Ep. 1190 Norway & Sweden Wine Market | wine2wine Business Forum 2021

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Talian Wine Podcast, a wine to wine business forum twenty twenty one media partner is proud to present a series of sessions highlighting the key themes and ideas from the two day event held on October the eighteenth and nineteenth twenty twenty one. This hybrid edition of the business forum was jam packed with the most informed speakers discussing some of the hottest topics in the wine industry today. For more information, please visit wine to wine dot net and tune in every Thursday at two PM central European time for more episodes recorded during this latest edition of wine to wine business forum. So an Hello, everyone. Very nice to to see you all in person again. My name is Rosa Duanson. I'm a Swedish wine journalist based in, Tuscany. So I speak Italian, with the Florentines that dialect, actually. Today, I write for Swedish wine magazines and for international press. And and I organize wine events in Sweden. I teach at the Sommelier School in Stockholm, and I also have, the first podcast in Sweden about Italian wine. So today, I'm gonna talk about the Swedish market together with my colleague, Marius, from Norway. So, that's my name. I am a, Samlier, and, a winding porter, and also the founder of, wine magazine in Norway called Guinobren Vink. Vineland Spirit in English. My Italian is, not very good. So I'm going to do it in, Norwegian instead. I'm going to do it in English. Everyone was looking for a translator now. So, I do wine courses, and, I also write a little bit in the wine magazine. I founded twelve years ago. Unfortunately, I don't I do not write about wine anymore, but, other other, beverages. So, I think we'll just, get starting before it ends because we don't have much time, but we will be here as long as we are allowed until they can close out. So, you can ask questions, when suitable. So, since Sweden is, much bigger than Norway in population, OSa will start. So, not not only not only for being a woman, but, also the bigger country. So take it away. Okay. Let's start. Let's take a look at the Swedish, markets. I don't know how many of you that have been in Sweden. One, two, three. Okay. Many. Great. Great. Great. Great. So you probably noticed that in the biggest cities, there's actually a flourishing, wine culture right now where left has happened in the last years. New wine bars are starting their niche wine bars, with very interesting wine lists from, small with with with a lot of, smaller producers from, less known regions. There's a great interest in wine education both in the, like, WSTT, but also, the Swedish organization with the impossible name called Moon Quintana. You can try that at home later to pronounce. But it's, an organization that offers wine education for, for a Swedish inhabitants. And today, they account for around thirty thousand members all over the country. There's also a growing interest towards, wine tourism Swedes love to travel, and they, wine and food is one of the main reasons why you go to a certain place, today. So wine and food is is very interesting. But as you know, both Norway and Sweden are highly influenced by a monopoly. So we will take a look how the monopoly works then we're gonna take a look at the Swedish market, what it looks like today. We're gonna I will, let you know how the Italian wines are doing in Sweden, and then we're gonna end with the ongoing trends right now on the Swedish market. So if we start with the first slide here, see if it works. So the Swedish monopoly was introduced in the beginning of the nineteen hundreds, but, what it looks like today It's more or less since the since nineteen fifty five. It started because in Sweden, there was a lot of health concerns. There was a lot of very bad drinking habits that was a threat to society. So that's why the Swedish monopoly runs, started. A big change was when, Sweden entered the European Union in nineteen ninety five because until then, the Swedish monopoly that is called Sistium Volage had the monopoly on everything that regarded alcoholic beverages. After nineteen ninety five, when Sweden entered European Union, the monopoly could only keep the off trade. That meant that we open up to importers. So importing wine is not subject to, monopoly. So how it works? So the the monopoly has around four hundred shops around the country. And in the shops, wines are sold that have won a tender. The tender are launched, through twice a year, or the launching strategy is, told, twice a year. Then you get to know, which wines will probably be subject to a future, tender. The tenders are very specific. They you regard the wine region, the prize, the grape varieties, the alcoholic level, and so on. So they're very, very specific. Normally, they, regard a large number of bottles of big quantities. To quite, low prices. So it's more easy for, as you probably know, for bigger producers, to to win, a tender. So the wines sold in the different, stores, they have all one, attended. But there are also, different segments in the monopoly today. For example, the temporary and exclusive listings that are launched twice a month, and they are not subject to tenders. They are decisions, made by the buyers, and they are launched in smaller quantities and to higher prices normally. They're not launched in all stores around the country, but normally in the biggest stores in the main cities. This is a growing segment. Last year, for example, the exclusive listing grew with eighty percent. So there's a marked interest towards these kind of more exclusive listings, inside the monopoly stores. Then we have the direct order segment. So the monopoly has a website where the wines are listed in the ordinary segment there around two thousand five hundred products. But the importers that didn't win the tender with their wines, they can still have their wines on the website at the Monopoly. The difference is if you take a look at the Swedish Malopolies website, the ordinary segment has a very good the wines they are described with a flavor profile. You get a lot of information, there's a little note with, like, if it's high acidity and how to pair the wine and and so on. While, the direct order segment is just name, no picture, and the price. So it's kind of a more sterile, imagine on, on the website. So the importers, if we instead take a look at the importers, it's quite easy to become an importer in Sweden. You just have to apply for a license that is quite easy to get, and then you can start sell wines in Sweden. No one really knows exactly how many there are, but, around eight hundred and a thousand, importers today. This doesn't mean they all work with the monopoly, the opposite. It's around fifteen twenty, big, importers that has almost all the market in, in Sweden. Then there's a growing segment of smaller importers that are niched Portuguese wines, ethical wines, natural wines, and so on. And the importers, they can choose to work towards the monopoly, the sustainable locket, or to sell to the Harika segment. The Huica segment is opened. You don't have to, go through the monopoly at that point. So importers can sell directly to restaurants. The restaurant segment has only ten cent of the sales of wine in Sweden. So it's quite a small market, but the restaurants tend to want to differentiate their offers from what is able to, buy in the store. So it could be interesting if you don't if you're not interested as a wine producer to sell large quantities, finding an importer that works really well with the Harika segment could be an interesting possibility. Of course, many of the importers, they work with both sustainable Logets and the Huika segment. So both on and off trade. Then we have the challenges, because since two thousand and seven, it is possible to sell wine online through web shops directly to consumers. It was a great discussion about that because, of course, the monopoly wasn't very happy about it and isn't very happy about it. There's many lawsuits going on between, between the the web stores and, and the Monopoly for the moment. Sometimes, or quite often it blows up in the press, and then, we will see what happens. But it is possible. It's, since two thousand and seven, it's a very small segment still. It has between zero point five and one percent of the Swedish market. So close to nothing, but it is a growing segment. So in the future, they think that this will be will be, have a bigger part of the Swedish Swedish market. One of the rules if you want to sell wines online through web shops is that, your storage can't be inside Sweden. It has to be outside the Swedish borders. So what most of the web shops do is that they have the storage in Denmark, and then they sell, to to Sweden. I just named it, a few here. One of the biggest is wine finder, and X wine and the wine company, but They're also, others. So this is how the, just a short brief because this is like a speed dating today. So we will move on, quite fast. But this is how it works. So for bigger producers, winning a tender could be great or is great. For smaller producers, there are other channels, especially if you the most important thing is to choose the right importer that has good contacts with the right restaurants and also with journalists, and even more so influencers on social media that has a great impact on on sales in in Sweden, more and more for every year. So what does the Swedish market look like today? Seventy percent of alcohol. That means all the all the alcoholic beverage that has more than three point five percent of alcohol has to be sold through the monopolist stores in a restaurant. It's not possible to take a bottle from, a restaurant and bring it home. It has to be consumed, on spot. But seventy percent of alcohol, is sold through the system below it. Ten percent through restaurants travel is ten percent. And internet, as we said, is zero point five, closer to one percent today, but very, very small. During the pandemic, the monopoly grew with eleven percent while travel of course went down with not as much as you would think, but with thirty five percent, sorry, sixty percent, and a restaurant went down with thirty five percent, even though Sweden never closed as you probably know. The society stayed open throughout the whole pandemic. Pandemic. Wine is the most popular alcoholic beverage today. It used to be beer, but it has changed. So that has also been, a big cultural change in Sweden. Forty five percent of, the alcoholic consumption is wine, strong beer thirty three percent in spirits, it's nineteen. Consumption is a little bit lower than, in the rest of Europe, eight point five liters pure alcohol per person in two thousand and twenty. And, as you can see, consumption decreased in the last ten years, it is decreasing, every year, but it's still higher than it was in the nineties. So this is what it looks like today. If we start to take a look at the Italian wines, it is doing really well in Sweden. At the monopoly, Italian wine has twenty five percent of the market today. So it's the leading country, in, in Sweden. Italian red wine has forty percent of the market. It is mostly wines from Venetal, Pullia, Piedmont is a growing segment as Sicily is, also a growing region. Is that when we take a look at the white wine, sweets are quite traditional when it comes to white wine in a way. I think there's a great potential here for Italian white wine production because they're not as known as the red wines. And I think most swedes, that's my impression. My personal impression is that swedes think about, Italian whites. I'm simple, not able to age, not very complex. So I think there's a a lot of work to do there when it comes to Italian whites. And it's South Africa. There is a leading country with seventeen point five percent and from second with seen point eight. It's also interesting because I took took a look at, the restaurant, the Harika segment, and, the Star Wineist made, a research, which countries solve best in Swedish restaurants, and France has sixty five percent of the restaurant segment, while Italy has only fifteen. So there's range there to work on for for sure. In two thousand and twenty, it was Austria, Portugal and France that had the biggest, growth. Swedes are not loyal. The Sweden is not a wine producing country, so It's curious wine lovers or wine drinkers. They're not loyal to any tradition, or any country. So it's a very it's a market that, can move very quickly. We have seen that in, five years ago, everyone drank Amarrone. I very often met people that said I only drink Amarrone and now everyone drinks Nebbiolo. So Sweden is it's not like in Italy when where everyone has an opinion in Sweden. Swedes tend to think, the same thing. So this is what it looks like today. So which are the ongoing trends? Sweden follow the global trends, quite similar, sustainable and ethical wines is a growing segment. Last year, organic wines grew with sixteen point two percent. And what I heard, it's not official yet, but what I heard is that, there will be a particular spot or place in the monopolist stores for wines with an ethical, certification like Equalitas or, sustained in Sicily or or similar. In the upcoming future. The sustainable and ethical wines are, people are willing to pay a little bit more. Of course, they're willing to pay more for these wines. They're especially, popular among the young crowd the urban, used, the wine drinkers mature wine drinkers, even though they're very, very young. They look out for, the sustainable and and ethical wines, and it's surely a growing, market. What we also see is that there's, big interest towards authenticity and premium station. In two thousand and six, so, yeah, more or less fifteen years ago, Wines that cost more than ten euros, at the monopoly, had only nine percent of the market. While today, they have thirty percent of the market. And the premium station is growing even though still the main, sixty percent of the sales regard wines that range between seven and nine euros, a bottle. But the premium segment is a growing market, and there's a bigger interest towards these kinds of wine, and we see that through the launch twice a month, with the exclusive temporary segment on them. At in the monopoly stores. And then low alcohol content, low no alcohol beverages are increasing, especially, again, the young, costumers are interested. They have concerned they want to diversify themselves from their older, more heavy, wine drinking habits maybe from their parents, and so on. So this is also, increasing. And then when it comes to packaging, as I said before, Sweden is not a wine producing country, so they don't really care if it's a natural cork or a traditional bottle. They're very open minded. The first bag in box was sold in nineteen ninety six in Sweden. So quite some time ago, and today the bag in box, stands for sixty percent of the packaging at the in the monopolist stores There's also cans, plastic bottles and, yeah, all possible, types of packaging. And they all seem to work quite fun, fine. The Monopoly, Sustien Boulevard, they had, they set a goal that they will, decrease, the CO two coming from packaging with ten percent within two thousand and twenty three. So within, yeah, next year. And this was a, a goal that they set up in two thousand and nineteen. And it will probably go on. So these are the ongoing trends. Right? Right now. And, I think we're gonna see a quite interesting development in Sweden due to this in the upcoming years. So I leave the word to Margers that comes from the Little Country of Norway. Italian wine podcast, part of the Mammar jumbo shrimp family. We are also looking forward to the development in Sweden, because, we buy a lot of them, the vine in Sweden. The consumers. So when the crisis we have now with the COVID nineteen, there was there were big problems at the border on the Swedish side because no no regions were coming. And the increase at the monopoly was, almost forty percent. So a little bit different different from, Sweden. I'll get into that. Let's start. We are only about five and a half million people. It's a it's a big country, but, various, very few people. Seven hundred thousand lives in the capital of Oslo. Red wine, white wine, three two one. It's, a lot about minerals, acidity, low alcohol, fruitiness, dry wines. No sugar. Yeah, I, I also took a little sentence about Sweden, but, it is a different, palettes in Sweden than in Norway. Two third of the wine comes from Europe. So, definitely, mostly all the import comes from European wine producing countries, and it stands for three fourth of the value. And, more than and Redvine is more than sixty percent. There are, a bit more than three hundred and thirty monopoly shops, which is quite interesting. So it's a big customer to be at the monopoly. It's, except for, Sweden. It's the biggest wine customer you can have in the world. We have, very good track of our importers, which is five hundred and sixty, mostly small. It's about, fifth yeah, same as in Sweden, fifteen to twenty Bing, and, so in between. At our web shop, we have, twenty six thousand products available. That's much more. That that's more than us. We only have the ten thousand available. I'll get back to that also. Two thousand in the shell in the in the shops is the same as in Sweden. Big increase in alcohol free products, actually, and sparkling wines are, trending. Also the environmental packaging, organic sustainable, like, also at all about in Sweden is also will the same trends in Norway. There are, a few, good selling grapes from Italy, like Padera, multiple channel, San Buosa, but PMont, and then at all is the biggest ones. That's, they stand for most of the Italian wines. Prices. Average, the price is about two and a half two point five, euros, accelerate. So that's the import price, which will be fifteen euros in the shop. So that's, that's because of the taxes taxes and, VAT, etcetera. The monopoly has, a percentage. The profit is, about thirteen to sixteen percent. No matter what kind of brand and no matter what kind of wine. So, alcohol tax, for a wine, like a red wine, thirteen percent will be more than five euros in taxes. This this is the alcohol tax and the VAT will be on the on the final price after the profit to the monopoly and after our profits. So to get into what's really interesting. The figures, you can get by emailing me. So but, to learn how to get into them more fully and how it works, that, is a little bit more complicated. The Norwegian monopoly, works, almost like in Sweden, but a few differences. We have We have the shops, and the monopoly cannot import. So everything they have must be bought from the importers. We, they have a web shop, and they are the only one allowed to have a web shop and sell to consumers. So that's different from Swedish market actually. They don't hold any stock, so the importers need to hold all the stock. So this means, every time we release a new wine, we need to had a stock in our own warehouse. And this is solved by most of the importers having a distribution partner. One of the big ones to make sure they have, distribution to all the monopoly shops, within a certain limit of time. If they fail with the distribution, their monopoly can kick you out. So, there is two markets in Norway, like in Sweden. You have, the wine monopoly, and you have the Hodega market. You can, you can, be on both. Hold on with with the same products. No problem. The the restaurants buy from the importers. And, the consumers buy from the one monopoly and go into a little bit details about how how to work to get into the monopoly. So you have You have the importer. You have the tenders at the monopoly. You have the consumers and the Horiaka. For, for most of the importers in Norway, it's necessarily necessary to work with the monopoly. Very few importers work only with Hureka. So to get in, to the monopoly, you have the tenders. But it's difficult to, to to win. It, you are you have to wait until the tender has the right specifications for your wine. You cannot do the others all the way around. With a few exceptions. So, if you don't have a tender, it's, you just have to wait. But it's it is one possibility. And that is the wine fairs that we arranged, importers arranged together with the monopoly every year. It's about one hundred wine fairs all across the country, local fairs, with only the local wine shops. This is unique because they don't do this in Sweden, only in Norway. And the this makes it possible for us to launch products bring them into the fears and, and invite the monopoly staff to have a tasting. The monopoly, the local monopoly shop can choose up to twenty percent of the sort ofment in the shop for these, local listings. So if you bring your vine, register registered in the monopoly, only for the order sortiments and the web shop, you can show it to the staff in the local shop. And if they like it, they can decide to bring it in to this one shop. If you do this one hundred times, You can get you can get a lot of local listings, and this is the clue how to do without winning a tender. So, So it it's not impossible with a vinyl opening. It's, it's about, waiting or or moving. If you want to move your products, into the monopoly, you have the wine fairs. If you want to wait, go to wait until the specifications is correct and try to win. The specifications for the tenders are given right away. So when they release the tender list, every detail is there. If you fail one of the details, you're out. So you cannot deliver two thousand and eighteen if they ask for two thousand and nineteen. If your wine is fourteen percent and they ask for a thirteen point five, they're not going to accept you. And, so it's necessary to be one hundred percent within the specifications to to be a part of it. So, the the monopoly has very strict rules. You have to be within those rules, you have to deliver the specifications, or, it's not going to to work. The the good thing about the monopoly is that, It's a huge, customer. So being a part of it has every benefit, not being there, you're not in the market at all, you know. So and they have, good knowledge. They are like our ambassadors in the shop. The staff has, good, good knowledge about wine. Many of them, take wine education. More and more. And, our ambassadors for the consumers that comes into the shop and ask questions ask for guidance, ask for, match for, for the food they are having in the weekend. So it it is the most important the most important, customer you can have without no doubt. The Horeca market is important, but the Horeca market is more, about marketing the wines. For the consumers to buy at the monopoly. So doing business at, at the Wureka market, you really need to sell a couple of thousand products or, o each brand, you have East wine, which is, not easy. If you have, one hundred wines, and you have to sell two thousand probably two thousand items of every one. It's only the yeah. It's almost impossible. It's only five point five million people in Norway, and that is, important to remember. It's, It's it is a small market, but with the monopoly as, big advantage. So price, if you have been approaching the no recent market, you know, that there is a lot of, talk about price and always the cheapest, products, always big volumes. This is not true. The monopoly, they ask for everything. They ask for expensive wines. They ask for cheap wines. They ask for small, subregions, commercial wines, everything. It's just a matter of time, and, they they are not adapting to the producers. The the they ask for certain wines, and we have to go and find the rights producers. So as a wine importer, you need to do the research and find and we find you, you cannot find us, and that that is the markets in Norway. This makes it difficult to approach, the Norwegian market, because, the chance of you having a wine right now with the right requirements, it's very slim. So, so we we need to find you, you know, which is very different from all all other markets, obviously. And the tenders, has a bad reputation. All the, the the producers doesn't like the tenders because it's a lottery. And, no flexibility. It is true. It's no flexibility, but it's not a lottery. It's definitely, possible to win tenders. It's just, to understand how to do it. And, we as importers, some of us, at least, know how to do it. And, is about. Many factors like, price, volume. It's, of course, the the wine itself, the quality, and, and doing the research in the market in the Norwegian market about, how many, how much you have to sell to keep the basic listing after the initial twelve months I don't know if you know about the monopoly market, but if you win a tender, you have twelve months to prove yourself. And if you don't sell enough, you're out. If you sell enough, you're in. It's simple as that. And, and, we, as an importer, can tell you exactly how much you need to sell. It's not difficult. Everything is in the sales statistics at, one, one monopoly. So the the the web shop and the wine portal has all you need to know exactly how much every single wine sells in Norway. Where it's nowhere in the world, except Sweden, with this Kylon knowledge about the markets. We can go in and look for specific brands or specific type of wines, and we get all the sales statistics we need to to know exactly what to look for to bring in for the tenders or for the for the wine fairs, local, wine fairs, the backdoor into the monoplane. This is how to succeed with the tenders, and, and it's almost, the only way to do it. I could go in deep details, but it's, too complex. But understanding the Norwegian system is essential to avoid misunderstandings and frustration among the producers. And this is this is the case. It's a lot of frustration, from new producers. And misunderstandings, because it it takes some time to understand how things work. But that's why the importers are there. You don't necessarily need to understand everything. We are we are the one to help you, into the market. So trust, trusting in the importers is important. Finding the right importer is important. And, having a common strategy is, more important than understanding the system. You have to adapt to the markets, listen to the importers, even though it, may hurt, you know, to, to adapt too much, it's it's, to be or not to be. The market is like it is. And, if you don't adapt, you won't get in. I I write here what works in Italy or Australia doesn't necessarily work in Norway. It's a different kind of market. That's why we are here explaining it, of course, and, telling you to don't keep up, trust in the importers and, let us help you to get into the market because it's not It's it's not impossible. Just take some time, because we have to find you and not the other way around. So And also, another important element is the written agreements, which has been more common the last, years and, very important. There is a there is a lot of, there is a lot of changes going on all the time. You change the importer, the importer, change producers, and, it it gives a bad name to the importers and the Norwegian market. And to avoid this, the written agreements is of great importance. It's it's more predictable for you as producer producers and also for the importers. So, I just needed to skip some facts. I hope that's okay. I think, we can, spend the last five minutes for questions. And, just, fire away with all the questions you want. There's no problem. We will try to answer. Yeah. I have a question regarding to, like, advertising of alcohol. So I'm a Facebook advertiser and now, like, Sweden as well as no way, not allowed to advertise on social media. So how about, like, other advertising if a producer want to increase their brand awareness? What do they need to do? Thank you. You cannot advertise, for alcohol in Norway, except for the Hureka channel, like magazines only distributed to Hureka. But, otherwise, no. You you have to try to get the journalists to write about it, giving them samples, but just be careful. Many, many samples. They load samples. Being there, done that. So, yeah. Thank you. In Sweden, it's, very common right now. It started with during the pandemic, but they do online tastings. The wine importers, sponsor, wine journalists or wine journalists, and they have online tastings on Facebook, on Instagram, and so on. And it's a growing interest, and it seems to to be working. There's a lot on social media, though, through influencers, wine people, journalists, and so on. Is Sweden you can dupe, commercial, but it has the signs, like, on cigarettes, underneath, but it's you can have it in magazines also for the wines sold in the Monopoly, but it has to have this text underneath as easy on I can I can just add that, the effect from, journalist writings, or, influencers is is very low? In Norway, it's only a few journalists with an effect on sales. So it's it must be a part of your total strategy, long term strategy to to build up, you know, knowledge, but it takes time and it costs a lot of money. The bay the best, the best marketing you do is getting your, brand in the shops because even though you're small, you get, your brand side by side with all the others. So you you have a small, producer from Barolo. We'll stand side by side with Fontana, you know? And then that's that's unique. It's like, the small and the big side by side in the shop. Okay. So, thank you for listening. Listen to the Italian wine podcast wherever you get your podcasts. We're on SoundCloud Apple Podcast spotify, HimalIFM, and more. Don't forget to subscribe and rate the show. If you enjoy listening, please consider donating through Italianline podcast dot com. Any amount helps cover equipment, and publication costs. Until next time.