Chapter 18: The Wine Business: Flashcards
What are the three key sectors of the wine business?
Production, Distribution, and Sales.
What are the three main types of wine producers?
Growers, Co-operatives, and Merchants/Negociants.
What is the role of a co-operative in wine production?
A group of growers pooling their resources to produce and sell wine collectively.
What is a négociant?
A wine merchant who buys grapes, must, or wine from growers to produce and sell under their own label.
What are the two main distribution channels for wine?
Direct-to-consumer and through intermediaries (e.g., wholesalers, retailers).
What is the ‘three-tier system’ in the United States?
A legal structure where producers sell to distributors, who sell to retailers, who sell to consumers.
What are on-trade and off-trade wine sales?
On-trade: Wine sold for consumption on premises (e.g., restaurants, bars).
Off-trade: Wine sold for consumption off premises (e.g., supermarkets, wine shops).
What factors influence the cost of wine production?
Grape growing, winemaking, aging, packaging, and transportation.
Why is packaging a significant cost in wine production?
Bottles, labels, closures, and boxes contribute to overall production costs.
What are the key factors that determine the price of wine?
Production costs, market demand, brand strength, and government taxes/duties.
What is bulk wine?
Wine transported in large containers and bottled closer to the final market to reduce costs.
What is premiumization in the wine market?
The trend of consumers purchasing higher-quality, more expensive wines.
What is the role of branding in the wine business?
Building consumer recognition and loyalty for specific producers or labels.
How do wine producers use geographic indications (GIs) to their advantage?
To promote the quality, authenticity, and heritage of their wines.
What are the benefits of direct-to-consumer wine sales for producers?
Higher profit margins, customer relationship building, and control over branding.
