Global Wine Wars 2009: Old versus New World
The wine industry experienced significance growth in the Christian era because competition for luxury and dynastical stature. Earlier, Europeans had plantations of vines to manufacture various grades of wine. With the establishment of a wine processing firm in France, production of wine grew tremendously. Because of favorable conditions in the country, France became a major producer of wine all over the world. France dominated the industry for centuries before other countries could match her production capacity. Notably, the thriving wine industry in France became the epicenter of economic, social and political issues in the country. One of the leading factors, which led to France’s successful wine production, was its proper climatic conditions and geographical features. Located at the heart of Europe, the country experienced as reliable rains and good weather conditions for the growth of grapes. Moreover, France had the right soils, which had matching nutrient requirements of grapes (Bartlett, 2009, p. 78). With naturally fertile soils, France got bumper harvest of grapes, which provided sufficient raw materials for wine production. This was its strength over potential competitors regionally and worldwide. Due to these conditions, France got experience in wine production, and supplied the finest wine brands in Europe and all over the world.
Its excellent and promising quality of produced wine further propelled France to dominate the industry. It heavily invested in quality wine production as compared to its competitors, making it an experienced player in the market. Additionally pioneers of wine production and promoters embraced the country’s passion for high quality wine. Thus, the industry not only gained dominance but also global recognition. Adoption of technology in wine production further contributed to France’s dominance in the industry. During this time, plants adopted new technology in mass production of bottles, manufacture of crock stoppers and pasteurization of crude wine. With new technology, it was possible to store processed wine for a longer time and meet the demand for wine in different markets. France also supplied wine to distant markets, creating a lucrative global market of which it was the main player. With innovation and relevant technology at hand, wine became stable as it could stay longer without going bad (Bartlett, 2009, p. 82).
France further thrived in wine production because of the government’s goodwill and support. The government of the day formulated and implemented policies, which ensured disciplined practices and high quality production. The government was in full control, making it easy to monitor wine production directly. Some of the measures, which the government implemented, were VDQS and AOS, which regulated wine production from setting up the vineyard to processing. In terms of wine processing, France rose to dominate the market because it had more competitive advantages than its competitors did. Some of these advantages included government support, new production technology, and suitable climatic conditions. By dominating the global market, French wine industry grew not only in Europe but also in the world.
It is worth noting that France faced a range of threats even though it had numerous competitive advantages in the market, as it was exposed to vulnerable conditions. For instance, there was disharmony between vineyards and production, which led to the disintegration of the entire process. Furthermore, unprecedented poor weather conditions, diseases and the high cost of the vineyard dented sales and French distribution system. High taxes and poor roads for transport further catalyzed the vulnerability of the sector. Consequently, the wine industry in France began experiencing logistical and operational challenges in the production process.
Because of the escalating challenges, France and other traditional wine producers started losing their dominance in the industry worldwide. For example, French system of production changed, resulting into high cost of vineyards in the country. Moreover, the continuous production of wine led to the depletion of vineyards. While this was the case, new world had begun using new land, which was more affordable than traditional French vineyards. The entry of New World Countries in the wine industry affected the performance of France and other traditional wine producers. These new countries gained momentum in the industry, with their lower prices, stemming from low operational costs. Which cheap land in these countries, it was also easier to acquire vineyards (Bartlett, 2009, p. 84). Appoint to note, most New World Countries adopted grape farming and applied new technology in processing. Growing grapes remained an extensive exercise because of irrigation techniques. With the introduction of mechanical harvesters, farmers adopted mechanized harvesting. There was high production because of the introduction of fertilizers and adoption of pruning methods. New World Countries also adopted on-site lab technology, which was key in carrying out analysis on proper grape farming and harvesting practices. As a result, they experienced low cost of production, causing a shift in the global wine market. With these developments, France and its affiliates lost their traditional global market share to the New World Countries, which capitalized on their already existing advantages to dominate the world market. This had negative impact on economies of former wine-producing giants.
The most appropriate advice for the head of French Wine Industry concerns regulatory measures and policy framework in processing and manufacturing. For example, AOC regulations are hurting the industry by offering non-competitive opportunities with the emergence of New World Countries, even though they allow production of finest wine in the global market. Thus, the head of French Wine Association must work towards lessening the application of AOC rules together with meticulous research and use of technology in wine production. The head of French Wine Association should further discourage total control of the industry by the government. Some of the government policies ought to be annulled because they undermine wine production process (Bartlett, 2009, p. 87).
In addition, the proprietor of Bordeaux Vineyard, which is a renowned producer of premium and super premium wines, must implement operational measures in order to take advantage of the situation. A good example is developing technology in production to allow new brands thus retaining customers. Bordeaux Vineyard must put into practice responsive attributes regarding new technology and production of new brands. They must however put weight on lucrative markets, which have more opportunities for better returns.
Notably, The Australian Wine industry is successful in implementing its operational measures. With its mission and vision, it is ahead of other competitors in the market. For instance, it has an achievable mission of being the world’s best producer of wine brands by 2015 through innovation and pricing. Nonetheless, it continues to struggle with issues of promotion, price and image design. To handle this, the association should invest in global marketing campaigns to enhance their public image and awareness of the Australian wine quality (Bartlett, 2009, p. 89). If it implements these measures, the association will overcome current threats and thrive in wine production and marketing.
On the other hand, Vineyard in Barossa should carry out intensive research on high quality wine production at a lower cost. They also consider other markets like Asia and China and not relying on US and British markets.
For the US wine industry, the head should focus on streamlining the production cost through mechanization like the Australian wine industry does. Moreover, the US should do away with its three-tier distribution system, as it is a threat to export products, while handing over cost advantage to other players. USA wine producers should also include middle segment in the whole production process. American wine agencies must develop brands and promotional strategies to reach the global markets.