As harvests in France and Italy fall to historic, all-time lows, and Spain (which has been the low-price leader for bulk Cabernet Sauvignon) not faring much better, overall wine production for the EU is expected to be 10 percent lower in 2017. The quality of surviving fruit, however, remains high—a compounding factor that ensures prices for open-market bulk wine will increase. In 2016, the La Niña weather pattern brought rain and hail to South America, which saw 35 percent and 21 percent or more declines in yield, respectively, for Argentina and Chile. Until that time, Chile had been on par with Spain for thrifty Cabernet Sauvignon, a variety that’s in high demand. At the opposite end of the spectrum, California, which commands the highest prices in the world for bulk Cabernet Sauvignon, suffered a wet spring that brought pressure from rot and a heat wave just prior to the 2017 harvest, resulting in losses too early to predict—but certain to reduce yield and quality, driving prices for bulk even higher. global bulk wine market has [previously] largely been confined to volume sellers and buyers.” “The —Denys Hornabrook, Vinex Democratizing the supply chain When the global supply of bulk wine tightens, who feels the pain and who stands to gain? The global bulk market is becoming more fluid as wine-producing countries such as Turkey, Romania, Poland, and the Ukraine are gaining access to bulk buyers, largely through contract suppliers and a London-based online trading exchange—Vinex—that emerged last year. According to Vinex Managing Director Denys Hornabrook, previous attempts to create an online exchange, such as Winery Exchange (now WX Direct), were too early in relation to the industry’s development. Through Vinex, medium-sized, hybrid producers (those that sell branded wine and also want to sell bulk) have access to the global market and, in doing so, are increasing the supply of available bulk wine.
As harvests in France and Italy fall to historic, all-time lows, and Spain (which has been the low-price leader for bulk Cabernet Sauvignon) not faring much better, overall wine production for the EU is expected to be 10 percent lower in 2017. The quality of surviving fruit, however, remains high—a compounding factor that ensures prices for open-market bulk wine will increase. In 2016, the La Niña weather pattern brought rain and hail to South America, which saw 35 percent and 21 percent or more declines in yield, respectively, for Argentina and Chile. Until that time, Chile had been on par with Spain for thrifty Cabernet Sauvignon, a variety that’s in high demand. At the opposite end of the spectrum, California, which commands the highest prices in the world for bulk Cabernet Sauvignon, suffered a wet spring that brought pressure from rot and a heat wave just prior to the 2017 harvest, resulting in losses too early to predict—but certain to reduce yield and quality, driving prices for bulk even higher. “The global bulk wine market has [previously] largely been confined to volume sellers and buyers.” —Denys Hornabrook, Vinex Democratizing the supply chain When the global supply of bulk wine tightens, who feels the pain and who stands to gain? The global bulk market is becoming more fluid as wine-producing countries such as Turkey, Romania, Poland, and the Ukraine are gaining access to bulk buyers, largely through contract suppliers and a London-based online trading exchange—Vinex—that emerged last year. According to Vinex Managing Director Denys Hornabrook, previous attempts to create an online exchange, such as Winery Exchange (now WX Direct), were too early in relation to the industry’s development. Through Vinex, medium-sized, hybrid producers (those that sell branded wine and also want to sell bulk) have access to the global market and, in doing so, are increasing the supply of available bulk wine.
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