If you shop for wine in Swiss supermarkets regularly, you’ll have noticed that the best wines are rarely found there. Take note: the situation is changing, albeit slowly. Supermarkets and other large retailers sold more Swiss AOC wines in 2017 (after falling for four years), and less lower-end wine, a study released 1 March shows. Sales of red vins de table and vins de pays fell, the latter by 12.8% in 2016 and another 11.1% in 2017.
This is the sixth in a series of annual reports by OSMV, the Swiss wine market observatory. The change, coming after three years of falling market share, offers wine producers some optimism, the report notes.
For the rest of us, people who shop for wine, the big picture is roughly this: the quality of the wines found in supermarkets is improving, the market share of Swiss versus foreign wines here is stabilizing, and while prices have increased slightly (0.3%), the weather-related reasons are obvious and the increases are in line with those for foreign wines.
A personal observation: the wines sold by any supermarket vary from one canton to another. Manor in particular promotes local wineries by featuring some of the best from a given store’s region.
Consumption, spending habits
Federal figures for 2016 showed a 3.8% dip in wine consumption in Switzerland. The per person annual figure has fallen to 30 litres a year, from 35 in 2014 (OSMV figures), with a growing population of foreigners playing a role – a 1.1% increase in the population in 2016, to 8.4 million inhabitants.
Only Portugal, France and Italy have higher per capita wine consumption, according to world industry OIV figures.
But the Swiss continue to spend more per capita on wine than the rest of the world, thanks in large part to an appreciation for quality, so foreign wine producers have long been keen to sell in this small market.
Making sense of the Swiss wine market overall
Market share, prices
First, some basics. The federal wine statistics and market survey are published in May every year, so we’ll have to wait to consider the new supermarket sales figures in a larger context.
Swiss wines are only about 31% of all wine sold in Swiss supermarkets – although they represent 35% of all wine sales by volume in the country; buying directly from wineries and wine clubs remains popular.
“The turnover for Swiss wine remains higher than that for its competitor, Italian wine (32.6% compared to 27%), which allowed Switzerland to keep the top place in terms of value in its wine market,” says Alexandre Mondoux, who headed the OSMV study. In other words, Swiss wineries have a higher turnover/sales volume than foreign wines sold in the country. It makes sense if you know that, while you can buy expensive foreign wines here, virtually all wines sold for less than CHF9 are foreign.
Producers here are sensitive to the long-held cliché that all things in Switzerland are expensive, including wine (the latter is mostly false as long as you compare comparable quality wines). Six years ago they backed the creation of OSMV polls and research studies. These are designed to help the wine industry gain a deeper understanding of what is happening in its home market at large retail outlets – not just who is selling the most wine, but how consumers react when prices go up or down, whether or not there is a strong seasonal aspect to sales, the longer term impact of weather conditions on prices and more.
How much the Swiss tend to spend per bottle
For the range of bottles sold at CHF12 to 25 per bottle, Swiss wines easily outsold foreign ones in supermarkets in 2017, by a price factor of at least 2 to 1. Only with bottles priced higher than CHF25, the luxury category, do foreign wines sell slightly better again, but this is a small percentage of overall sales. The biggest selling price category for all wines is CHF12-15.
A key point here is that 95% of all Swiss grapes are for AOC wines, according to 2016 federal figures; in short, quality and the ability to sell at a decent price is important to Swiss producers. This isn’t just a Swiss phenomenon, although the cost of land and production costs in Switzerland are higher than in neighbouring countries, so profit margins are thin. I was speaking to two wine specialists in the Italian and Spanish markets last week who said that the days of wines produced for 1 or 2 euros in the south of Europe are coming to an end, since this kind of production simply isn’t sustainable. The new generation, children of those still making wine this way, aren’t interested in carrying on. Winemakers who want to make money will opt for better quality and a decent return. Expect to see more mid-range wines.
Back to supermarkets, not all regions the same
The largest Swiss production area is Valais, with 4,875 hectares out of the total of 14,780 for all of Switzerland. But when it comes to supermarkets, Valais has the lion’s share, with nearly 43% of the AOC wines from this canton.
Red grapes were 57% of production and white 43% in 2016, countrywide. Vaud is the exception to the dominance of red: white grapes are the majority here. Dominant grapes are, in order of importance, Pinot Noir, Chasselas, Gamay and Merlot. The first three all saw a very slight fall in production areas in 2016, but more Merlot is being planted.
But when it comes to buying, more than half (52.1%) of the white wine bought in supermarkets come from Switzerland, while only 13.4% of red wines does. Italian reds are a favourite – 38% of all red wine sold, with French and Spanish reds slightly ahead of Swiss.
A few other curious figures about regional differences come out of the OSMV report this week (remember, these are supermarket sales):
- One of every two bottles of AOC wine sold in Geneva was a rosé, where the average price fell by 6.2% last year.
- Valais saw a massive increase in rosé wine sales, up 76.1% (from a small base), but a drop in sales of Fendant, 7.8% down.
- In canton Vaud, one in two bottles of AOC white wine is from Vaud. One in four bottles of Swiss white AOC wine comes from Vaud, specifically AOC La Côte.
Imports, exports, Nature’s uneven hand
Figures from Bern for 2016 showed Switzerland importing 185 million litres of wine, down by 2.76 m, with both red and white falling. Sparkling wines, still trendy, were the exception, up 5.2%. Italy led the way, with nearly twice as much wine coming into Switzerland as France, then Spain followed by Portugal.
Exports were also down, by 7.85%, but this in a year which was the third of three with small harvests – not as much to go around. Swiss wine exports remain tiny: 1.23 million litres, less than 2% of wine produced.
What you hear about 2016 depends on where you are, with French-speaking Switzerland and Ticino having had a relatively good year, where harvests were up significantly from 2015 (a great wine year, but with one of the lowest harvests on record). In German-speaking Switzerland, 2016 was unkind, with deep late spring frosts hitting hard.
2017 – smallest production in 40 years: frost, hail, dryness & heat
Mother Nature was not kind to Swiss wineries in 2017, nor to the rest of Europe for that matter. The country’s wine production was down by 27%, or 28.5 million litres, to the lowest volume in 40 years: 79 million litres. The impact of this will not be clear until spring 2018, when white wines hit the market, and winter 2019, when reds begin to appear in significant numbers. Late hard frosts in the spring followed by hail in summer and some very warm, dry spells in several areas are behind the fall in production.
Despite this, the news at the moment is not all bad for the Swiss wine market, according to (limited) information gathered by the Swiss wine observatory. Sales in supermarkets of red and white Swiss wine fell by nearly 8% and rosé wines a tough 15% in 2016, but by 2017 red had slipped only 1.2%, white sales were stable and rosé climbed back by 11%.
Chart: Swiss sales accounted for 26.9% of supermarket/large chains sales in 2017, less than Italian wines. France and Spain were the two other main country sources.