The wine unicorns are (not) coming

Predictions about the post-pandemic environment are many and varied. Robert Joseph asks whether there will be a widespread return to the small and artisanal.

Photo by Annie Spratt on Unsplash
Photo by Annie Spratt on Unsplash

If we are to believe some commentators, the Brave New post-COVID-19 World in which we will be living will see a wholesale return to small, local, family-run, sustainable agriculture. We will be tired of buying online from Big Business and will rush to create relationships with real human beings.

Industry analysts Ecovia Intelligence say that “Organic Foods Getting a Coronavirus Boost”, and predict significant growth in the sales of organic and sustainable food in the wake of the pandemic. In the promotional material for their 2019 report, Ecovia point out that it “took over 15 years for global organic product sales to reach $50bn in 2008,” but only a decade for that figure to double. “With COVID-19 changing the way we shop and eat,” they say, “the next leap to $150bn could be within the next 5 years.”

Looking at recent growth in the US – from $21.3bn in 2009 to $47.9bn in 2018 – I’m not going to argue with this prediction. Sales may well go up, possibly even hitting 10 percent of the US market, compared to under six percent today.

Ten percent is not to be taken lightly. But then nor is the other 90 percent. Imagining that the line on the graph will keep rising until everything has turned green is, sadly, rather fanciful.

Living in the UK, I’ve watched celebrity chefs like Jamie Oliver passionately and repeatedly tell his television audience about the short and cruel life led by most of the chickens that are consumed here. And some consumers have voted with their shopping baskets, sidestepping the unfortunate caged birds in favour of the ones labelled as ‘free range’. According to the British Poultry Council, in 2017, free range chicken meat accounted for… three and a half percent of the total market. How to explain the other 96.5 percent? The British Poultry Council has an answer: “So while free-range readily falls into the category of something that ‘everyone knows’ is higher welfare, it has had remarkably limited success in translating consumer awareness into sales.”

If it’s tough getting people to switch to eating chickens that have lived happier lives, how do we expect them to make a similar change when it comes to an indulgence like wine which they already think of as a ‘natural’ product?

And how likely are most people to pay more for any food and drink during a global recession, when many may be living in fear of losing their job – if they haven’t already lost it?

But, even when times are tough, some people still have money to spend. Some of those who don’t, may be ready to make sacrifices in order to buy products that are a little better, or ethically preferable. Which is why I’m cautiously accepting Ecovia Intelligence’s optimistic projections.

What I’m far less convinced by is the notion that the return to greener fare will be accompanied by a huge renaissance of small farms and shops.

Unless there really is a very radical change in the economic system, in the short term, commerce of any kind will still be bound by some fairly basic rules, in much the same way that gravity dictates what happens when you let go of a bottle of fine Burgundy you’ve been holding above a marble floor.

First, there is convenience. During the time that most of us have been confined to our homes, we have become very used to not having to push trolleys around shops and heave bags in and out of our cars. Home delivery is easy, just as streaming music in Spotify is easier than going to a store and buying a CD.

And yes, some local wine merchants have benefitted from being able to ship bottles directly to new customers. But I’ll bet that supermarkets and bigger direct-sales businesses have done even better.

That’s because of the second immutable rule: economies of scale. It is easier and more efficient to farm one large field than several small ones. Twenty-five years ago, there were over 200,000 individual vineyard holdings in France. Today, according to Eurostat, that figure has dropped to 80,000. That number will fall a lot further, and estates will grow from the 10.5ha of 2015.

It is cheaper to ship large quantities of wine in bulk than pallets full of bottles in cartons. The costs of running a number of large retail stores are lower – per item sold – than selling the same product in a single outlet. Amazon’s drones and electric delivery vehicles will be more cost-efficient than the local wine shop assistant manager on his bicycle.

So, here, for what it’s worth, is what I see in my crystal ball. Yes, we’ll see a shift towards greener products, but it will be led by big businesses - as Ecovia Intelligence illustrates in its revelation that “Whole Foods Market, the world’s largest natural food retailer, has started limiting the number of its online grocery customers because of unprecedented demand.” So, people will buy sustainable and organic wine, but it will be produced by big wineries and supplied by companies like Tesco, Walmart and – if only through its Whole Foods subsidiary – Amazon.

And, of course, some people will buy estate-grown, organic and sustainable wines from small, local retailers, just like the natural wine fans who are doing their shopping today from these kinds of stores. In other words, it will be a small and fairly pricy market niche that commands a disproportionate amount of media attention.

The big brands, for good or ill, do not need to worry just yet.

Robert Joseph

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