, judging by how many were supporting the team in blue in the 6 Nations rugby decider, a high proportion were Scottish.
- Was everyone in the brauerei? Heading to Brauerei Schumacher to sample the city’s trademark Alt Bier on Saturday night, it was packed full of Proweiners – probably to be expected, drinks industry people warming up for vinous delights with malted beverages.
