In 2006, Denmark’s three big multiples – Coop, Dansk Supermarked and Dagrofa – accounted for 80% of total imports and sales. Today they have increased their market share to 83%, leaving 17% to HoReCa and the independent retailers. The biggest multiple, Coop, with five nationwide chains and 1,995 outlets, has performed well and increased their market share from 40% in 2006 to almost 50% today.
As there has been no increase in wine consumption since the turn of the century, the three big multiples compete by trading up, using both wine education and price as tools, and adapting marketing strategies taken from the independent retailers: they create winemaker dinners, wine fairs and wine clubs, and offer customer guidance in their in-house ‘wine shops’ on Fridays and Saturdays.
In 2006, France was the Danes’ preferred wine nation, with a market share of 20.8%. Today, France is struggling with a 12% share, the lowest it’s been in a decade. Australia’s share has also halved. Italian wine, on the other hand, is very popular at all price levels, which explains why Italy’s market share has topped the list for six years in a row, with 21% in 2015.
In 2006, the family-owned Chris Wine, established in 1973, was ranked the seventh-biggest wine company in Denmark; however, the second generation sold the last of the company’s activities in 2013. Globus Wine, established in 2006, then accounted for a mere 5% of the bag-in-box market. Today it counts for 35% of that market, and much of the wine it sells in bag-in-box is filled in its own bottling plant.
In 2006, Danish wine imports amounted to 201m L, with bulk representing 41.4%. In 2015, total imports had declined to 176.6m L, of which 44% is bulk. Part of the explanation as to why the bulk ratio is so high is that 17% of the total import is re-exported by, for instance, the newcomer Globus Wine.
The tax-ridden Danish importers have witnessed an 87% increase in excise, from 4.61 DKK ($0.69) per 750-ml bottle in 2006 to 8.61 DKK in 2016, and more will come in 2018. Danes therefore cross the German border where VAT is less, at 19% compared to the Danish 25%. To supply the estimated 25% rise in the border trade, many of the big Danish importers have established a German sister company.
E-commerce is growing, with the multiples getting into that market, and there is a growing demand for organic wine and a strong niche for vin nature led by Scandinavia’s biggest vin nature importer, Rosforth & Rosforth, and colleagues Krone Vin and Lieu-Dit. With the success of the New Nordic Cuisine, many new restaurants have opened, reflecting a more Mediterranean lifestyle, not least driven by the Millennials, who are willing to part with money for a good meal and a good bottle of wine, sold by a thriving on-trade.
From 2006 to 2015 there was a 12% fall in total imports, with 20% less red wine and 10% more white. Sparkling wine has increased by 57% and Champagne by 77%. As it was 10 years ago, wine is trendy and prestigious, with the market highly competitive, diverse and dynamic.
This article formed part of our 10th anniversary series in Issue 5, 2016 of Meininger's Wine Business International.