Hungary has traditionally been a very conservative, closed market where most Hungarians drank domestic wine. This has been changing in the last ten to fifteen years: international wines are being imported and every segment of the market is growing. Hard discount chains (e.g. Lidl, Aldi and Tesco) are importing entry-level Chilean and Argentinean wines while in the premium segment there is a slow but steady growth as well. Probably the only exception is sparkling wines, especially Champagne, Prosecco and Cava, where there’s an elevated growth. I’ve heard that sale numbers have doubled in the last eight to ten years.
Of course, with heightened growth comes heightened competition. While ten years ago most Hungarian premium buyers went for high-end Hungarian brands, recently interest in Old World wine regions has grown considerably, creating a more competitive landscape. Also, while the €3.00 to €4.00 ($3.38 to $4.50) shelf price has been growing since we joined the EU in 2004, recently the semi-premium (€8.00 to €12.00) wines of New Zealand and Chile are experiencing considerable growth. However, much of the import market is dominated by the hard discount chains; for super premium brands, specialised wine shops are the key channel. Hungarian gastronomy is still mostly about Hungarian wine, partly because of tourists’ need for indigenous varieties, partly because local consumers prefer domestic wines. Imported wines are not a big part of the on-trade. Yet while Hungary is not at the forefront of international trends, I would consider it a dynamic market, following trends with a latency of two to three years. So far every major recent trend (sparkling wines, organic, natural wines) has arrived in Hungary as well.
Geographically, there’s a very strong concentration of interest in wine in Budapest, with growing demand in tier-two cities (Debrecen, Szeged, Győr, Kecskemét, Pécs). The area around Lake Balaton is very seasonal, with peak uptake in the summer, especially for locally produced wines and, surprisingly, Champagne. There are large international companies settling around major cities (e.g. Audi in Győr, Mercedes-Benz in Kecskemét), and so consumer spending is naturally on the rise. But as with all developing markets, investing in consumer education is vital. The general awareness of imported wine styles is very low, and most consumers will rarely, if ever pay more than €10.00 for a bottle of wine. Famous regions such as Rioja may find that sales continue to be dominated by cheaper wines for the time being.
sales manager, Gagliole
We entered the Swedish market in August 2017, just to test the water. Monopoly markets are notoriously challenging to work with, but thus far Sweden is showing much promise for Gagliole. Over the past year, I’ve noticed a growing interest in high-level wines in Sweden – knowledge and the thirst for knowledge is improving quite a lot. The market is growing at the rate we were expecting, and we look forward to improving the sales of our wines in this country.
To date, I would say that the on-trade offers a better positioning for premium brands, where no monopoly on distribution exists. Retail is doing quite well, but I would say that probably the restaurant sector is developing a little faster than the off-trade. But overall, Sweden is a very attractive market as, in my opinion, it is dynamic and perceptive at the same time. In essence, if a winery is able to communicate the right message to the end customer, it will be possible to achieve amazing results and to gain a lot of interest in a relatively short amount of time. Large urban centres are still playing a fundamental role in the wine business, but there are also a lot of smaller centres which have room to grow.
And so without any hesitation, I can say that Sweden is a very healthy market for imported wine. I honestly don’t see any major risks associated with doing business in Sweden – corruption is very low – but any brand that would like to enter the Swedish market should, in my opinion, find a reliable partner to deal with and plan a successful strategy to present their wines. This applies not only to restaurants, bars and retail but also to the final customer. The significant demand from the final consumer is waiting to be harnessed; you just have to reach out to them in this challenging and crowded Swedish monopoly.
export manager, Viña Montes
Montes started exporting to Guam [in the Pacific] in 2015. We were looking for an importer in the territory – a business friend recommended MidPac Guam as a good fit for us. It took over a year from the initial discussion for us to reach a point where Montes wines were available in Guam. As a global brand, we want to be present in as many countries as possible and Guam is a key destination for some of our clients in Asia and Oceania. The good news is that the market is growing as tourism is the island’s main source of income – visitor numbers continue to rise. The wine scene is becoming more varied and sophisticated; when we entered the market in 2015, only low-level wines were available. However, one increasingly sees premium and super premium wines available in Guam. Overall sales have tripled in the past nine years for Chilean wine, and so growth has been strong. The main incentive for any imported brand is the vibrant tourism industry (Guam received 1.56 million tourists in 2017), which attracts high-spenders from South Korea, Japan and USA, which are key markets for Montes. Therefore, it was important for us to be present in this market and offer our customers Montes wines.
Today all areas of the market are growing; duty-free shops are unsurprisingly a big driver of growth in a tourism-dependent economy. Of course, it’s a small market yet there is much to like about Guam – famous brands of beer, wine and spirits are available across the island, but it is still a small portfolio of selected brands. The largest three cities hold 37 per cent of the population (64,000 people), the next five cities hold about 7,300 people each, so as you’d expect the market is dominated by large urban centres. However, like any market there are risks involved: make sure you don’t work with a small or mid-sized distributor who can only do business in the smaller cities of Guam. In addition, considering that Guam’s livelihood also emanates from the operation of the island as a US military base, we’d recommend an importer that has access to both civilian (locals and tourists) and military customers on the island.
European market manager
Villa Maria, New Zealand
Doing business in Bulgaria is an interesting and challenging proposition; the market for imported wine is growing, especially the sparkling category, with Prosecco unsurprisingly dominating the majority of sales. Yet the market is still dominated by Bulgarian wines, which are generally much more affordable. That being said, Bulgarians enjoy learning more about wine than say five years ago, and are more open to tasting and buying wines from other countries. They have a nose for quality and are willing to pay for it. They are also very brand loyal. Moreover, the number of fine dining restaurants has increased in recent years, which is obviously a good destination for premium wines like Villa Maria. Therefore, I’m very happy with the way the market is developing; Villa Maria is growing in all channels. Retail accounts for the vast majority of wines sales in Bulgaria, but it is very promotion driven.
I would add that there are contradictions inherent to the market. Even though Bulgarians like to drink their own wines (especially reds), you see more and more consumers who are open to New Zealand wines. Bulgarian waiters are very well educated; in terms of marketing they are ahead of other European markets. They really know how to build a brand. Also, the market is not solely dominated by the large urban centres such as Sofia. There are still plenty of supermarkets, restaurants and wine stores that are not located in these large centres. The difficulty is gaining a foothold in this market – if there are already a few established brands then it will be tough to advance your position due to fierce brand loyalty. Make sure you are with a good distributor who understands the market and go for a long-term strategy. Don’t expect huge volumes in the first years as it takes time to build a brand in this market. But once people get to know your brand you will have customers for life.