The Republic of Moldova was 29 years old in August 2020, and for its wine industry, it’s been a tumultuous period. Now, its often-embattled wine industry is facing yet another crisis – with the twin threats of extreme weather, including spring frost, hail and severe drought, plus the Covid-19 crisis. In spite of this, the industry is in far better shape to survive than in the past. Both wineries themselves and several important donors have helped the industry through significant changes and quality improvements – in a country that may be the most reliant on wine in the world.
At a glance
Moldova’s commercial vineyard area today is just 62,500 ha of wine grape varieties, plus 7,000 ha of the Vitis Labrusca variety Isabella. The 2020 harvest is estimated to be 25 to 40 percent lower than in 2019, due to severe drought, exacerbated by lack of irrigation in most of the country’s vineyards. Forecast wine production is around 1.2m hl – while at the same time, wineries have approximately 1.8m hl in stock, which is 35 percent higher than average.
In the face of the global slowdown in wine sales of around 15 to 30 percent, Wine of Moldova believes that the level of exports remains satisfactory; the first seven months of 2020 show volume down around 6.5 percent and a value decrease of 6.8 percent. Bottled wine sales actually increased by 5.4 percent in volume and 0.9 percent in value, according to Alexei Burciu, wine industry manager of the Moldova Competitiveness Project, “which is better than we expected at the start of the lockdown. The strategy for conversion to added-value, higher quality bottled wine seems to be paying off,” he says. Losses have been felt by the bulk business, with decreases of 11 percent in volume and 16 percent in value, and this all comes after a year where exports had reached their highest volume in the past decade.
While wine is less economically important overall than in the past, in part because other industrial sectors have grown, it remains significant, creating 16 percent of the total value in agriculture in 2019; Moldova has the highest density of vineyards in the world and wine represents three percent of GDP.
Not surprisingly, wine is a key part of Moldova’s National Development Strategy (NDS). A spokesperson for the ONVV (National Office for Vine & Wine) explained that it hopes its strategy will be ready to launch at ProWein 2021. The draft states, “Given its significant contribution to employment, generation of added value in the economy, exports and promotion of the country’s image on an international scale, the wine sector has a fundamental role in achieving the strategic goals of the NDS ‘Moldova 2030’.” The report also highlights that wine is strategically important to Moldova as a primary reason for tourism and for attracting positive attention from international media.
International funding plays a significant role in Moldova, perhaps most notably in the Moldova Competitiveness Project (MCP) funded by USAID, the government of Sweden and UK Aid. Over the past five years, MCP has supported improvements in wine quality and productivity, and delivered training, invested in marketing to high value markets and helped the wine industry rethink its strategies. For instance, MCP has provided 411 days winemaking consultancy in the past year and has helped 20 so-called ‘transition’ wineries, who together account for 30 percent of industry wine volume, to move from bulk commodity wines towards more premium bottled wines. MCP reports that the wineries it has supported recorded $20.6m in new domestic and export sales in 2019.
Small is beautiful
One particularly notable development over the past decade has been the rise of small wineries, totalling 42 by 2020. Their combined sales have increased 35 percent, while exports grew six-fold in 2019. Unlike other countries in Eastern Europe, tapping into the domestic market is not an option for small Moldovan wineries – most of the population is simply too poor to afford bottled wines. As Ion Luca of Carpe Diem and honorary president of the Association of Small Winemakers explains, “Even for us the local market is too small – we have to export our wines. Right now, the local market is about 30 percent for our winery. And all small wineries from Moldova are constantly looking for new markets.” He adds that small wineries have contributed to Moldova’s export push. “I am proud to say that I opened the South Korean market for Moldovan wineries. Seven years ago, when I started participating there at trade shows I was the first from Moldova. After three years I started selling my wines in Korea and now we are seven wineries that have regular orders from Korea.”
Another challenge in the domestic market is homemade wine sold on the grey market. This creates unfair competition with commercial wines and reinforces the gulf of understanding between products that Moldovans drink and wines that commercial wineries produce for export. Gheorghe Arpentin, director of the ONVV, says the ONVV estimates there are between 80 and 100m litres of wine on the grey market. “We do not have repressive, fiscal plans, but in our strategy, through access to subsidy, we want to integrate the producers of homemade wines of acceptable quality in the value chain of the industry.” Properly supported small vineyard owners and producers should be able to transition to focus on quality and earn higher prices for their production.
Positive quality developments so far really only apply to the top 10 percent of Moldovan wine and bulk wine continues to be a significant sector. Moldova’s export share is one of the highest in the world (83% by volume in 2019), yet its average export price is one of the lowest at €0.98 a litre. This is heavily influenced by bulk sales of around 50% by volume to CIS (Commonwealth of Independent Countries) for further processing. Low prices drive this market as result of endemic overproduction, and the sector is vulnerable to competition from both bigger bulk wine countries and political change. While Moldova’s draft wine strategy recognises that the bulk sector will continue, the overall focus will be on increasing quality and hence value.
Into the future
Looking ahead, Moldova’s 2030 draft wine strategy highlights the shift from a supply-led industry towards a demand-led one that recognises core attributes sought by consumers, such as the price/quality relationship, consistency, origin; and, increasingly, environmental and social credentials. Sustainability is a key focus. “In my experience, organic winegrowing is very easy in Moldova,” says Constantin Stratan of Equinox Winery, one of Moldova’s few organic producers. “The headache part is tons of record keeping for certification. I am personally going now through a nightmare of getting EU organic certification from a German-certifying company. Probably for the big companies it is easier, because they can afford to have employees responsible just for record keeping.”
Luca disagrees, saying that small wineries find it easier to adapt to sustainable practices. “Some investments are necessary, but because of the size of the winery and of the vineyards some sustainability milestones are easier to achieve.” Either way, sustainability is a core value for Moldova’s 2030 strategy, and Arpentin explains that current viticulture subsidies will in future be linked to a commitment to convert towards sustainability, with the aim that by 2030 60 percent of vineyards and 80 percent of wineries will be certified sustainable.
Local grape varieties have received much attention in Moldova recently, and plantings are increasing, though they still cover a relatively small area of just over 1,400 ha. “Everyone understands already that only local varieties can make the transition faster from bulk to bottle,” says Luca. “I also have Cabernet and Merlot in my portfolio, but it’s so much easier to sell Feteasca Neagra from Moldova.” But given that most wineries have significant areas of international grape varieties to sell they will have to continue to focus on these. Arpentin says that the national strategy will aim to increase plantings of local grapes, “We consider that local varieties and blends based on them can become a calling card for the country.”
Research projects include looking closely at terroir, resistant varieties – Viorica and Alb de Onițcani are two that are already showing commercial success – the impact of climate change and the identification of microbes that may contribute unique characteristics to Moldovan wine. By 2030, Moldova is planning to be known for its innovative and premium wines.