Enovitis in CampoORGANIC WINES ON GERMAN MARKET

5. Guigno 2015

The German wine market and the position of organic wines vis à vis supply and demand based

on current market data and research

Dr. Hermann Pilz, Chief Editor WEINWIRTSCHAFT

THE GERMAN WINE MARKET

ORGANIC MARKET AND ORGANIC WINE PRODUCTION AND OFFER

GERMAN ORGANIC WINE CONSUMERS

Structure

The German Wine Market

Wine Market Balance Germany (million hl.) 1979-2014

Verbrauch

Import

Weinerzeugung

Export

Nettoexport

0.0

5.0

10.0

15.0

20.0

25.0

16.0

8.5

4.2

1.174

19.7Consumption

Import

Production

Exports

Exports netto

Market Shares of the Wine Colours 2014

White

Rosé

Red

Market Share for Wines of GermanyTotal Volume 20 Mill. hl

37.50%

62.50%

German WineForeign Wine

German Wines 7,5 Mill. HlForeign Wines 12,5 Mill. hl

Basis: Food retail total + DM incl. Aldi – Q1-2009 – Q4-2014

Wein nach Farben - Preis Euro/Menge

Price Development: Average Price Increase

WINE

Red

White

Rosé

1/2009 4/2014

Retail Stores: Where is Wine Purchased?14.6 million hl. of still wine purchased by households

Vintners & Coop Σ 8.000 6,00 €

Special Trade, Highstreet Σ 4.000 10,00 €

SupermarketsΣ 40.000 3,60 €

Discount Σ 16.000 2,50 €

Average price of wine: 4.65 €/l

DiscountGroceriesSpecial TradeVintners

Demographic development is reducing wine consumption

– The German population is declining– The percentage of older people is growing, lower consumption – Proportion of people is increasing who, for cultural reasons, do not

drink wine– Market penetration is dropping

The Climate for Wine in Germany Remains Positive, but...

Organic Wine Production and Offers

The German market for organic foods is the biggest in Europe

2014 sales of organic food: 7.91 billion euros

German eco-area: 1,089,000 ha. (+ 2,7% compared to last year)

Number of organic farms: 23,937 (2,9% of the total agriculture)

2013 -> 2014 German households spent 4.8% more on organic food

Constant changes in the market and the consumers

Food retailers and discounters offer organic food in a variety of product groups

Target group has expanded and is more difficult to narrow down

Current Situation

11BÖLW 2015

Retail Stores: Where to buy?

12

Sales 2014

Percentage 2014

Sales 2013

Percentage 2013 Growth

Billion € % Billion € % %

Supermarkets / Grocery Stores 4.21 53% 4.5 54% 9%

Health Food Shops 2.62 33% 2.4 32% 3,6%

Other 1.09 14% 1,1 15% -0,6%

Total 7.91 100% 7.6 100% 4,8%

BÖLW,2014

Discount Special Offer: Bio Wine from Abruzzo

Global Organic Vineyard Acreage (2013)

14

Countries Organic Vineyards (ha.)

Percentage of Vineyard Acreage

Percentage of the Global Organic Vineyard Acreage

1 Spain 79,016 7.6% 30.4%2 France 61,055 7.5% 23.5%3 Italy 52,812 6.7% 20.3%4 USA 11,448 2.8% 4.4%5 Turkey 8,871 1.7% 3.4%6 Germany 7,400 7.3% 2.7%

7 Greece 5,001 4.5% 1.9%9 Chile 4,567 2.3% 1.8%

10 Austria 4,178 9.1% 1.6%11 Argentina 3,193 1.5% 1.2%12 Portugal 2,523 1.1% 1.0%13 China 2,000 0.4% 0.8%

Own representation in accordance with DWI, 2013

Since 2007, the area of German organic vineyards has doubled

2012: 7,400 ha – 7.6% of all Germany’s vineyards

A total of 700 organic wineries – 3.7% of all wineries

Situation 2013/2014

15

Association Businesses Size (ha)

ECOVIN 250 1,900

Bioland 126 1,025

VDP 49 980

Demeter 47 450

Naturland 34 285

Biokreis 2 31

EU-certified X 2,730

According to the associations and AMI 2013

Calculation on German Market: Model Calculation

16

Organic wine market in Germany: 1,160,000 HL

German production1:560,000 HL

(45%)

Imports2:600,000 hl

(55%)

8,000 hectares of organic vineyards(corresponds to 8% of the entire German vineyard

area)

Percentage of entire German wine market: 6.60%

Number of organic vineyards:700

Consumption per head in litres in Germany:approx. 1.4 litre/head

1: Estimate: Hochschule Geisenheim University; 2: Weinwirtschaft 2015/2, p. 50-52

17

German Organic Wine -Consumers

Regularly Purchased Products with Organic Seal

18

0%

10%

20%

30%

40%

50%

60%

38%

16%24%

3%6% 7%

2%

4%

51%

37%

17%

27%

2%7% 6%

2% 3%

48%

2011 2014

Small changes – similar structure

Fruit, vegetables, dairy products, eggs and meat are ahead

n=1225/1322

2009

Hoffmann & Szolnoki, 2010

Regularly Purchased Organic Products acc. to Social Class

19

More organic products in the upper classes

n=1322

Fresch

Fruits

and Vegetables

Meat a

nd Sausa

ges

Milk

, Cheese

and Eggs

Backerie

s, Sw

eets,

Frozze

n Food

Other Generic

s

Non Alcoholic

Bevera

gesW

ine

Non of this

0%10%20%30%40%50%60%70%

45%

21%30%

3%7% 7% 3% 3%

41%35%

17%28%

1%6% 6%

2% 3%

47%

28%

9%19%

2% 5% 4% 2% 3%

60%

Choise of Products depand on social class

Upper Class Middle Class Lower Class

Regularly Purchased Organic Products acc. to Gender

20

Women buy more organic produce

Fresch

Fruits

and Vegetables

Meat a

nd Sausages

Milk

, Cheese

, Eggs

Backerie

s and Sweets

frozze

n food

others

generics

Non alcoholic

beverages

Wine

Non0%

10%

20%

30%

40%

50%

60%

31%

14%

25%

2%5% 4%

1% 3%

53%

41%

19%

29%

2%7% 7%

2% 3%

44%

MALE FEMALE

n=1322

Purchase Frequency of Organic Wine

21

22% of wine drinkers (8.9 million) deliberately buy organic wine now and again

78% of wine drinkers (31.8 million) do not

n=1322

Several times a week 0.1

Ones a week0.3

two- threetimes a week0.3 ones a month

2.4

less a month 18.7

never78.1

Comparison of Wine Consumers

22

Non-organic wine purchasers

78% of wine drinkers

31.8 million consumers

Organic wine purchasers

22% of wine drinkers

8.9 million consumers

• Positive developments in the organic sector in the past five years• Positive image of organic products in the minds of consumers• High proportion of organic products in Germany• More and more wineries are converting to organic• Approx. 8000 ha. organic vineyards• Organic wine – higher social classes

Summary

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• Only 3% regularly buy organic wine• 18% buy organic wine less than once a month• Consumers’ attitude: “100% natural”• Recognition• Deliberate purchase of organic wine

• Bund Ökologische Lebensmittelwirtschaft (BÖLW) (2014), Zahlen, Daten und Fakten der Biobranche 2014.

• Bundesprogramm Ökologischer Landbau und andere Formen nachhaltiger Landwirtschaft (BÖLN) (2012), Präferenzen und Zahlungsbereitschaft deutscher Verbraucher bei Öko-Wein.

• Deutsches Weininstitut (DWI) (2013), Öko-Weinbau in Deutschland.

• Römmelt, W. (2015), Unruhe trotz Wachstum. Weinwirtschaft, 2015/2, S. 50-52.

• Wechsler, B. (2014), Intensivinterview am 11.11.2014 um 16:00 Uhr, Weinbaudomäne Oppenheim, Weinmarketing: Dienstleistungszentrum ländlicher Raum-Rheinland-Pfalz.

• Hoffmann, D. & Szolnoki, G. (2010), Verbrauchereinstellungen zu Bioweinen in Deutschland. 33rd World Congress of Vine and Wine (OIV), Tiflis, 20.-27.06.2010.

Bibliography

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Thank you