Organic wine: What does the market offer and what do consumers want?
Organic wine seems to be a major trend – but a closer look reveals something else: Organic wine is still a niche! Organic wine-growing areas account for just under six percent of global vineyards. The share is somewhat higher in Germany – at 7.5 percent – but even here, organic wine has a downside.
“Organic wine, natural wine, eco-wine, sustainable wine, vegan wine:” With so many different names floating around, consumers don’t exactly have a clear understanding of what it is. The easiest thing might be to describe vegan wine: It is a plain wine produced without any substances of animal origin. But there are only a few wines left today that incorporate any animal products, where they are used for clarification or in label glue. Substitutes are now available for both of these. The term vegan wine can therefore be rightly viewed as pure promotion on deceptive packaging – since these wines make claims that hold true for practically every wine available today. Uncertainty is just one more thing to cash in on.
Natural wine – a controversial label
When it comes to the term “natural wine”, anything goes. It doesn’t have a definition and may not be used on a label. But when it appears, wine inspectors raise their objections – even though the explicit prohibition of the term “natural” is no longer codified in wine law. However, in connection with wine, the word has a long tradition. In the first half of the 20th century, the term was permitted and could be used for wines that weren’t enriched with sugar (author’s note: “enrichment” is understood as an increase of alcohol content by adding sugar before fermentation).
The predecessor of the well-known association of German Prädikat wine estates, the “VDP. Die Prädikatsweingüter,” even used to be known back then as the “Association of German Natural Wine Auctioneers.” The association sought to draw a line between themselves and those who improved their wines through sugar, as was said at the time. In the wine laws of 1969 and 1971, the use of the term “natural” was even explicitly prohibited.
The reason: The dominant perception existed that, generally speaking, wine is a cultural product that can only be manufactured by human activity – making the use of the term “natural” inadmissible. That’s why there was a prohibition of improper use (author’s note: Due to improper use, certain terms could not be used. This is confronted by today’s prohibition to mislead).
Even if the term no longer appears in wine law or in fundamental EU regulations, wine legal specialists agree that the prohibition from before still applies today. Use of the term is therefore considered “misleading.” Interestingly, the term seems to have found another meaning throughout different circles in the wine scene. Whereas added sugar was once the decisive criteria, today people generally understand the term to describe products made from untreated, organically grown grapes – in particular, wine in which the grapes are left to their own devices until the end of the fermentation process.
Natural wine, which meanwhile is frequently offered as such, can therefore often only be found in specialized stores within the wine scene that care more about the good ideas and good intentions than providing correct information to consumers.
Strict regulations for organic wine
For organic wine, on the other hand, the European Union has established eco-regulations: clear policies for vineyard cultivation and wine production. They are aimed at largely natural production practices and limit the use of more or less effective pesticides and industrial fertilizers.
This considerably raises the risk for organic vintners and organic wine producers when growing grapes. Depending on the weather conditions, fungal infections in particular can lead to substantial damage, even to total loss. One effective tool against infection is the use of copper compounds, which, while hotly debated, are still permitted. However, due to the accumulation of copper in soil, their use in the EU is restricted. Producers can already feel these restrictions, following the EU’s stipulation in 2018 that a total of only 28 kilograms of copper, or 4 kg per year on average, could be applied within the next seven years.
Strong growth for organic wine-growing areas in the EU
To date, the organic wine growing areas managed according to EU rules have shown strong growth in the EU. Spain is currently at the top with an area of 107,000 hectares, corresponding to approximately 12 percent of Spain’s vineyards. With almost 16 percent and 105,000 hectares, Italy has the highest percentage of organic vineyards. France now has almost 80,000 hectares of organic wine growing area, or approximately 10 percent. According to the latest figures from the agricultural market’s information office, Germany lags slightly behind, with a share of about 7.5 percent or 7,500 hectares that are farmed organically.
A new market research study gives Germany’s organic vintners an optimistic outlook. Based on a study for the French organic vintners association SudVinBio, the London market research institute IWSR described an encouraging scenario for the German market under the headline, “The Global Organic Wine Market”. If the study is to be believed, Germany is ranked the largest organic wine market in the world, with 121.5 million liters. By 2022, IWSR researchers anticipate continued growth of 11.4 percent to €1.465 billion.
While the results of the study may seem a little too optimistic for some, it can be said with certainty that organic wine is now one of the most in-demand categories in the wine market. Indeed, organic vintners in Germany were able to realize significantly higher prices for their wines when selling to the major wine producers than their colleagues obtained for conventionally grown wines. But a closer look is needed to accurately depict the organic wine phenomenon and realistically assess the market.
Consumers want organic – even when it comes to wine!
But the situation doesn’t seem to be as straightforward as the market researchers would have us believe. First of all, consumers are primarily interested in fresh foods when buying organic, according to a study by Prof. Dr. Gergely Szolnoki at the University of Geisenheim. It showed that when buying fresh vegetables, fruit and lettuce, meat, cold meat and dairy products, between 20 to 50 percent of consumers regularly pay attention to a product’s organic label or whether it is organically produced and labeled as such.
In general, more women and younger consumers buy organic wine. At the same time, the target group for organic wine has a higher level of education and thus belongs to a higher social class. Organic and sustainably produced products hold special significance for this group.
This percentage is lower when buying wine; only about five percent of consumers look for the organic label. The situation looks different when the actual wine buyers and consumers are surveyed: More than 22 percent of wine buyers and wine consumers stated that they deliberately look for organic wines from time to time when making a purchase. That’s nine million consumers, which represents a substantial market volume and the actual key target group for organic wines.
Specialty retailers, the winemaker or the discount store – where does the organic wine consumer shop?
The natural question is whether the habits of these consumers can be analyzed in more detail. The study at the University of Geisenheim does provide some information regarding the intensity of consumption, preferences for taste and origin, as well as preferred places of purchase and sociodemographic information such as age, gender and social classes. The share of consumers who prefer a rather dry wine is higher among organic wine buyers than among non-organic wine buyers. With regard to origin, organic wine buyers are open for new finds and are more likely to buy international wines; they also tend to buy more red wine than white wine.
There were significant differences between the groups with regard to their preferred places of purchase. While non-organic wine buyers shop at discount stores more frequently, organic wine buyers tend to shop at specialty retailers, at the winegrower and at specialized online stores. Organic wine buyers are therefore considered classic multi-channel customers who are more likely to change their minds and take advantage of different sources.