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Very different experiences of the 2020 rise in exports

Despite the sluggish economic climate, export sales rose 2.9% in the latest reference period (1 August 2019 – 31 July 2020). We explore this astonishing trend with Luxembourg’s biggest exporter (Vinsmoselle) and a dynamic independent estate (Laurent & Rita Kox).

It’s a figure no one would have expected. Between 1 August 2019 and 31 July 2020, wine sales in Luxembourg fell by 18% (which is not entirely catastrophic), while exports increased by 2.9%*. As such, 33,622 hectolitres of Luxembourg wine crossed national borders in 2019/2020, exceeding the figure for 2018/2019 (32,673 hl) and 2017/2018 (30,115 hl), although falling short of levels seen in 2016/2017 (227,015 hl).

The five-month lockdown clearly played a major role. As economist Martin Cubertafond explained in Vinorama 6: “In recent years, we have witnessed premiumisation of the market, with consumers drinking wine less frequently but choosing more expensive varieties […]. This trend has been abruptly halted during the Covid crisis. We have observed a return to products with lower unit costs. Examples of this trend include rising sales of 3 and 5-litre BIB wine. Less expensive wine ranges have also experienced growth.”

His comments chime with the experience of Domaines Vinsmoselle. “Last year, our sales fell in Luxembourg, mainly due to the cafés and restaurants closing. However, they rose by 4% in Belgium, where our products are largely sold by large retailers,” explains the cooperative’s General Manager, Patrick Berg. 

However, demand in these two markets is focused on different products. “In Belgium, there has been very high demand for entry-level wines, particularly Luxembourg Moselle PDO with no further indication of terroir, both in bottles and BIB (editor’s note: bag-in-box),” he adds. This increase in sales came as such a surprise that the bottling line had to be restarted in the middle of lockdown! “That’s right,” smiles Patrick Berg. “We urgently bottled mainly Pinot Gris, Rivaner and Pinot Luxembourg.”

Last year, our sales fell in Luxembourg, mainly due to the cafés and restaurants closing. However, they rose by 4% in Belgium, where our products are largely sold by large retailers.

Pinot Luxembourg is, in fact, relatively unknown in the Grand Duchy and is mainly exported. It is a blend of various pinots (Auxerrois, Pinot Blanc and Pinot Gris) produced in large quantities and thus ideal for stocking supermarket shelves. “In 2020, our bestsellers were Pinot Luxembourg and Pinot Gris, with sales rising by over 20%,” says Patrick Berg.

Enthusiasm for the cooperative’s wines among customers in Belgian supermarkets and hypermarkets has therefore led to Luxembourg’s biggest wine-grower supplying large volumes, an extremely welcome shot in the arm. Patrick Berg’s only regret is the low value of orders, since the cheapest wines in the range are being purchased. “We are trying to sell more high-end products, but it’s not easy as the demand is mainly for cheap wines,” he says. “However, we are hoping that customers have enjoyed them and will soon be tempted to try our Grands Premiers Crus!”

Another producer’s experiences were quite different: Domaine Laurent & Rita Kox managed to export its goods to North America (United States and Canada) for the first time in 2020. Thanks to an importer who was familiar with the Grand Duchy and fell in love with the estate’s wines, diners at first-class restaurants in New York and Washington are now able to sample some of the Moselle’s delights. 

However, perhaps the biggest surprise is what is packed in the cases shipped across the Atlantic. “They’re buying Elbling and our entry-level Riesling, wines that are not highly valued over here,” says Corinne Kox, Laurent and Rita’s daughter who instigated this initiative. “In New York, very dry, rather acidic wines are in vogue. The terroir is not such a critical factor for them.” 

“Seeing these wines being sold over there is very rewarding,” she smiles, having travelled to the US to meet the buyers. “Our customers here are amazed when we tell them that New Yorkers are buying our Elbling in shops at three times the price charged in Luxembourg and much more in restaurants! The Americans offer a fresh perspective on our wines. They’re not familiar with Elbling and don’t have our prejudices towards it. The fact they like it is a great advert for the wine and maybe we’ll also soon be swept up in this new trend!”

Our customers here are amazed when we tell them that New Yorkers are buying our Elbling in shops at three times the price charged in Luxembourg and much more in restaurants!

In any case, the US business looks set to last, since the importer had to restock in December after an initial order in early 2020 during lockdown. “From what I’ve heard, the market for this type of wine is stable, which is great news!” says Corinne Kox with clear satisfaction. The only trouble is that the estate is somewhat under-equipped to meet this new demand, as it no longer has many Elbling vines. “I’m planning on planting some more,” she reveals. “It’s not about producing wine specifically for one market. I just feel we shouldn’t lose this grape variety so entwined with our own identity. On the other side of the Moselle, the Germans are keen to promote Elbling, and it would be a shame if we completely abandoned it in favour of international grape varieties you can get anywhere!”

The Canadians also developed a taste for Domaine Kox wines last year. “The SAQ has a monopoly on wine sales over there, so they’re the ones you need to convince,” she explains. “We in Luxembourg have little chance of appealing to them unless we promote niche products, which is what we’ve done.”

The product that provided them with a foot in the door contains orange wine. It is a Pinot Blanc macerated for several hours in a stainless-steel tank “with minimal intervention” before pressing. Tannins are generated by contact between the juice and the skins and seeds, offering some wonderful new aromas. “The SAQ is struggling to keep up with the surge in demand for orange wine in Canada, so we’ve come in at exactly the right time!”

However, it wasn’t all plain sailing. Entering a new market in the middle of lockdown was a challenge. This was compounded by the fact that orange wine is an unusual product that needs to be presented and explained to new customers. “Our agents planned an extensive programme of in-store tastings and inevitably everything had to be cancelled,” says Corinne Kox regretfully. Moreover, sales of more expensive wines were also down in Canada, and orange wine is not an entry-level product. Current sales are good, but not yet outstanding. 

This won’t deter Corinne Kox from trying her hand at getting other items listed in Canadian stores in the near future. “Since lockdown, the SAQ catalogue has been frozen, and they’re not accepting any new wines,” she points out. However, before the pandemic, they also showed an interest in our Dosage Zéro crémant, which is another niche wine. We plan to chase this up!”

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