Subscriber login Close [x]
remember me
You are not logged in.

Most wine industry's challenges are no different to other sectors, says economist Mike Veseth

Published:  15 August, 2014

Mike Veseth, the celebrated US wine economist and blogger, has dismissed the idea that the dynamics of the wine industry are different to the challenges faced by other business sectors.

Mike VesethMike Veseth looks at the challenges facing wine producers and retailers around the world

Mike Veseth, the celebrated US wine economist and blogger, has dismissed the idea that the dynamics of the wine industry are different to the challenges faced by other business sectors.

In a wide ranging interview with UK wine consultant, Jerry Lockspeiser on today's Harpers.co.uk, Veseth, who publishes his own blog the Wine Economist,  looks at the challenges facing the global wine industry and how much it could benefit from looking at how business sectors tackle their challenges.

Veseth explained: "The wine business is a business and while many of the institutional elements are quite specialised to wine, many of the business aspects are not really unique. I like to say that the wine business is not so special as my winery friends like to think but not so generic as my economist friends believe."

Veseth also tackled the issue of retailer and supplier relations and the need for less conflict and more open trading.

"Disintermediation (cutting out the middleman) is one of the most important recent trends in the wine industry and it certainly does shift power from those who control supply to those on the demand side.  This is happening everywhere although it is perhaps most advanced in the UK market."

He added: "The conflict between the two sides is most heated in the commodity wine market segment. I think that as that market tier is increasingly undermined by the success of artisanal spirits, craft beers and ciders, both sides will realise that they need to be allies rather than enemies so that they can better succeed at higher price points. So I recommend that both sides take note of these common enemies and find ways to work together more effectively."

Veseth, who will be sharing his views at this November's Wine Vision conference in London, also looked at the opportunity for wine in the US. He argued there was not a natural wine consumer in America, but the market is instead being driven by "dozens of different and diverse consumer categories".

Encouragingly the growth in wine in the US is coming from a "segment of the market that is well informed" and "growing quickly".

He said the number of wineries starting up right across the US, and not just in its traditional areas, is having a key impact on how wine is being more widely accepted.

"I have tasted nice wines from places you might not expect such as Idaho, Colorado, Arizona, New Mexico, Michigan, Indiana, New York, New Jersey, Maryland and Virginia.

"I have tasted nice wines from places you might not expect such as Idaho, Colorado, Arizona, New Mexico, Michigan, Indiana, New York, New Jersey, Maryland and Virginia.

"You don't think of Texas as wine country, but the demand for Texas wine currently outstrips their ability to grow the grapes they need to make it."

He said the growth in local wineries should not be underestimated. "They invite local interest and help build a more sophisticated consumer base."

Veseth believed the average US consumer was far more open to trying new ideas, formats and styles of wine that they might be in more traditional wine drinking countries in Europe.

"Consumers in the US market are constantly presented with new products, new packages and new messages and perhaps they are open to new ideas in wine because they don't see wine as being fundamentally different from other products and see innovations in wine as just another part of a dynamic consumer world," explained Veseth.

He also believed the increase in interest in food, particularly through television, will have a knock-on effect on wine.

"The influence of television - especially the Food Network -has introduced millions of people in the US and around the world to culinary and lifestyle ideas that  are easily stretched to include wine," he added.

* Mike Veseth will be one of the keynote speakers at this November's global business conference, Wine Vision, being held in London between November 17-19.

* Go to People to read the full interview with Jerry Lockspeiser.

Keywords: