Post by Christoph Hinderfeld

And it got even worse. The assessment of the overall situation strikes at the heart of the current crisis: the German wine industry is mired in a structural crisis of historic proportions. Independent producers and traditional estates are posting losses across the board: ..."How Did Germany Get Here? Germany’s economy, still the world’s third largest, has stalled. Since 2019, German producers have been hit by 30 to 40 percent higher labor, energy, packaging, machinery, and repair costs, Loose calculates. The start of the Russia-Ukraine War in 2022 jolted German energy prices, which remain high. Inflationary pressures have cut into consumer purchasing power. Moreover, German labor prices are significantly higher than those of other EU countries. Health consciousness around alcohol is increasing and other beverages have entered the market. Underlying all of this is the exceptional price sensitivity of German consumers, who buy roughly two out of three wines at discount supermarkets. Although Germany could meet domestic demand with its own wines, it is a net importer, as German wine consumers tend to favor cheaper imports and the diversity of international wine styles. The size and structure of Germany’s wine sector plays an important role. It has just over 100,000 hectares of vineyards and—despite significant consolidation over the past decade or so—most growers are small family businesses cultivating less than five hectares each. The smallest tend to feed bulk producers and co-ops."...: https://lnkd.in/eSv7YbUS We know: Declining consumption, shifting consumer habits among young people, and rising production costs coupled with low margins are placing a heavy burden on the industry. However, the crisis is forcing the sector to undergo a fundamental realignment. Opportunities lie in new strategic pillars for the future: https://lnkd.in/e6gr-2JQ VinocomInvestments/Global Food Brands GmbH www.weingutdrheigel.de . www.gfbwine.com . https://lnkd.in/eH7dESAW