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The French wine market

MERCAT DEL VI A FRANÇA BIN 148x3001. General Information

Figures from 2014 place France is the third ranked producer of wine in the EU at 46’2 m Hl, 15’3% of the total area production. By type of wine, France leads the field in the production of PDO wines: France: 19’8 m Hl; Spain 16’2 m Hl. France ranks second behind the US in consumption per head of wine.

By value, France is far and away the leading exporter, with exports running at € 7,673’5 million which far outstrips Italy’s € 5,087’4 million. Nevertheless, as far as volume is concerned, France is still well behind Spain and Italy with 19’8 million Hl which clearly shows that the average price of a French wine is far higher than that of its competitors. Figures published in September of 2014 put this at € 5’30 per litre which is the highest producers from all over the world. The difference can be seen clearly when comparing France’s closest rivals: Italy (€2’50 per litre) and Spain (€1’16 per litre).

In general, it is very difficult to export wines to France, a country married to its own varieties and PDOs. There is very little foreign wine in France when compared to other countries.

Nevertheless, France is the country to which Spain exports the largest volumes. The inter-annual figures up to October 2014 register a volume of 493’6 million litres, a 36’3% increase of the October 2013 inter-annual figures. However, these quantities are marred by the low prices at which this wine is sold: €0’50/litre with a tendency to decrease. This means that it only ranks third in value as an export market: €245’8 million.

It is worth noting that the greater part of these figures refer to bulk supplies which the large bottling firms in France buy to sell on the home market or for export.

B. French System of Quality Classification

Depending on the quality of a wine, the French will classify it as:

A. Vins AOP: Wines with a PDO. Since August 2009 this category encompasses the old categories of AOC (Controlled Denomination of Origin) and VQPRD (Quality Wines Produced in a Determined Region).

B. Vins IGP: (Protected Denomination of Origin) formerly: “Vins du pays”.

C. Vans sans IG (Denomination of Origin) Formerly. “Vins du table”.

C. Tendencies and Consumer Habits

Consumption is clearly lead by red wines – 54%; although rosé has increased spectacularly over the last two years by 160%. The 76’8 million cases sold in 2014 makes France the largest consumer of rosé in the world. This is twice the consumption of whites which are only 17%. The market for sparkling wine continues to grow ranking France second in the world after Germany.

Worthy of note is the large increase in the consumption of IGP wines and “bag-in-box”.

D. Market/Consumer Requirements

Notwithstanding the fact that Spanish wine is, generally, sold in bulk may be seen as a negative point for the image of Spanish win in France, the fact that foreign wines have such a small market in general in the country, we can say that Spanish wines are reasonably well received by the French consumer. The potential for Spanish wine producers in France consists of maintaining its reputation as being modern and traditional at the same time. Spanish wine benefits from the image of the country’s long tradition in wine production and the curiosity of the French for Spanish cuisine including tapas.

One of the principal advantages of Spanish wine are the grape varieties from which it is produced. A number of these grapes are not to be found anywhere else in the world: mencia, tempranillo, albariño, garnacha, bobal, etc……..). It is this variety that makes Spanish wines especially attractive and their factor of distinction.

On the other hand, it is essential to be able to offer a quality product. Wines should come with a history and tradition behind them and a distinctive taste. The amateur consumers and real connoisseurs of Spanish wines are looking for medium to high quality wines from small producers who can offer wines with a strong personality and that stand out from their rivals that are produced in larger quantities. (Region, varieties, production processes, etc.)

Spain’s largest competitor is Italy which also benefits from a rich assortment of excellent native grape varieties. Nevertheless, it is very difficult to sell the Italian wines as they tend to be expensive. Spanish wines stand out for their excellent price/quality relationship.

E. Distribution

According to data published recently, sales of wine for home consumption are made through 5 channels:

Large supermarket chains: 81’2%

Specialised off-licences (5’3%) of which France has some 1,700. The majority of these are encompassed by three large chains: Nicolas (750 PoS), Inter Caves (224 PoS) and Cavavin (120 PoS).

Direct sales from producers (clearly in decline over recent years).

On-line sales (residual)

Gourmet Stores (currently residual but of increasing importance.)

Wine only represents 20% of the food service outlets.

Based on our own experience and independent studies, we are overwhelmingly in favour of Spanish wines (especially from small and medium producers) looking for markets through the importers of Spanish wine, for home and food service sales and distributors of gourmet produce, please see more details in “Recommendations”.

E. Possible Hurdles

As France is a member of the EU there are no barriers as such (quotas, duties, etc.) Nonetheless, there are a number of factors that, whilst not forming part of these traditional barriers can, or may, occur as commercial hurdles that Spanish companies will have to overcome:

  • Replace previous suppliers by offering better prices and conditions and having an impeccable reputation.
  • Comply with all quality requirements of the market.
  • Obtain guaranteed payments by the supplier.
  • Use French in all communications.
  • Comply with current French labelling requirements.
  • Have a good sales pitch.
  • Make sure logistics are well under control.
  • Occupy market niches.

F. Recommendations

In the first place, we would recommend exporting to France through an importer of Spanish wine or a distributor to gourmet outlets who is well introduced in the market. These should, preferably work with traditional channels (off-licences) or the food service sector. Getting into the large supermarkets chains is extremely complicated for small and medium sized producers. These large chains are more than well supplied by local producers who can cover all the needs of quality, quantity and price.

The exporter should offer efficient back-up and support to the distributor in function of the difficulties outlined above. This support may be in the form of samples, tastings and promotional activities for the consumer.

Taking into account the characteristics of the French market, a potential niche for Spanish wines is those of medium/high quality produced from native grape varieties since the French have covered the rest of the categories. It is the red varieties that have, in principle, the easiest chance of acceptance. Finally it would be well worth the effort to have a range of ecological wines as this is, in general, a growing market and one which still needs more suppliers.

The following is a list of possible importers/distributors:

  • Agriberia
  • Comptoir France Europe
  • Groupe Elmano
  • Barrère et Capdeville
  • Vin du Monde
  • Guasch et fils.

jG. Practical information: Fairs.

VINEXPO (www.vinexpo.fr) the leading exhibition for wines and alcoholic beverages in the world held every two years in Bordeaux.

VINISUD (www.vinisud.org) regional professional fair featuring wines from the Mediterranean area. Hold every two years in Montpellier. The next fair will be held from 22nd to 24th February 2016.

SIAL (www.sial.fr) This is also a bi-annual event. It is the second most important food and beverages exhibition in the world and is held in Paris. The next edition is scheduled for 16th to 20th October 2016

SOURCES:

EL mercado del vino en Francia, ICEX, febrero 2015
Vinos de España, ICEX, 2014

Both these sources have been complemented by data and our personal experiences during ITC’s more than 20 years advising SMEs.