Rhone wines stand by their strategy to move up-market

Tain_lhermitage_Drome

The Inter Rhône professional association has set its sights firmly on the “premiumisation” of its wines, targeting the mid to high-end market. It is proud of the potential of its terroirs and appellations, and is convinced that this process is crucial to securing the future of the vineyards.

At its latest press conferences (on 24 March in Tain-l’Hermitage and 31 March in Avignon), the Interprofession des vins AOC de la vallée du Rhône, confirmed its strategy to move up-market in the next few years. This could already be seen in action with the Cairanne appellation, which has achieved the status of “cru du Rhône” by restructuring and adopting a higher quality specification. However, the Rhône Valley as a whole has reached a watershed. Entry-level Côtes du Rhône wines are now rubbing shoulders with other big names whose bottles are increasingly changing hands for a small fortune. A clear, strong strategy was therefore required.

This has now been achieved since Philippe Pellaton, Vice-President of the Inter Rhône viticulture professional association, has stated: “We have chosen a quality-based strategy focusing on moving up-market across all our appellations”. This view is shared by Michel Chapoutier, President of Inter Rhône since November 2014, who recognises that this strategy will alienate consumers looking for inexpensive Rhône appellations. They will have to shift towards the IGP segment (the former “vins de pays”). For AOC wines, this strategy is the only way to secure a long-term future for the vineyards, which have “experienced too many pressures due to ageing or climatic events”.

Rhône Valley vineyards have the good fortune to be “in vogue”, according to Michel Chapoutier. This is demonstrated by the recent price hike, which is in line with the new strategy for the region. Sales dipped  by 3.4% in France and 4.1% on the export market in 2015, but prices for these appellation wines have risen by 5.3%, thus producing a consistent picture overall. “We have come to terms with this slight drop in volume, it is a choice we have to make: we are moving closer and closer to the premium market”. Arnaud Pignol, Director General of the professional association, adds: “we are engaged in an economic repositioning exercise which is very positive for the sector. This upward trend in prices is also noticeable at iDealwine auctions, as is clear on our WineDex® Rhone index.

Rhône wines’ move to trade up will be accompanied by a reorganisation of markets. Countries with a reputation for low priced wines, such as Germany or the Scandinavian nations, are gradually yielding ground to new higher prestige markets for “mid and high-end wines. The professional association is placing its hope in an overseas export offensive, particularly in the high-priority, promising US market: sales there increased both in volume (+2.3%) and value (+5.7%) in 2015. Asia is also in their sights: exports of AOC Rhône wines are booming in Japan, and in China in particular (+11.8% in volume, +15.1% in value). The eventual aim is to increase the global share of wine export volumes from 30 to 50%, leading to an improved return on prices.

There are therefore some positive prospects for the sector, which is hardly surprising considering the efforts made to enhance quality by most wine growers, including those at entry level. Hard work reaps rewards. Furthermore, the 2015 vintage looks to be exceptional and “atypical” according to Michel Chapoutier, as it features “characteristics from hot years and characteristics from cool years. We can only hope that this strategy will not bring about a general increase in fine wine prices, a trend observed in recent years in Bordeaux and Burgundy.

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