By now you've probably heard: inflation is chronic, geopolitical headwinds are stifling trade, overall consumption is declining in key markets, and competition from rivals has never been fiercer. As a result, many wine producers currently find themselves knee-deep in a manure-soaked field, without so much as a paddle and little sign of firmer ground ahead.
Yet amid the doom and gloom, a handful of businesses are thriving despite the difficult macroeconomic context. Growth, once taken for granted as a function of scale or distribution, has become harder to achieve – but it is far from elusive. Wineries, retailers and multinationals are all finding ways to stay profitable, offering valuable lessons for an industry desperate for some inspiration and, frankly, a bit of good news. Their secret? A mix of strategic premiumisation, brand-building, relentless customer focus, supply control, and good old-fashioned consolidation. Amen to that.
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In the early twenty-first century, the global wine industry ballooned at a spectacular rate, buoyed by access to new and emerging markets, most obviously China, and a burgeoning middle class in developing economies thirsting for pleasures long taken for granted in the US. However, those days are long gone. For companies like Origin Wine, growth led by market expansion has become far harder to achieve. But not all growth depends on finding new customers for existing products. Origin Wine's recent success is partly due to savvy consolidation – a pragmatic response to the realities of a browbeaten sector.
According to CEO Bernard Fontannaz: "The acquisition of Overhex Wines (effective 1 December 2024) was very much a complementary move for us – it strengthens our reach without creating overlap in terms of target audience. We acquired Overhex at a time when organic growth is hard to attain – the global wine market is shrinking, so for us to buck the trend and maintain single-digit growth is very positive. Therefore purchasing an established portfolio made strategic sense."
The ever-wryly Fontannaz has hedged his bets on consolidation as the best method of ensuring a sustainable future for Origin Wine in the coming period, using mergers to "build essential economies of scale."
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