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Dressler, M. Destination-Centric Wine Exports. Encyclopedia. Available online: https://encyclopedia.pub/entry/46821 (accessed on 04 May 2024).
Dressler M. Destination-Centric Wine Exports. Encyclopedia. Available at: https://encyclopedia.pub/entry/46821. Accessed May 04, 2024.
Dressler, Marc. "Destination-Centric Wine Exports" Encyclopedia, https://encyclopedia.pub/entry/46821 (accessed May 04, 2024).
Dressler, M. (2023, July 14). Destination-Centric Wine Exports. In Encyclopedia. https://encyclopedia.pub/entry/46821
Dressler, Marc. "Destination-Centric Wine Exports." Encyclopedia. Web. 14 July, 2023.
Destination-Centric Wine Exports
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This entry is adapted from the peer-reviewed paper 10.3390/beverages9030055

With more than 40% of produced wine crossing borders, wine represents a truly global beverage. Wine export serves as a sales lever, especially for producers where home wine consumption diminishes but the global wine business is highly competitive. The literature tells that in competitive market innovation, customer centrism, and increasing sustainability are key. Wine export offerings need to meet the customer’s desires in the targeted foreign destinations. German wine providers have to catch-up in regard to destination-specific preferences so they can offer adaptation or suffer a competitive disadvantage in sustainability positioning.

innovation wine export trade providers

1. Introduction

Export serves as a strategic growth option to (1) escape stagnating domestic markets and (2) diversify risks by spreading sales over several different destinations [1][2]. Exports are particularly relevant for agricultural goods [3]. Agricultural products account for more than one-fifth of world trade [4], especially since global wine trade has developed dynamically [5][6][7][8][9][10]. In addition to cost advantages, which are traditionally decisive for exports, vegetation conditions, and country-specific product characteristics nurture international demand for wine. Wine production requires climatic conditions and the “terroir” concept explains that unique wines can only be produced in certain local conditions [11][12]. As a result, more than 40% of the worldwide wine production is exported [5][6]. This corresponds to a value of goods of over 38 billion euros. Globalization of the wine market also affects products and production illustrated by international wine styles and global wine brands [13][14][15]. Despite all global caesuras (such as COVID-19-pandemic, climate change, and escalating international conflicts), global trade feeds the world and wine economy [16][17][18][19] but faces increasing managerial challenges as reflected in the dependence on international supply chains [20][21]. The globalization of food is evident in the feared consequences of the war in Ukraine that a famine in Africa or other contents can follow the production and transport shortfalls caused by the war [22]. In addition, sustainability is of rising importance in the wine trade [23][24][25] and promises to be a lever in experiential marketing to increase willingness to pay [26].
German wine did not profit from the growth in international wine trade as wine export halved since 2000 [27][28]. German wine producers are reliable trade partners, but they lack performance in regard to destination-tailored wine offerings and have a competitive disadvantage concerning sustainability positioning [29][30][31][32]. To counteract the recently published shrinking of the German wine market [33], German wine producers might need to foster export. The literature does not provide sufficient information on sustainable offer design concepts to win the export market share. What are winning wine export offerings—spanning reliability, innovation, and sustainability—potentially allowing German wine producers to regain a market share in the global wine trade?
Sustainability in a brief definition means not to consume at the expense of future generations [34]. The UN publication “Our Common Future” advocated for elevating sustainability to the status of guiding principle in the interest of making the world safe for all human populations and operationalized the concept as a parallel pursuit of economic, ecological, and social aspects [34][35][36][37][38][39][40][41][42][43][44][45]. For agricultural enterprises such as wine estates, sustainability is of even higher importance given the dependence on climate and ecology, having drawn a lot attention in the literature on how to manage sustainably in the wine industry [26][46][47][48][49][50][51][52][53][54][55]. In the context of wine, exports and imports sustainability encompasses the producer, the product, and the whole sourcing across borders [56].

2. German Wine Export

Germans drink about 20 million hectoliters of wine annually and wine consumption in Germany has been stable for years whereas it plummeted in other old wine world regions (for instance Spain, France, and Italy) [28][57][58][59]. German wine estates predominantly produce wine for their home market, as 90% of German wine sells nationally. Whereas, Germany exports more than 3.5 million hectoliters of wine according to the official statistics, just about 1.2 million hectoliters are Germany-grown wine. The key export destinations for German wine are the USA, Netherlands, Great Britain, China, and Scandinavian countries (Norway, Sweden, and Denmark) [28][60][61] make up for more than half of the exported German wine. However, historically wine export has been a relevant vehicle for sales and, furthermore, a lever to build a reputation for German wine producers. In the late 1900, German wine estates even outperformed famous wine regions and estates in Burgundy or in Bordeaux [15][62][63]. In the last decades, German wine producers did not profit from an increasing global wine trade that doubled since 2000: in the same period, exports of German wines halved from more than 2 million hectoliters of wine [6][15][28][60][64][65][66][67]. The wine concept “Liebfrauenmilch” of a white wine blend as a classic “one size fits all” approach lost market attractiveness and German wine production overall reduced significantly from more than 15 million to less than 10 million on average.
Market research companies just recently announced that the German wine market starts shrinking [68]. In case of a shrinking market, producers have to reduce their production (with a negative impact on their profitability and not a short-term option for wine producers since vineyards are planted for decades) or they need to conquer new markets outside of their home region by, for example, exporting their products [5][6][8][10][65][69]. But, Germany’s wine producers suffer competitive disadvantages in sustainability, destination centricity, and strategic offer design, and a lack of empirical evidence on how to address those key aspects [30] have motivated this research to explore whether “German wine producers can increase their attractiveness in competitive wine trade?”.

3. Wine Export Management: Key Success Factors and Sustainability

Successful export is not automatic, it must be actively managed [70]. Success factors in export [71] with reference to research on smaller enterprises [72] are commitment, knowledge, strategy, and export promotion [1][73][74][75][76]. For wine exports, empirical studies ascertain that consumers decide on “country-image effects” [77]. Country-specific wines were analyzed for Australia, Chile, USA, South Africa, and France [78]. In the absence of a study on Germany as a country of wine production, this research ambitioned to gain information on a country’s perception.
Increasingly, sustainability plays a role in buying and consumer decisions for products and services [47][79][80][81][82][83][84]. According to Pitelis and Teece [85], modern firms consider sustainability in their innovation efforts to create a competitive advantage. The literature on sustainable wine production is growing, with a focus on the strategic value of sustainability [47][48][49][55][86][87][88][89][90]. Wine’s global trade and the consumer’s choice for wine motivated research that explores sustainable wines from a marketing perspective [53][80][91][92][93][94][95]. Recent literature claims a need to embed sustainability in export offerings [96][97][98][99][100], but not providing details offer details. The literature expresses that sustainability in the wine industry is an ongoing, developing topic and a transformational phenomenon requiring further research as well as practical implementation and learning [46][49][51][101][102]. Ecopreneurship—characterizing sustainability-driven ecological orientation and entrepreneurship—has become a major presence in the agricultural realm, illustrated by the growing number of biological, organic, and biodynamic farms [49][103][104].
The goal of the German government that 25 percent of arable land will be organically farmed by 2030 is expected to motivate German growers to switch to organic farming, given that only 10 percent is farmed organically at present [105][106]. This also holds true for German winegrowing, which has a lot of catching up to do when it comes to ecologically farming. In regard to sustainability, winegrowers in New Zealand, Chile, South Africa, and California make a habit of publicizing their sustainability measures and the benefits thereof [49][52][54][80][88][107]. Is sustainability hence a suitable lever to differentiate in the German wine industry?
The scientific publications afford a further penetration of export management itself as well as the validation of models for the explanation of success factors, also in the case of wine exports [108][109].
Scandinavian countries are cited as role models and pioneers in sustainability, climate protection, and renewable energies [110][111][112]. An accentuation of ecological aspects is also revealed in wine consumption in these destinations [113]: for instance, in Sweden, organic wines make up for more than one-fourth of all sold wines [113][114]. Climate-friendly packaging (e.g., lightweight glass bottles, bag-in-box, and PET bottles), social working conditions, and the reduction of the CO2 footprint increasingly determine the tenders of the Swedish wine monopoly tenders. Similar developments can be observed in Norway, where societal demand for sustainable products is incorporated into tender conditions for bids and delivery requirements by the wine-buying monopoly. Thus, sustainable production and offer design will become an increasingly important success factor for wine exporters in these markets. The Scandinavian markets have become key wine sales destinations for German wine [28] and hence raise the issue of whether German wine producers not being perceived to meet the rising standards of sustainability and risk to lose key markets. Hence the research question “whether sustainability is of relevance in wine imports and how is German wine perceived in regard to meeting eventual sustainability expectations?” was raised.

4. Exploring Destination-Centric and Sustainable Wine Export Offerings

In highly competitive markets, such as the wine industry, innovative customer-centric offerings are key [115][116][117][118]. Maurel examined internal and contingency factors’ impact on export success for French wine exporters [119] and discovered that besides company size, export orientation, commitment, and innovation was a key success factor. In the past, suppliers benefited from a “seller’s market” (market-pull). Manufactured goods, products, or services were in short supply and naturally found a ready market due to excess demand, without the need for individualization or marketing efforts on the part of suppliers. As a result, mass goods satisfied the growing demand. With a rising productivity of the factories, higher production output, technology, and increasing competition, the range of products became more abundant. A sales-oriented marketing paradigm pushed new offerings and variety. With abundant offers, marketing, especially advertising served to steer consumer decisions (market-push). Today’s dominant predatory markets, signaling “buyer’s markets”, ask for individualization, customer-oriented solutions, and proactive, flexible offer design with recourse to data and digitization [120][121][122][123][124]. Convincingly, coherent concepts turn customers into brand lovers [125][126], also in the case of exports [74][127][128][129].
The increasingly industrialized wine world appears to be a good example for having a closer look at customer-centric offer design and is a relevant success factor in exports. Indeed, German wine producers suffer low concentration on the supplier side whereas large, globally active wine groups of other wine-producing countries (e.g., Constellation Brands, Gallo, Concha y Toro …) can profit from their international distribution networks, export experience, worldwide market knowledge, and access to financial markets [27][130][131][132]. The ability to deliver large quantities of wine ensures these suppliers an advantageous negotiating position vis-à-vis the trade. Henceforth, in lack of size German wine producers need to win export market share by creating attractive, innovative, and fitting offers for consumers in the target markets. Indeed, experiential marketing is increasingly important since “experiential” attributes fulfill the emotional utility of wines by hedonic or symbolic values to be experienced with senses, pleasures, feelings, and emotions [26][133][134][135][136][137][138]. Since previous studies on German wine export concluded that German producers are highly regarded for their reliability and their good knowledge of destination markets but lack an adaptation of their offerings to meet target markets [29] and often emotional value in the export countries, this research explores destination-specific offer designs to overcome the identified deficit [30].

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Marc Dressler
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