What are the dominant business and economic characteristics of the global wine industry?.
The global wine industry is composed of a large amount of companies all around the world. The market size is big, with high revenues, and estimated 6.8 billion gallons total volume. Exports have being increasing in this industry, representing a fast growth of the market. The market is concentrated in some countries around the world; production is very complex requiring the best and qualified raw materials. There is a mix of channels and distribution strategies depending on the marketing and price/taste/quality/ that the brands are positioned. The amount of capital required to start a winery is high and depends on the scale of production. For example, to start a small winery it is required around $1 million sourcing grapes from outside growers. The products and services are differentiated and factors like quality, well known brands, are the key for the success in this industry. .
What is the industry like?.
The impact of wine in different cultures around the world has been growing increasing the wine industry in the last decade in a fast rate. The industry is composed by two categories: Old World and New World countries producers. The larger New World producers are Australia, Chile, United States and Argentina. The Old World is France and Italy. There are two systems for naming wine, vertical and appellion. Appellion, means the name of region or specific area where the wine is from. Vertical, name based on the type of grape used to produce wine. Government and regulations have a big impact in this industry. Some regulations helps the local consumption, or imports. On another hand it can be a barrier to export or import. A lot of substitutes exist in this industry.
2. What is competition like in the global wine industry?.
Competition is high and exists not only domestically but also globally. The wine industry is characterized as a globally competitive environment.
