Based on the case What changes (technology, companies, government policies) in the global wine industry allowed challengers
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Based on the case What changes (technology, companies, government policies) in the global wine industry allowed challengers from New World countries to take market share from France and other traditional producers in the late 20th century? Here is images of the case.
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Old World wine producersItaly, France, and Spain, found themselves inhibited by old winemaking traditions, restrictive industry regulations, and complex national and European Union (EU) legislation. This, plus a shift in consumer tastes and market structures, let New World companies-from Australia, Chile, and the United Stateschallenge Old World producers with innovations across the value chain. Now these competitors faced each other on a new front in this global wine wara battle for China, the fastest-growing and potentially biggest export market of all time. Through wars and the spread of democracy, European vineyards got smaller and smaller. While the largest estates made their own wine, most small farmers sold their grapes to the local winemaker or vintner. With payment based on weight, there was little incentive to pursue quality by reducing yield. Some small growers formed cooperatives, hoping to participate in wine making's downstream profit, but grape growing and wine making remained highly fragmented (value chain). Innovations in the eighteenth and nineteenth centuries, such as mass production of glass bottles, the use of cork stoppers, and the development of pasteurization, revolutionized the industry. With greater wine longevity, distribution to distant markets and bottle aging of good vintages became the norm. Additional vine plantings and production followed, and a global market for wine was born. By the mid-eighteenth century in France, grape growing supported 1.5 million families and an equal number in wine-related businesses. Wine became France's second-largest export, accounting for one-sixth of its trading revenue. The industry's growing cultural and economic importance soon attracted political attention, and with it, laws and regulations to control most aspects of winemaking. France's wine classification system was formed by a Bordeaux committee for the 1855 Exposition in Paris. To help consumers identify their finest wines, they classified 500 vineyards into five levels of quality, from premier cru (first growth) to cinquime cru (fifth growth). The categories were quite rigid, with almost no movement across them. This was due to a belief that quality was linked to terroir, the almost mystical blend of soil, aspect, microclimate, rainfall, and cultivation that the French passionately believed gave wine from each regionand indeed, each vineyard-its unique character. New World Wine Industry First developed to serve immigrant communities from wine countries; though demand grew and technology improved. In Australia, the hot climate and a dominant British heritage made beer the alcoholic beverage of preference. The U.S. market was more complex: one segment followed a tradition from the rum trade era and drank hard liquor, while another group reflected the Puritan heritage of temperance. As a result, in the pre-World War II era, wine was mostly made by and sold to European immigrant communities in both these countries. But in other New World wine-producing countries, the beverage became part of the national culture. For example, per capita annual consumption reached 80 liters in Argentina and 50 liters in Chile in the 1960swell behind the 110 liters per capita in Italy and France, but comparable with Spain. New World producers created wine industries quite different from the old world. Widely available inexpensive land allowed extensive vineyards that lowered labor costs by allowing the use of equipment, such as mechanical harvesters and pruners. grape-growing Unconstrained by regulation or tradition, New World producers also experimented with practices (innovation). Controlled drip irrigation a practice strictly forbidden under Appellation d'Origine Contrle (AOC) regulations allowed Australian vineyards not only to expand into marginal land, but also to reduce vintage variability. Innovative trellis systems allowed New World producers to plant vines at twice the traditional density, while fertilizers and pruning methods increased yield and improved grape flavor. These innovations, coupled with typically sunny climates, freed New World farmers from stresses of their counterparts in regions like Bordeaux, where the rainy maritime climate made late autumn harvests risky and held wine producers hostage to wide year-to-year vintage variations. Global Wine Industry Changes Old World wine producersItaly, France, and Spain, found themselves inhibited by old winemaking traditions, restrictive industry regulations, and complex national and European Union (EU) legislation. This, plus a shift in consumer tastes and market structures, let New World companies-from Australia, Chile, and the United Stateschallenge Old World producers with innovations across the value chain. Now these competitors faced each other on a new front in this global wine wara battle for China, the fastest-growing and potentially biggest export market of all time. Through wars and the spread of democracy, European vineyards got smaller and smaller. While the largest estates made their own wine, most small farmers sold their grapes to the local winemaker or vintner. With payment based on weight, there was little incentive to pursue quality by reducing yield. Some small growers formed cooperatives, hoping to participate in wine making's downstream profit, but grape growing and wine making remained highly fragmented (value chain). Innovations in the eighteenth and nineteenth centuries, such as mass production of glass bottles, the use of cork stoppers, and the development of pasteurization, revolutionized the industry. With greater wine longevity, distribution to distant markets and bottle aging of good vintages became the norm. Additional vine plantings and production followed, and a global market for wine was born. By the mid-eighteenth century in France, grape growing supported 1.5 million families and an equal number in wine-related businesses. Wine became France's second-largest export, accounting for one-sixth of its trading revenue. The industry's growing cultural and economic importance soon attracted political attention, and with it, laws and regulations to control most aspects of winemaking. France's wine classification system was formed by a Bordeaux committee for the 1855 Exposition in Paris. To help consumers identify their finest wines, they classified 500 vineyards into five levels of quality, from premier cru (first growth) to cinquime cru (fifth growth). The categories were quite rigid, with almost no movement across them. This was due to a belief that quality was linked to terroir, the almost mystical blend of soil, aspect, microclimate, rainfall, and cultivation that the French passionately believed gave wine from each regionand indeed, each vineyard-its unique character. New World Wine Industry First developed to serve immigrant communities from wine countries; though demand grew and technology improved. In Australia, the hot climate and a dominant British heritage made beer the alcoholic beverage of preference. The U.S. market was more complex: one segment followed a tradition from the rum trade era and drank hard liquor, while another group reflected the Puritan heritage of temperance. As a result, in the pre-World War II era, wine was mostly made by and sold to European immigrant communities in both these countries. But in other New World wine-producing countries, the beverage became part of the national culture. For example, per capita annual consumption reached 80 liters in Argentina and 50 liters in Chile in the 1960swell behind the 110 liters per capita in Italy and France, but comparable with Spain. New World producers created wine industries quite different from the old world. Widely available inexpensive land allowed extensive vineyards that lowered labor costs by allowing the use of equipment, such as mechanical harvesters and pruners. grape-growing Unconstrained by regulation or tradition, New World producers also experimented with practices (innovation). Controlled drip irrigation a practice strictly forbidden under Appellation d'Origine Contrle (AOC) regulations allowed Australian vineyards not only to expand into marginal land, but also to reduce vintage variability. Innovative trellis systems allowed New World producers to plant vines at twice the traditional density, while fertilizers and pruning methods increased yield and improved grape flavor. These innovations, coupled with typically sunny climates, freed New World farmers from stresses of their counterparts in regions like Bordeaux, where the rainy maritime climate made late autumn harvests risky and held wine producers hostage to wide year-to-year vintage variations. Global Wine Industry Changes
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International Marketing And Export Management
ISBN: 9781292016924
8th Edition
Authors: Gerald Albaum , Alexander Josiassen , Edwin Duerr
Posted Date:
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