The success of the new world wine industry is well documented. However, there are some comparative studies of the reasons for this success as compared to old world wine. Most of the subjective evidence and the business publications focus on the predominant of fruit taste wines, without looking at how the new world wine invades. This paper will show how the new world wine sector succeeds in the world wine war.
According to the International Wine And Strong Wine (IWSR) the latest research report, new world wines are certified that new world wines are dominating in the wine industry. New World Wines are from United States of America, South Africa, Australia, New Zealand, Argentina and Chile. For the past two decades old world countries are slipping away by the threat given by the new world countries. The United States is now the fourth largest power in the market. California has generated more than 90% of the United States wine production which makes California, as the fifth largest wine producer worldwide. These are key factors are affordability, wine taste, wine regulations, marketing, labels and sales figures that contribute the victory of New World Wine.
Old world wine usually refers to the European region of wine like France, Italy and Spain. Old world wines are used to pair with food as it process proper flavor in blending with food. The grapes have to be preserved until the next harvesting period to make an old world wine. Old world wine region have to develop and blend to the techniques that most probably the best making area. The wine-making method can create more rigorous which needed a longer period of time to age the wine to mature. In contrast, new world wines usually required a lesser time to make a bottle of wine as new world wines are softer in taste.
The retail price does undeniably affect every single step of production, handling and distribution. A bottle of wine’s price is influenced by issues like vineyards, production in turning the grapes into wine, packaging procedure, transportation, storage, marketing and advertising. New world wines are cheaper than old world wine. Winemakers are required to keep their costs down to allow consumers to afford. Most new world wine distributors are engaged in price promotions to shift serious volume through the supermarkets. Most consumers will spend a little amount of dollars to buy a bottle of wine for everyday drinking rather than buying a few hundreds or thousands of dollars. Old world wines offer opportunity to uphold higher profitability but the price will contribute the defeat in the wine battle.
New world wine consumers tend to choose wines based on the type of occasion, with higher budgeted wines for business banquets and gift giving. According to a book by Goldstein titled “The Wine Trials: 100 Everyday Wines Under 5 that Beat $50 to 50 Wines in Brown-Bag Blind Tastings, it stated that regular people who are not an expert in wine prefer cheaper wines. According to Prof Larry Lockshin, Wine Marketing Research Group, University of South Australia John Hall, Victoria University, Australia, new world wines are mostly sold in grocery stores in every countries. Another reference from Millennial buying habits as revealed by a recent Millennier Wine Sales online survey, 45.71% of consumers normally buy from grocery stores. Mr Lim Swee Say, NTUC Deputy Secretary-General, state in his speech that NTUC FairPrice caters consumers who are able to afford the brands of the product. As a result, most consumers bought their wines mainly from the grocery stores. Therefore, new world wines’ prices are up to the consumers’ budget.
New world wine is easier to drink which are less acidic, sweet and fruity, therefore is appeal the consumers. In contrast, old world wines provide wines that taste more acidic, dry and harsh. New world producers work in steady, hot climates that produce regular harvests and consistent wines. New world wines have a stronger taste while old world wines are fine in flavor. New world wines mix grapes from a few locations to build the best bottle of wine whilst old world wine are manufacture from the grapes’ soil location. Most consumers prefer a fruity taste, less tannins, and long-lasting flavors. Most pastry chef prefer to pair food with new world wines as these wines comes with sweet fruity flavor. According to the article on Dessert Wine most desserts are paired the best with fruity wine flavor. In contrast, other chefs prefer old world wines as they have bolder and stronger taste. In fact, new world wines have persistently expanding its market share by providing new drinkers to start liking wine and retaining them.
New world region ‘wine regulations are much different than the regulations that are from old world regions. New world region’s regulations are very flexible. They allow winemakers to be more creative in producing their wine. In contrast, old world winemakers have to follow strict rules governing the types of grapes used and the wine production method. As the new world winemaking is very modern, there are different kinds of varietals in the wine. According to the blog titled “Old World v. New World: An International Legal Perspective on Geographical Indications”, the laws and regulations in new world wine regions sustain individual invention and discovery of alternative practices to making wines. In contrast, the wine laws and regulations of old world wine regions preserve the tradition and heritage of making wines. The importance of the branding of new world wine is unquestionably expanding in the market. New world wines tend to apply for certificate of origin to establish brand awareness. As the results, consumers will be influence their decisions to purchase wines from new world region. From the Spanish study, the analysis suggests that country of origin is a prime and absolute consideration of consumers in their decision to purchase wine. Another reference from “The effects of country-of-origin on Chinese consumers' wine purchasing behavior”, the results confirmed that consumers consider certificate of origin as the one of the most important factor in the wine valuation. When consumers are choosing wine for gift giving and consuming wine in public, they tend to attach more importance to certificate of origin than to other factors.
New world wines are using celebrity endorsement to attract new wine tasters. The involvement of celebrities in wine companies is becoming increasingly common. Celebrity endorsements are the starter to allow consumers to make a decision in purchasing wines. Some celebrities like Madonna, Barbra Streisand, Kiss and Rolling Stone.
The brand name is labeled on the bottle is for identification purpose. The brand name must not mislead consumers. New world wine labels are easy to understand. They are in English and they indicate the variety of grapes like Chardonnay, Cabernet Savignon and Merlot. They also provide additional information like the taste description and food pairing suggestions. This can allow consumers to have the general idea of the wine. With the appealing attractive labels, new world wine is just more accessible and easier to understand than old world wines. Old world wines are by contrast very confusing. They are in foreign language and the wine is by place of origin by naming the specific region where the wine has been produced. Wine labels are written in language from the origin of the wine. Therefore, this may be foreign to some drinkers. They are slightly structured, rough surface that require a lot of trimming of labels. According to the telephone survey conducted by the Institute for Creation Research (ICR), labels that are clearer to read and understand allow them to remember the name of the wine. Referencing from the article “Designers Taking on Label Trends” from the Wines & Vines by Larry Walker state wine producers should design a label that attracts attention. In this way, consumers are able to remember the wine name. Consumers like labels that tell a story, but you have to tell it fast and simple.
New world wines sales has top old world wines. According to the Wine Market Council From the year 1988 to 2007, new world wine sales from 7.8 million cases to 227.6 million boxes, the compound annual growth rate of 19.5%. During the past two decades, the average annual growth rate of old world wines decrease by 1.7%, which had sold only 133.4 million boxes. According to the Bordeaux Wine Bureau, or the CIVB, old world wine consumption in the global market has decreased from 71% to 66%. In fact, the impact has been most identifiable in the Europe, where New World wine has become predominantly strong, gaining 14% of the market in the past 10 years, totaling up to 40% of the Europe’s overall wine market. Hence, old world region are being forced to change its old-fashioned and refined standards of the wine market due to the recent trend of new world wine. Other neighboring countries are deciding not get old world wine consumption but to join the worldwide trend towards innovative new world wine productions. With more supermarkets selling cheaper wines, new world makers are in better positioned to increase their sales towards high volumes and low margins.
The purpose of this explanatory research was to illustrate the factors that influence the victory of new world wine. Hence, old world wines and new world wines are two clearly different products in taste, quality, and type, different regions. However, many consumers simply want an affordable and the creation of new style.
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