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With a population of barely more than 10 million, tiny Belgium – that many foreigners can barely place on a map - is the fifth largest wine importing country in the world. At least 30% of the population, or 2.5m people, drink wine at least once a week. And the number of those consuming wine – 80% - is not only nearly equal to that of those drinking beer, but growing. While beer consumption fell by 15% over the last generation, wine rose by half.
Although its market share is lower than it was in 1984, when red wines accounted for 80% of wines sales, compared to only 58% today, most Belgians still drink mainly red wine; but sales of both white wine and rosé are rising. This change in both volume and quality corresponds to changes in outlook. Today’s consumers are more open, more widely travelled, have more information about wine, and are more quality oriented. But the new Belgian consumers are also divided in their minds. Although they are more adventurous, they also seek reassurance – and are far less loyal to brands or regions.
A divided market
The Belgian wine market does not really exist as such, as there are big discrepancies between the Dutch speaking north, where 55% of the population live, and the French speaking south, which includes Brussels. While both populations are each now responsible for half of total consumption, the southerners, who drink more at home, consume no more than they did a generation ago. The enormous growth in total consumption has come from the north, which once accounted for less that a third of total wine sales. Even the types of wines consumed vary between the two parts of Belgium. Red wines, for example, represent 62% of the total volume consumption in the South, but only 56% in the North. That may not seem like much, but given total consumption, it does affect the shelf space in supermarkets.
What do the Belgians drink?
At 64%, France is by far Belgium’s largest supplier in terms of volume, though this has fallen from the 1990s high of more than 70%. Italy comes in second place, followed by Spain and Chile, with Germany, Australia and South Africa each accounting for less than 4% of the market. Languedoc-Roussillon on its own sells as much wine to Belgium as either Chile or Spain alone. Yet those latter two countries exemplify the changing face of the Belgian market: Spain already held 5% of the market in 1990s, but Chile, now also at 5%, was then nowhere to be seen on the charts. Today, they are both important players. The same applies, more or less, to South Africa and Australia, as New World wine represented less than 1% of sales in 1995. In 2006, they accounted for 8%.
There are other regional differences in what the Belgians drink. The mainly French-speaking southern region of Wallonia and the bi-lingual capital Brussels consume 57% of all French wines sold in Belgium; the northern, Dutch-speaking region of Flanders, with less concrete ties to France, |
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consumes 73% of New World wines. These figures, though, don’t tell the whole story, because a lot of wines are bought directly from abroad by cunning wine lovers hoping to circumvent import duties, additional margins and high value added taxes. The neighbouring and virtually tax-free Grand Duchy of Luxembourg is a very appealing place to purchase wines, as are the nearby regions of Alsace, Champagne, Burgundy and, to a lesser extent, the Loire and the German Mosel. Another source of less expensive wine is the dense network of hypermarkets on the French border, especially from the Auchan outlet that’s between Lille and Maubeuge.
There are no firm figures, but this ‘wine evasion’ could represent as much as 10% of the market. The practice also seems to be increasing, because restaurant owners and wine retailers also use these channels. There are also the unofficial wine buying clubs that flourish among colleagues in big companies. One figure is certain: nobody in Belgium lives more than 65 km from a foreign country, and high excise duties and taxes are good motives for crossing borders.
Domestic sales
Belgian food retailers have the biggest share of the domestic market. Each year they move roughly 200m bottles of wine, representing 65% of all wine sales in the country. There are also the well-known hypermarkets and supermarkets, which sell around 145m bottles. The range of wines to be found in a Belgian supermarket – between 450 and 500 – is impressive, especially when compared to what can be found in their Dutch or French counterparts. Then there are hard discounters (50m), convenience outlets and off-license stores.
What does a bottle of wine cost?
Prices vary considerably depending on the type of wine and where it’s sold. But the average selling price, when all channels and all wines are put together, is €3 per 75cl bottle. For more information, see Table 3. There are clearly large discrepancies in price, depending on the origin of the wine: 89% of wine from Spain and Italy
retails for under €4. Only 13% of all Chilean wines are sold above €4 per bottle, yet this is where 31% of Australian wines and 48% of Bordeaux wines can be found. Before the euro was introduced, 100BF (€2.5/$3.54) and 200BF were the main psychological hurdles. They have now been replaced with the €5 and €10 barriers. Still, less than 2% of wines consumed in Belgium are sold for €12.50 or more, which – along with the average price of merely €3 per bottle - hardly suggests an aspirational market.
When asked how they buy wines, Belgian consumers usually answer that origin is most important, followed by name recognition, with price coming last. (Who doesn’t like to pose as an expert?) But in reality, price is more
important than people will admit, as the success of the hard discounter sales has proved. And half of buying decisions are made in store.
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What about bottling?
Belgian retailers have always been big bottlers. In the 1960s, some Bordeaux Grand Crus were still being Belgian-bottled, but over the years, it has become increasingly difficult for retailers to find French high quality estates willing to sell in bulk. At those price points, the concept of estate bottled is firmly established. Other operators, however, are more than willing, and Pays d’Oc cooperatives, Italian shippers or Chilean wineries supply huge quantities of bulk wines that are then bottled in glass or bag-in-box. Although the bag-in-box is growing in popularity, cork is still the main closure found in Belgium, According to Eric Van Rysselberghe, buyer at the large Colruyt chain of supermarkets, bag-in-box now represents roughly 40% of the volume sold there. Overall, though, bag-in-box represents less than 10% of all Belgian wine sales. The screwcap is slowly emerging in the wake of the widespread use of that closure in Australian and New Zealand offerings, though retailers are still sceptical about it. The Delhaize Group of supermarkets has recently advocated screwcap use in its stores, explaining to customers why it has been introduced, but this is an isolated example. Most buyers are convinced by the technical side, but confess that customers are still not attracted by this closure, although the new generation of wine drinkers is more open to it.
What about brands?
Belgium is definitely not a market for branded wine. Retailers, who make good margins out of wine, are not willing to lose those margins by competing on brands. They prefer to sell different wines from each appellation or segment and can justify the expense more easily when the estate name is not the same. To accommodate this, the big international brands are sold only through specific retailers. For instance, Marques de Caceres is only on sale at Carrefour, while you will only find Codorniu at Delhaize. There are some exceptions, such as Mateus and Listel in the rosé section, Torres, some Bordeaux shippers brands such as Malesan, Cordier and Mouton Cadet and, more recently, Chilean and Australian brands like Gato Negro or Jacob’s Creek; but even these brands are not to be found at all retailers. This could change in the future, but no one can predict how fast. There is one exception to this: bubbles. The big Champagne brands can be found everywhere. Laurent Perrier and Moët & Chandon are the most prominent, along with sparkling brands such as Bernard Massard, from nearby Luxembourg, the two big Cava producers Freixenet and Codorniu, along with Jaillance and Sieur d’Arques.
Future trends
Flemish consumption is likely to grow further, favouring not just New World wines, but also higher priced wines. The fact that the Belgian population is ageing is, many say, not currently a limiting factor. On the contrary, households under 40 years represent only 28% of the total wine consumption, while those above 40 years drink the other 72%. As in France, this may be a harbinger of problems to come. The share of New World wines in the total volume market will continue to grow. There will, however, be resistance from the traditional suppliers such as France, for one, whose vins de pays are already major competitors against Chilean, Australian or South African wines. Spanish wines also offer good value for money and are seen as a good
compromise between adventure and tradition. Last but not least, branded wines will thrive. Retailers who have opened the door to Penfolds, Hardys and Undurraga won’t be able to justify barring Malesan, Chamarré, Antinori and others from their shelves. Overall, the Belgians can look forward to an even more dynamic market.
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