What does the research say?

Companies wanting to venture into new markets no longer have to fly blind. Barnaby Eales looks at some of the market data services available to the wine industry.

Richard Halstead,  COO,  Wine Intelligence
Richard Halstead, COO, Wine Intelligence, Photo: Rob Lawson

Wine Intelligence, an international market research company based in London, has a network of analysts in multiple markets and offices in Australia, the US, Brazil, South Africa, Germany, France, Italy and, since 2017, Spain. Wine Intelligence sells a range of wine market research reports and provides consultancy services on business and export markets and strategies, brand positioning and mergers and acquisitions. 

Its main clients are large wine companies, some of which pay up to five-figure sums for multi-market reports. However, the company says it caters for SME wine producers, offering discounts and a small business rate for its syndicated research reports, whose prices start at £400.00 ($524.00). 

Richard Halstead, COO and co-founder of Wine Intelligence, says the increased power of computer-based analytics and the falling price of software are making it easier to collect online data. “We are now seeing the power of the data revolution coming to our sector,” he says.

A major source of data for Wine Intelligence is its online consumer survey, Vinitrac, which is conducted in 32 countries via polling companies such as YouGov and TNS. Data in 90% of cases comes from surveys completed by 1,000 people in each country, a sample base that gives a plus or minus 3% margin of error. “Ordinary members of the public” who drink wine once a month are paid in the form of vouchers to participate. In China, survey participants are wine drinkers who consume imported wine twice a year. 

In some markets, including Switzerland, the survey is carried out less than once a year, and Wine Intelligence would like to increase the frequency of surveys to ensure clients are kept up to date with market trends. 

Branding strategy is one of its growth areas. “One of the key developments of the past 10 years in wine market research and data is the extent to which clients are now understanding the power of branding in all its forms, and the challenges of building effective relationships with consumers,” Halstead says. “This is translating into a growing demand for our brand health measurement services, brand profiling services, and related areas like packaging research and consumer needs analysis.” 

Wine Intelligence says analysis from its data reports allows wine businesses to see not just market opportunities but what they should not do in any given market. Ultimately, the company says its data insights help companies make better business decisions.

Uncertainties surrounding the international world order could pose a threat to market research data, Halstead says. “Trade deals and associated legislative changes do have a profound long-run effect on certain markets. When such changes are afoot, it is useful to have timely and up-to-date insights. We have never seen anything like the kind of erratic behaviour we are currently witnessing from the President of the United States.” 

It’s difficult, he says, to understand what the real world trade policy consequences might be of the various announcements and threats emanating from the President’s Twitter account. “Clearly an annual report is not going to cope with a seismic shift in trade policy, for instance if China suddenly banned US wine imports, or if the US withdrew from the WTO (which might cause the disintegration of the WTO),” he says. “It may well be that in those circumstances, given the profound real-world consequences, we would need to update our model and report.”

One of the main challenges for wine market researchers lies in the complex nature of wine with its many diverse product attributes and variables. “The basic choice variables in wine are style (still/sparkling and points in between), colour, price, country, region, sub-region, varietal/varietal combination, occasion and promotional offer,” Halstead says, adding that within some variables, such as varietal or country, there can be 20-plus choices. “And that’s before we introduce the taste variable, which is clearly very important, but nigh on impossible (yet) to measure accurately. We are still trying to figure out the impact of these variables.” 

Big data in action

Online search engine and price comparison site Wine-Searcher says its niche is premium and super-premium wine. Established in New Zealand in 1999, Wine-Searcher is a specialist in retail demand and supply and has been selling data for almost 20 years. To develop market intelligence, it packages up big data from consumer searches made by 5m regular users, and pricing and availability data from stores. 

Last year, it launched standardised user Distribution Reports for wine producers and Demand and Competitor Reports for wine retailers. The new data reports are priced from $500.00 and up, and provide international pricing strategy and supply and demand data on grape variety, price and location, allowing the wine trade to identify distributors and market trends. “Wine retailers want to know what competitors are stocking and at what price. Wineries are looking for new markets and like to know what price their wine is retailing for in all markets,” says Suzanne Kendrick, Wine-Searcher’s head of global growth. “We are able to compare country by country.”

Wine-Searcher’s expansion is the result of an increase in demand for the wealth of data now available, Kendrick says. “There is now more data available at different parts of the wine-buying funnel. Wine-Searcher data shows activity before purchase. Wine-Searcher is at the top of the funnel.” She says the company’s users are mainly serious wine buyers and the trade. “Wine-Searcher sees the trends from the activity of sommeliers, influencers and wine experts – those that influence their friends.”  

Data obtained from Wine-Searcher users includes IP addresses and location. The search engine itself now lists more than 9.7m drinks and more than 90,000 wine retailers, auction houses, wholesalers and wine producers from 157 countries, mainly from the US, France and Italy. It obtains retail data globally – including in markets such as China, Thailand and India – which Kendrick says is vital for exporters, which tend to lose track of retail prices in different markets. “Wine producers stop paying attention to the market after a while. It is really important for exporters to have international prices straight. For instance, a wine selling for $20.00 in New Zealand can be sold for $100.00 in Australia.” 

Wine-Searcher says its retail data allows wine producers to identify price gouging and dumping. “Many wineries have guard rails and want to be on the alert for retailers who are discounting below the agreed prices,” Kendrick says.

Describing Wine-Searcher as the “secret weapon of wine companies”, she says:
“We can see increases in the number of searches as categories become important. Currently, for example, we are seeing an interest in cannabis drinks and wine in cans.”  Such data allows wineries to gain a deep understanding of what is happening at the retail level. “Is the wine easy to buy? Where from? And At what price?” says Kendrick. “Our quantitative data is based on what people really do. Wine-Searcher data comes from five million wine experts the world over. What wines do they actually search for?  Search activity is an excellent indicator of demand for wine.”

Consumer research companies

Kantar Group, the London-based data and market research subsidiary of advertising and PR multinational WPP, runs Kantar Worldpanel, a consumer panel that tracks end-user wine purchasing habits by paying consumers to upload receipts from wine purchases or to log consumption data onto an app.

The group’s consulting branch, Kantar Consulting, now conducts primary research using virtual reality and augmented reality to help wine brands to position themselves in retail markets. This year, Kantar Consulting launched Perfect Category, a technology which it says combines the use of big data and virtual reality to enable brand owners and retailers to design physical retail environments and simultaneously forecast their revenue impact, as well as selling on the designs.

Edmund Gemmell, Kantar Group’s global head of brand and communications, says company clients are “typically large wine and drinks companies” including Diageo, but declines to comment or provide any information including the type of data that customers ask Kantar to provide.

Euromonitor, another global market research company based in London, offers wine data insights via 10 datasets for subscribers which include such variables as volume and value category sizes for both the on- and off-trades, five-year forecasts across 100 markets, and pricing information across 100 markets.

Like most of the companies approached for this article, Euromonitor declined to answer most questions. However, in a statement which mentioned methodology and forecasting, it said its alcoholic drinks system allows clients to: “align corporate strategy with the outlook and growth potential of the market”; benchmark and track competitors; analyse supply-side trends, production and trade in raw materials; and gain a detailed analysis of packaging and ingredients and consumer insights.

Global Data (which owns Datamonitor Consumer), the IPSOS Group and financial institutions KPMG and Rabobank all declined to provide any information on their services.

A number of government export agencies and national wine bodies also offer market intelligence, some of which is widely available. Business France, for example, offers market research reports on wine export markets for €80.00 ($92.00), while the Centre for the Promotion of Imports from developing Countries (CBI), part of the Ministry of Foreign Affairs of the Netherlands, offers a wealth of wine export market data. This is freely available online.

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