Cooperatives,a Driving Force in the Global Wine Industry

作者: Diego Bonnel        来源: 《酒典》|原创作品 谢绝转载

Not only are cooperatives important players, they have been also improving in the past years due to the pressure of market forces. Many have internal factors that contribute to their success and have a bright future ahead, provided they take into account the current threats they are facing.

Co-ops are important players in the world of wine.

Cooperatives are ventures owned jointly by a number of different members. They have the advantage for their members to pool winemaking, marketing resources and costs. They are important players in many countries, specially in Europe. Cooperatives probably account for more than half of all the wine produced in the big three Old World wine countries (France, Italy, Spain). In France for instance, they produce about 70% of all wine in regions such as Languedoc. In Italy, almost 60% of the wines the country produces is made by co-ops — 52% at PDO (Protected Designation of Origin) level, 65% at PGI (Protected Geographical Indication). Italy’s largest producer is Cantine Riunite & Civ [1,700 members] with more than 500 million euros a year in revenues. It’s also the largest European wine producer. Over the period going from 2013 to 2018, cooperatives’ exports have grown by 44%, compared to Italy’s general wine export growth of 27%: eight of the top performing 15 wineries in Italy are co-ops, eight of the top European co-ops are Italian. Source: Wine Monitor.

The global context is pushing co-ops to improve constantly.

Three main reasons make that cooperatives are compelled to improve to survive.

First, competition. Competition is global and co-ops have to struggle to keep their customers and find new ones. This competition is located in the retail market but there is also competition between and among cooperatives.

Second, some structural wine market changes have contributed to push co-ops to make better and better wine. With the 2017 Offer / Demand gap on the world market, retailers have increasingly been looking to develop direct contacts with producers (a lot of them cooperatives, which were among the rare players that could potentially assure a certain volume with a specific quality) in order to make sure their shelves were full of wines with a reasonable quality/price ratio. In that quest, cooperatives have seen an opportunity to develop new markets and get also higher margins. Facing retirement of old growers and potential vineyards abandonment, some co-ops organize themselves to buy the land – either through direct investment, public investment or private investment – to let the land to new growers at competitive prices. And co-ops want this investment to be profitable, meaning that they are looking at above average grape quality. Examples of co-ops looking for external financing are Vinovalie in the South-West of France and Rhonea in the Southern Rhône Valley, also in France.

Third, changes in the global economic situation also intervene. Traditional markets for some cooperatives simply disappear or decrease considerable. Angola and Brazil for Portuguese coops are a couple of relevant examples. Angola is especially dependent on oil export income. With oil prices going down, the country is not buying as much Portuguese wine as usual. Economic and political crisis in Brazil has also had a negative impact on Portuguese wine exports to this country. As a result, co-ops in Portugal have to find new markets.

Key success factors for good co-ops.

Traditionally, co-ops have been gathering many strengths. They have an increased resilience and survival rate due to their capacity to spread the adverse effect of any shock across members. Cooperatives do have the capacity to absorb fluctuations at the expense of their members. They can also offer enough volume to retailers at affordable prices and fill the shelves at different price points, from entry level to the more expensive top shelf wines. Besides, their scope, vision and buying power is so strong that many of them are adding individual chateaux and vineyards to their portfolios and marketing them as their high-end wines. In some cases, they have enough volume to promote an entire region. Ex. Carinena region in Spain. Cooperativa Bodega San Valero, gathering 700 growers and 3.500 ha, a co-op founded 1.944. Moreover, co-ops offer good and small growers the opportunity to sell their grapes at a premium price. For these growers, co-ops are a way to survive. One of a co-op's greatest strengths is that it can offer winegrowers guaranteed participation in the industry. Co-ops shape and keep the landscape alive. Without them, many country landscapes would have been abandoned. They defend the indigenous grape varieties as well. A grower with 2 hectares is used to planting a certain type of vine and they give him good quality and a security in regards to the health of the plant. And so, in many cases, in Italy for example, the viticulture of the cooperatives remained that of the autochthonous vines. Local varieties and viticultural habits were preserved like this because there were linked to local traditions. Finally, big sized co-ops have the chance to compete in volume with producers like Caifornia’s Charles Shaw or Australia’s Yellow Tail.

However, in order for co-ops to take advantage of their strengths, internal management factors have to be present.

A strong working social capital. It includes the social networks and the norms of reciprocity and trustworthiness that arise from them. When working social capital is strong, cooperative members have a common vision, which facilitates the achievement of economic success, measured as price per kg of grapes received by the growers. It can be assessed by measuring the strength of member relationship with the winemaker, member commitment, member trust and the existence of a shared common vision. It must be reminded that many of the coops organized in the 1920s and 1930s were motivated more or less by socialist or communist political ideologies. Their desire to earn short run revenue, and to share it equitably, often conflicted with the long run need to protect quality and develop markets. When a common vision exists, and it is shared by a majority of members, then the co-op is strong.

Structural factors such as the farm size in hectares is key. The higher the farm size, the most likely is the grower to receive a premium price for premium quality grapes.

As far as organizational       factors are concerned, they include the existence of grape quality assessment criteria (eg. grape acidity, visual grading, …) and presence of price incentives tied to grape quality as well as the monitoring of individual growers. Vineyard management activities (canopy management, cluster thinning, …), vineyard consulting offers, training activities for members and active involvement in cooperative procedures (eg. Participation in the annual meeting) all participate in the building up of a common vision.

To complete these factors, a sound financial management is needed. Since for coops, margins are razor thin, they must rely on technical efficiency, which combines both volume and margin-boosting quality. Cooperatives can only achieve that goal if they have state-of-the-art production and storage facilities. For instance, Adega de Borba in Alentejo, Portugal has invested 12 M € for a new facility, completed in 2011. Cave de Tain in Northern Rhône in France has also invested 10 M € to achieve the same result. This has to be accompanied by cooperative governance principles adapted to high quality grape production. Only co-ops with professional management teams do thrive.

Co-ops have the possibility to shape a bright future, …

A current trend favoring co-ops, and born with the recent wine under-supply, is buyers going directly to suppliers, that is retailers going to cooperatives to assure supply. This allows a direct contact between parties and the potential establishment of a relation based on trust and confidence. Besides, since they represent a considerable part of the wine production, cooperatives can embrace sustainability / Fair Trade programs and be at the forefront of profound changes in the industry. This can be a powerful marketing tool, since a wine with a story is much better than just wine.

… provided they take the current threats into account.

However, some threats have to be overcome. Branded wines and big new world producers are a threat to co-ops. They have a powerful marketing strength and expertise in wine positioning, something that many co-ops are just beginning to acquire.

Within the industry, renewal rates are low and the average age of growers is increasing. For example, France has an average age of vine growers increasing from 48,4 years old in 2013 to 49 years in 2016. Source: Haut Comite de la Cooperation Agricole. 2017.  Moreover, as a reaction to vineyards under the threat of abandonment, co-ops buy back the land. But not all have the financial means to do so, which is another challenge and threat, that co-ops face.      


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作者简介:Diego Bonnel, 为多家酿酒厂担当葡萄酒顾问,在数个 国家的官方机构任职,超过 25 年。每年品尝数千款酒,特 别了解(以西班牙和葡萄牙为主的)伊比利亚半岛和法国 的葡萄酒。

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