THE DANISH WINE MARKET 2017/2018 1
INTRODUCTION TO DENMARK The following report gives an overview over the Danish wine market and is based on numbers given by stately organizations in Denmark and International market reports with facts available at the time written. Population: 5,751,815 Per capita income: 51,130 EUR (2016) Relationship to wine: Denmark is a wine-loving country In 2015, every Dane on average consumed 35 L of wines. In 1947 the amount was 3 L. There is a big geographical difference in the wine consumption of the Danes. Most wine is consumed in North Zealand (also known as The whiskey belt due to an over-population of Danes with a high-income) - consumes 37% more than the national average. The East- and Southern part of Jutland consume 9% less than the national average. Source: Danmarks Statistik, DR report (TV) 2
DANISH WINE MARKET IN SHORT - CONSUMER ANALYSIS Danish men drink more wine than Danish women: 19% of Danish men drink wine on a daily basis while the number for Danish women is 9%. The overall favorite grape among the Danish population is Cabernet Aauvignon (red) (19%) followed by Merlot (red) 13% and Riesling (white) (8%). Riesling (white) is the favorite grape among Danish women (10%) and the younger part of the population (25-39 years old) (13%). 53% of the respondents in the analysis most frequently drink white wine during the summer as it fits the season. For the red grapes, still most Danes prefer a powerful, spicy and muscular red wine and a rich, sweet and sun-ripened red wine (both 27%). Taste is the most important factor/attribute when Danes choose their wines followed by a good offer, grape and recommendations. Only 1 out of 10 Danes spends more than 100 DKK (13.50 EURO) per wine bottle. Source: Analysis made by Wines of Germany Denmark and the analysis institute Analyse Danmark in 2016 3
INTRODUCTION TO DENMARK Source: Wine Intelligence, Denmark Wine Market Landscape 4
THE DANISH WINE MARKET In 2016 Denmark imported roughly 178.2 mio. litres of wines which is an increase of 0,6% compared to the numbers from 2015. 2/3 of this amount was red wine. 46% was bulk and 17% of the total import was re-exported. The preferred countries based on market share: Italy (21%), Chile (15%), Spain (13.2%) and France (12.6%). However, there has been a clear tendency that especially Italian, French and Australian wines have become less popular in the taste of the Danish consumers. Germany ranks 7 with 6%. Despite a general decline in total volume import of German wine in the period 2009-2014 there has been an increase in the total value of the import of German wine in the same period. This shows a general tendency to focus on quality wine from Germany. The last couple of years there has again been a rise in export of volume to Denmark. USA and Germany are the only countries from which Denmark imports more white wine than red wine. Of the total imports of wine from Germany, 56% was white wine, which is a decline compared to 2015, where the share was 59%. Sparkling and rosé have seen an upward curve. Rosé is estimated to have a market share of 10% and there has been a 60% rise of all sweet and dry bubbles since 2006. Source: VSOD Import statistics 2016 5
THE DANISH WINE TRADE MARKET Wines in the price range 45,- to 60,- DKK (6 8 EUR) are the most popular. After more than 50 years of steady growth, Danish wine consumption has remained stable since the turn of the century with only some minor fluctuations. The Big 3 Coop, Dansk Supermarked and Dagrofa have an estimated 83% of sales, leaving just a mere 17% to HoReCa and the independent retailers. Despite the strong position of the multiples, the Danish market is one of the most diversified in the world, due to the fact that Denmark holds the record for having the highest number of wine importers per head in the world. Denmark has more than 1,400 registered wine importers. For many of these, wine is more con amore than a profit game. Sources: VSOD Import statistics 2016, Dansk Erhverv, Danmarks statistik 6
THE DANISH SUPERMARKET SITUATION The Big 3 Coop: Kvickly, SuperBrugsen, DagligBrugsen, Irma and Fakta Has the biggest share of almost 50% - Their supermarket chains range from discount stores (Fakta) to qualityoriented stores (Irma) - More than 80% of their sales come from their own imports - The Coop family consists of roughly 1,200 stores, which are owned by Coop Danmark and partly by a number of independent associations. Dansk Supermarked: Netto, Føtex and Bilka - 90% of their sales come from their own imports - Dansk Supermarked owns 615 stores in Denmark Dagrofa: Meny, Spar, Min Købmand and Let-Køb - 50% of their sales come from their own imports - Dagrofa has 520 store of which the majority are independent Besides these Big 3 there are also Supermarket chains such as REMA 1000, Kiwi, Aldi and Lidl, active in the market. Source: Wine Business Denmark article 7
NET IMPORTS OF WINE IN DENMARK BY COUNTRY OF ORIGIN TOTAL VOLUME (MILLION LITRES) 2014 2016 Source: VSOD Import statistics 2016 8
IMPORTS OF WINE IN DENMARK BY COUNTRY OF ORIGIN TOTAL VOLUME (MILLION LITRES) Country 2009 2010 2011 2012 2013 2014 2015 2016 Italy 42,3 36,5 38 38,6 44 39,1 36,2 37,4 Chile Spain 29,9 27,3 23,3 19,9 24,9 24,1 24 24,7 26 21,7 25,4 32,9 28,8 23.423,4 23,2 23,4 South Africa 16,6 16,9 17,2 15,8 19 21,2 20 22,4 France 32,2 29,8 28,8 27,6 29 23 21,8 22 Australia Germany 17,7 16,9 16,7 16 15,5 12,3 11,4 11,7 17 14,3 13,6 12,4 13 9,7 10,6 9,3 USA 10,6 7,4 8,5 9,2 9,5 5,8 5,4 5,5 Source: VSOD Import statistics 2016 9
IMPORTS OF WINE IN DENMARK BY COUNTRY OF ORIGIN TOTAL VALUE (EUR MILLION) Country 2009 2010 2011 2012 2013 2014 2015 2016 Italy 139,99 136,26 139,11 137,78 150,64 138,81 132,09 138,29 France 108,33 108,45 119,83 123,38 130,16 99,31 103,61 104,19 Chile Spain 48,42 49,09 45,41 41,48 47,13 47,97 50,23 51,83 38,71 33,93 37,34 46,39 49,29 39,64 39,37 41,62 USA 23,09 21,14 26,84 26,75 28,17 20,56 24,19 25,11 Germany 27,27 25,54 28,2 28,89 31,8 17,87 23,25 21,08 Source: VSOD Import statistics 2016 10
IMPORT OF WINE IN DENMARK BY COUNTRY OF ORIGIN (mio. litres) Source: VSOD Import statistics 2016 11
THE PRICE OF THE WINE COVERS - Duty: 10 DKK (1.34 EUR) - VAT: 25% - Profit (seller) - Profit (wholesaler) - Transport to Denmark - The wine grower will have the rest - (The average import price for German wines was 2.27 EUR per liter wine - the average import price across all countries was 2.79 EUR per liter wine) Source: VSOD Import statistics 2016 12
TRENDS IN THE MARKET CONSUMER EXPECTATIONS ARE CHANGING * BEFORE Taste NOW Taste Honesty Size Freshly prepared Local Ecology Healthy Quality Sustainability Functionality Packaging Service Aesthetics Free from.. + -------------------------------------------------------------------------------------------- Price Price Convenience Convenience *Trend researcher, Cathrine Gro Frederiksen 13
TRENDS IN THE MARKET VICINITY There is a general Danish consumer trend towards focusing on products produced in the vicinity. Germany, the Danes backyard. New Nordic kitchen, focusing on local products. The responsible consumer. 14
TRENDS IN THE MARKET QUALITY Increased focus on quality products. Increased focus in Super Markets on quality goods. E.g. the supermarket chain MENY has started to send some of their employees on sommelier training. MENY s employees are called madarbejdere (food employees) 15
TRENDS IN THE MARKET ECOLOGY The entire food and wine industry in Denmark has seen a significant increase in the focus on ecology. The market share of organic groceries in Denmark stands for 10.5% of total turnover of groceries in Danish retail. This is the highest market share in the world. The retail sales of ecological products increase year after year. The number has increased from almost 5.5 billion DKK in 2012 to 8.7 billion DKK in 2016. Worth noticing, the categories - Wine, liqueur and cider: from 195,243,000 DKK to 369,865.000 in 2015-2017 - Vegetables: from 1,168,055,000 DKK to 2,351,639,000 DKK in 2015-2017 - Meat and cold cuts: from 615,882,000 DKK to 932,345,000 DKK in 2015-2017 A recent study by the Danish Ministry of Environment and Food showed that the Danes to a higher and higher degree choose ecological products and the Danes perception of ecology become more and more positive. COOP, the largest retail company in the Danish Grocery sector, says they want to multiply the sales of organic wines within 2020 to reach 10% of the total wine sales. Source: Danmarks Statisitk, business.dk 16
CHALLENGES FOR GERMAN WINES A general lack of knowledge about German Wines. Image. Relatively small market share. Difficult to acquire German wines in supermarkets. Mostly big names in restaurants. The Danes have not yet a clear story about German wines. 17
TAXES AND CUSTOM DUTY (figures for 2016) VAT 25% Duty classification Duty (EUR per liter) 01.01.2015-31.12.2017 Alcohol contents > 1.2 6% Alcohol contents > 6 15% Alcohol contents > 15 22% Added duty for sparkling wine etc./liter 0.72 1.56 2.09 0.48 Source: SKAT (Danish Tax authority) 18
Agency: Wines of Germany Denmark c/o EHRENBERG SØRENSEN Kommunikation Nyhavn 43, 1 DK 1051 København K Contact: Tina Baungaard-Jensen Tel. +45 41 28 10 01 E-mail: winesofgermany@ehrenbergsoerensen.com www.winesofgermany.dk Facebook: Wines of Germany Danmark Deutsches Weininstitut Marketing Department Platz des Weines 2 D- 55294 Bodenheim Contact: Manuela Liebchen +49 6135 9323261 Manuela.liebchen@deutscheweine.de www.deutscheweine.de 19