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Buyer Driven or Producer Driven Nonetheless, the industry does seem to be facing a challenging period over the next few years. Supply growth will continue while demand growth will be harder to sustain. The industry is differentiated so some growers and wineries may do quite well but it is hard to see and easy road in the near future for the whole sector. It is important to note the difference between the supply driven grape grower and the demand driven wine producer. The wine industry is a demand driven market that is producer driven despite the importance of wine companies success marketing to the consumer. Wine is not and can not be made to the exact preference of the consumer although in the wine industry is seems as if the buyer is driving the market is it’s the branding of specific tastes and regulations from the growers that determine the tastes best suited for the consumer. Quality and Geography Prices of wine grapes in the premium prices region have so far remained immune to the glut facing the rest of the industry. For this to continue requires that the market for premium wine grapes be distinct from that for the lower prices grapes and the demand for the premium grapes will continue to expand rapidly. Industry practice and price movements suggest that wine demand does seem to be segmented by quality, which is associated mainly with where the grapes are produced. |
