Wine can be bought everywhere in Denmark: at the gas station, the florist, the supermarket, the specialist store, your newspaper’s wine club and from numerous websites. This is because in Denmark, unlike other Scandinavian countries, there is no government monopoly to regulate alcohol sales.
Wine is a Danish favourite and at 36 litres per head a year, Denmark is the biggest wine consumer of the non-wine producing countries. The wine-thirsty Danes drink so much, in fact, that they have enough supermarket square metres to supply a country of 17m inhabitants rather than the 5.6m who populate Denmark.
Not only is the supply of wine endless but so is the variety, from vin nature to English sparkling, thanks to more than one thousand small importers; for many of them, wine is more con amore than for profit. By contrast, 83% of wine is distributed by the big multiples through their supermarket chains. The on-trade represents about 7% of the market, with specialist stores, tank stations and online sales accounting for the other 10%. Of the 36 litres drunk annually by Danes, 18% is bought across the German border because Germany has no wine tax and only 19% VAT compared to Denmark’s 25%. Several Danish wine companies have therefore established companies over the border to supply this trade, competing with their national outlets.
Coop is Denmark’s largest retailer, operating the chains of Kvickly, SuperBrugsen, Dagli’Brugsen, Irma and Fakta and with a market share of close to 50%, followed by The Salling Group (until 1 June 2018 known as Dansk Supermarked) and its chains Netto, Føtex and Bilka. Dagrofa is third with Meny, Spar, Min Købmand and Let Køb. Fourth is Reitangruppen, with its chain of supermarkets called Rema 1000.
These multiples operate as in the UK, with a few people in the head office of each national chain doing the buying. The competition between them is fierce and they all use wine as bait, to the benefit of Danish consumers, who get very good prices. As Karsten Søndergaard, one of their suppliers, explains: “Five years ago a wine at DKK 35 ($5.48) tasted awful. That’s not the case anymore. Why buy a wine for DKK 100 ($15.68) when you can get one for half the price, just as good?”
Karsten Søndergaard is a remarkable Dane. Forty years ago his wife Anna-Marie Søndergaard began importing wine as a hobby. As it grew, Søndergaard gave up his job to join her and they established a wine company called AMKA. The first to supply Danish customers with big quantities of New World wines from Chile and South Africa, AMKA grew fast. Today, the AMKA Group has 20 companies in Denmark and nine other countries: Norway, Sweden, Finland, Germany, Poland, Latvia, Lithuania, Iceland and Portugal. It has 2,800 wines in its portfolio and does business with all the Danish multiples, wine shops, B2B, HoReCas, duty free and travel retail outlets, and re-exports to its Scandinavian and Baltic companies. Søndergaard’s employees in Finland, Norway and Sweden travel around the world just to source wine demanded by the monopolies in these countries.
When asked what it’s like to sell wine in Denmark, Søndergaard laughs. “Very easy. You can sell almost everything and there are no restrictions,” he says. “For instance, in Germany many customers demand both the importer and the producer to have an IFS [International Featured Standard] Certification.” This is not necessary in Denmark.
The big retailers are constantly adapting their operations to trends such as the demand for low alcohol wines. “The consumer is looking for lighter, less alcoholic wines – but where do you find that? You start looking everywhere. You get the Chileans to make Pinot Noir, or buy Spätburgunder from Germany.” Instead of the recently trendy Amarone, Søndergaard says his company is now looking for lighter red wines from northern Italy and Veneto. As a consequence of climate change and generally warmer weather in Denmark, the Danes are drinking less red wine and turning to whites like German Grauburgunder and Austrian Grüner Veltliner. “The Portuguese Vinho Verde is the newest pop-up, together with rosé from Porto, that a few years ago would get the no-go-nod. There is also a trend of France being back with their high-end Bordeaux.” Søndergaard adds that new trends are often first seen in Sweden, then move to Copenhagen, and then fan out to the rest of the country after a year’s delay.
Although the Danish economy is strong and the Danes affluent, the retail market is exquisitely price sensitive – six bottles on offer for DKK 200 is what dominates sales, according to Søndergaard. In the segment from DKK 30 to DKK 50 there is no consumer loyalty as there is for more expensive wines like Port or a Santa Rita Medalla Real. Packaging is very important, he continues, saying that many of the wines his company sells are tailored to the Danish market, from the taste to the packaging. “When we talk about volume, we are the decision makers and in control of packaging for about 75% of all the wine we sell.”
Søndergaard predicts that the concentration in trade will continue to increase, at the expense of choice, as powerful retailers become ever more dominant.
Lars Venborg worked in Copenhagen for Maersk, Denmark’s big shipping company, until he left in 1990 to head to Bordeaux and make his hobby – wine – his full-time occupation. After working at Château Prieuré-Lichine, where he learnt all the basics, he came to the conclusion that sales was his expertise. Now, 28 years later, his one-man consultancy mediates sales for producers in Europe and the New World.
“Wine is a people business, even more today than it used to be,” he says. “It’s easy to find information about the company you want to approach, but who is the right person to contact? That’s the challenge.” He continues: “If you want to sell your wine in Denmark, you have to consider who, and what you are, in terms of volume and profile, to be able to choose the right partner. And you have to look for openings in the importer’s portfolio. Are they ready for something new – like rosé was 30 years ago – or do they have an opening for a boutique wine, or a New World wine, at a bargain price?” Venborg says the market is much tougher and more competitive today because there are so many new players. He says that “more daily care is needed”.
This is part of a longer feature about doing business in Denmark that ran in Meininger's Wine Business International, Issue 4, 2018. The magazine is available by subscription.