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Cooperative Wine, Catching On and Catching Up
Dec 14, 2015
(Forbes) - Wine co-operatives may not be all that visible on the market but they play a very important role in the wine business. However, cooperatives did, to some extent, fall into a hole the second half of the 20th century, but today many are getting out of it and deserve new recognition. A recent meeting with several CEOs of French cooperatives showed it well when they presented their wines for me to taste.
They are certainly wine business heavyweights. In France 65% of all independent wine growers (grape farmers / wine producers) belong to a wine cooperative. That does not quite mean that 65% of all wine is made by cooperatives since many growers do a bit of both: bottle their own wine while also being part of a cooperative.
The situation is similar in the other big European wine producing countries, notably Italy and Spain. But also in parts of the new world cooperatives sometimes play a very big role. In South Africa a single cooperative, KWV (rarely called by its full name Koöperatieve Wijnbouwers Vereniging van Zuid-Afrika) used to control almost all wine production in the country, until the end of apartheid. They are still one of the biggest producers in the country. In Argentina, the country’s biggest wine producer is Fecovita, a grouping of cooperatives representing 22% of the country’s wine production.
The cooperative movement was instrumental in transforming the wine industry – in the early 20th century. It allowed small farmers to group together and make wine independently and market their wines. But towards the end of the century many cooperatives and the whole movement had lost a lot of momentum. It suffered structural problems. Farmers were paid for their grapes by weight and had thus little incentive to improve the quality of the fruit. Improving the quality often meant reducing yields, and thus reducing the farmers pay, since the payment was per kilo. Cooperatives became focused on volume production without much thought about what the markets wanted.
Much of that is changing today in many cooperatives. They are dramatically improving the quality and they are adapting to a wine market that has become international and not local.
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