While most would-be exporters to Europe tend to focus on the UK and Germany, some of the canniest are also turning their attention to the small country that lies between those two relative giants of the wine-drinking world.
A happy place
Despite its small population of just 17m, the Netherlands is an over-performer in a wide range of sectors. Dutch employees enjoy 20 percent more free time than their UK counterparts, but have 16 percent more purchasing power. This may contribute to the fact that when it comes to “life satisfaction”, according to the OECD (Organisation for Economic Co-operation and Development), the Netherlands ranks alongside New Zealand — at sixth and eighth respectively — and well ahead of the UK, USA and Germany. Rotterdam is the busiest port in Europe, partly thanks to Holland being the world’s second most valuable exporter of food, second only to the USA, which is 270 times its size. GNI — gross national income — is a relatively high $50,710.
As visitors to the country will have discovered, fluent English is widely spoken, along with a range of other languages, thanks to the presence of migrants from 178 countries who represent nearly 12 percent of the population. Despite some rumblings from right-wing politicians, the Netherlands is enthusiastic about its place as a multicultural player on the European scene. When it comes to foreign travel, the Dutch leave their country once per year on average and this, coupled with presence of those migrants, has helped to foster a wide range of cuisines, including Moroccan, Turkish and Surinamese.
As a wine importer, the Netherlands ranks ninth in the world, with annual shipments of $1bn. The accuracy of this figure is slightly questionable, when compared to the eighth and 10th largest — Switzerland and Belgium — because of the volumes of wine that are shipped in bulk for bottling here and re-exported to other markets. Annual consumption is 22 litres, which appears to have stabilised after a period of steady growth.
Hardly surprisingly, considering the Netherlands’ location, France and Germany are its largest wine suppliers, followed by Chile and Spain, which compete closely for third place, then Italy. Sixth-placed South Africa, which is often thought of as a major exporter to this market thanks to the two countries’ common language, has lost much of its share in recent years. However, the 10m litres it ships to the Netherlands are still twice the figure for Argentina or Australia, the next largest New World suppliers, according to 2014 statistics.
When it comes to style, according to consultant Ron Andes, former buyer for the wholesale business Ven and chairman of the Dutch Royal Union of Independent Wine & Liquor shops, things are changing. The Dutch used to be a red wine-drinking nation, but over the last few years have increasingly turned to white, which now sells in greater quantities. For Andes, the explanation lies in greater consumption of wine as a standalone beverage rather than with food. As in many other markets, rosé has had an explosive success in the Netherlands, as has sparkling wine.
“Over the past decade we first began to notice Prosecco as a rising star,” says Andes, “but since the Dutch government dropped the special tax for sparkling wine in 2017, a lot of nice-quality méthode champenoise is finding its way to the consumer.” Today, these wines are subject to the same excise duty of €88.36 per hl as still wines with an ABV of over 8.5 percent. Wines with lower alcoholic strength are dutiable at €44.24 per litre.
As recently as three years ago, Andes says, sparkling wine consumption was limited to New Year’s Eve and special occasions. Now it is drunk throughout the year. Producers wishing to exploit this trend should, however, note that 90 percent of the growth since 2009 has been in Italian wines.
Still or sparkling, it is increasingly helpful for a wine to have some “green” credentials. As Andes continues, consumers want to see “how you are working with respect for nature”. But there is great wariness of “greenwashing” and a readiness to question marketing claims.
The right approach
This is very much in line with the Dutch reputation for directness. Peter Kosten, export director of the Italian specialist business, The Wine People, makes the point very clearly. “We call a spade a spade. Black is black and white is white. We don’t do grey.” Misunderstanding this is often a handicap for would-be exporters who come in with high prices in the expectation of bargaining downwards. “This can be a big mistake,” says Kosten. “Buyers want to know how much you really want, at the beginning of the discussion.”
Historically, any mention of price in the context of the Netherlands has usually included a reference to “Dutch tight-fistedness”. As Andes says: “Especially in the off-trade market, it’s all about prices. If you are not prepared to seriously cut your price, you can only succeed if you are able to create a highly desired brand. But Dutch people are not really into brands because supermarkets create their own.”
While it is true that there is still a huge reluctance to spend more than €4.50 for a retail bottle of wine, there is some evidence of trading up across the board; Andes notes that this is not benefiting the industry as a whole. “Dutch are willing to pay more for quality wines from Italy but less for French wines,” he says. Similarly, according to Euromonitor, Dutch consumers stand apart from most others in their readiness to dig deeper in their pockets when buying a white than a red. Only two percent of red wines sell for more than €6.50 through the grocery channels that represent 80 percent of the off-trade, while the figure for white is three times as high.
“The main issue for anyone approaching the Netherlands” is the small number of gatekeepers, according to Marco Tiggelman, former representative of Wine Australia and now a consultant and distributor of his own Bucket wine brand. “If you are not familiar with the market, it is very hard to get in,” he says and Andes agrees: “In the Netherlands there are hundreds of importers, but the five biggest are good for 80 percent of all imports. If you are trying to enter the Dutch on-trade market, you better find yourself a small to medium size importer, broker or agent, who will spread your message.”
Before doing this, a producer has to decide where they want the wines to be sold. As Andes notes, the choice between the off- and on-trade is crucial because “it will be impossible to sell in both trade channels”. And, as elsewhere, some importers are far more focused on one sector than the other.
The challenge of the Dutch off-trade lies in the dominance of a small number of big companies. The giant Ahold owns two of the market’s most important retailers Albert Heijn supermarkets, with 884 stores, and 601 specialists Gall & Gall shops, and controls more than 35 percent of the market. Next comes the buying group Superunie, which includes the Hoogvliet, Sligro, Coop, Deen, Jan Linders, Plus and Spar chains, which collectively represents around 30 percent, and Jumbo with just under 18 percent.
According to 2016 figures, Lidl and Aldi have 10.3 percent and seven percent of the market respectively, with the former chain having shown the greatest growth in recent years. The growth of both chains, however, appear to have plateaued.
To brand or not to brand
Throughout the off-trade, private and own label is strong, representing more than a third of the market. Historically — again reflecting the Dutch preference for straightforwardness — these products tended to have utilitarian packaging. More recently, though, there has been an evolution to more eye-catching designs and this is expected to help boost growth in the sector. Would-be suppliers of high volumes to the off-trade are advised to be open to the idea of delivering private label to a big retailer as part of a package with branded wines.
The strength of individual brands in the Netherlands is very weak, however, with Lindeman’s, the market leader, enjoying a share of just two percent. According to analyst Wine Intelligence, Dutch brand awareness is “quite high” but consumers are circumspect about paying more for a brand when an own-label does a good enough job.
Franchising is a strong model in Dutch retail and the franchisees that run Gall & Gall shops are given broad freedom to stock the wines they think are most appropriate from the Ahold range. The regime for Jumbo franchisees is even looser, with the allowance to stock limited numbers of wines from other suppliers and those who take the trouble to talk to the shop managers directly can enjoy significantly larger sales. This is even more true in the independent retail sector where, as Andes says “it’s legal to organise tastings where specialists called ‘vinologists’ unveil the difference between €3.35 and €6.50 wines”.
In the on-trade, the Netherlands boasts an impressive array of Michelin-starred restaurants, as well as a growing number of casual dining outlets that take wine seriously. For many producers, this sector is the most attractive but inevitably it comes with the challenge of catching — and even more crucially, holding — the attention of fashion-conscious sommeliers. As Tiggelman, who has worked for generic organisations such as Wines of Moldova, says, the restaurant sector can offer a good way to introduce new styles and regions to the market. It is certainly the on-trade that is largely responsible for the buzz surrounding “natural” wines and wines from countries such as Turkey and Georgia.
The Netherlands boasts a fairly vibrant trade press, led by Drinks Slijtersvakblad and Proefschrift Jaargids Wijn, but the consumer-focused media is considered to be relatively weak. Most local professionals agree that Harold Hamersma of the Handelsblad newspaper has the greatest influence, followed by Ronald de Groot, founder of the 5,000-subscriber Wijnpers magazine, and Jan van Lissum, editor and editor-in-chief of the digital review www.thewinesite.nl and Gault & Millau.
The confident command of English enjoyed by younger Dutch consumers most likely to buy premium and super-premium wine means that many of them are as likely to follow US and British critics than Dutch ones.