Last month, in collaboration with the Institute of Masters of Wine, we hosted a seminar session from their new Continuing Professional Development series, a conversation built for exactly this kind of scrutiny. Introduced by Charles Curtis MW, chair of the Institute's CPD committee, the session put Barry Dick MW, Head of Wine at Fero, alongside Mitch Fowler, Fero's co-founder and chief executive, to debate a single question. Is today's route to market a strain, a temporary correction or a structural break. Over 200 Masters of Wine and Masters of Wine students registered to find out.
A few numbers from the session are worth sitting with before anything else:
- Australian producers are currently sitting on two billion litres of stock against one billion litres of annual sales. That is not a typo.
- Across the UK's ten largest wine distributors, operating margins are converging on a number suspiciously close to the risk free rate of return. The kind of number that makes you ask why anyone stays in the business at all.
- On a seven pound bottle of wine, Barry put the actual wine content at around sixty two pence. Everything else is duty, VAT and import tax.
- Ninety two percent of the S&P 500's total value sits in brand and intangible assets, not factories or stock. Wine, as an industry, has historically invested its capital in exactly the wrong one of those two things.
- And on two bottles of English sparkling wine, identical in every way except price, one gives away more than double the gross margin to a single hidden cost most producers never priced in at all.
The full recording covers why demand is actually falling, what's really happening inside the UK's distributor layer, the three distinct businesses hiding inside every bottle of wine and a live Q&A on structural versus cyclical risk, winery scale and how to actually break the cycle.
