The tiny country of Moldova lies on the edge of Europe and also on the fringes of most wine buyers’ awareness. Yet it has more vines per person than anywhere else on earth and its huge economic dependence on wine has given the industry serious motivation to improve wine quality. Recent difficult harvests in Western Europe, with rising prices and short supply, have sent buyers on the hunt for new sources of wine of the right price and style.
At a glance
Moldova is deep into an industry audit, registering vineyards and tracking exactly what is planted where, and researching native grape varieties and regions. The register is not yet complete but 2017 figures show a total of 81,000ha of commercial vineyards planted with Vitis vinifera, of which 78,000ha are in production. A total of 1.8m hl of wine was produced in 2017 and the 2018 forecast is 1.5m to 1.7m hl. There are also another 9,600ha of hybrid vines (largely Isabella) plus 15,000ha of table grapes. This area of noble grapes puts Moldova second only to Romania in Eastern Europe, but unlike Romania, its domestic market is tiny, and export has always been a major focus. In 2005, Russia bought about 85% of its production but two Russian bans in 2006 and 2013 left it seeking other opportunities.
Data from the National Office for Vine and Wine (ONVV) shows Moldova is less dependent on a single market and in 2017 exports reached 1.44m hl. Bulk wine accounted for 71% by volume at an average price of €0.52 per litre, and was sold largely to former Commonwealth of Independent States countries and Romania. The share of exports in bottle rose 5.2% by volume, achieving an average price of €1.15 ($1.35) per bottle. Leading export destinations by volume are Poland 14%, China 12%, Romania 12%, Russia 12% and the Czech Republic 11%. Share by value is led by China 17%, Romania 13%, Poland 13%, the Czech Republic 10% and Russia 10%. China pays an average of €1.51 per bottle while Russia only pays €0.90, indicating price is still a key driver in this market. In Poland, Moldova is the sixth largest supplier and sales volume increased 5% in 2017. Wojciech Gogoliński, editor of Czas Vina, says semi-sweet Moldovan wines remain popular and 85% of consumers are looking for wines retailing below zł30 ($8.20). He has noticed an increasing range of Moldovan producers appearing on the Polish market.
Sales to China were up more than 73% by volume in the first quarter of 2018, according to China Customs data. Min Cho of Beijing LingQi Trade Company notes that while total imports rose 9.6%, EU wines saw a decline of close to 10%. “The number of domestic wine consumers continues to increase and consumer tasting capabilities are gradually increasing. Chinese consumers are increasingly willing to try wines from other countries besides France.” Red wines are still the strongest sector in China, notes Doina Borş, commercial director of Moldovan winemaker Doina-Vin: “We have to admit it is a struggle to convince Chinese consumers to give a chance to white or rosé wines.”
The varietal mix
There appears to be a lot of press interest in indigenous grape varieties from Eastern Europe, but this does not reflect the realities of what is grown in Moldova nor what is being sold for export. International grape varieties accounted for the bulk of the 2017 wine harvest, with local varieties comprising just 47,000hl of wine.
There’s growing interest in Moldovan wines in some less established European markets such as the UK and Netherlands, and this is driven by international varieties at value price points. Kathryn Glass of independent UK supplier Kingsland Drinks explains that: “The very first conversations Kingsland had with our trade customers were centred specifically around Pinot Grigio, mainly due to short harvests in Italy but also rising pricing due to changes to Italian appellations. The quality versus price ratio of Moldovan Pinot Grigio was hard to ignore.”
Victoria Mason of Waitrose has recently listed Radacini Sauvignon Blanc from Cimişlia Wineries and says that: “In terms of quality versus value for money on key international varieties, Moldova has definitely got a lot to offer.” Jonathan Butt of Butt Naked Wines has been importing Moldovan wine since 2010 and says the key is offering quality wine at the right price and building up a good following with consumers, so volume is growing rapidly. He adds that: “Consumer preference is for Pinot Grigio, Sauvignon Blanc, Chardonnay and Merlot, all varieties that we are able to supply in good volumes. Indigenous varieties are available but in less demand in the UK, as consumers struggle to understand grape varieties such as Fetească.”
Quality certainly doesn’t seem to be a concern for importers of Moldovan wine. Beth Willard, buying manager for Laithwaite’s, comments: “Our customers are very accepting of our Moldovan wines and at any of our customer events, the Moldovan producer stands are often among the most popular and the wines regularly pick up Wine of Show medals (voted on by customers).” In the Netherlands, Joep Speet of Pallas Wines agrees: “Dutch consumers are open-minded if quality is good enough, though they prefer well-known grapes.”
But as Elena Davidescu of Vinaria din Vale winery highlights, each market is different, and she is seeing a particular interest in Fetească Neagră and Fetească Regală in Japan, whereas in Canada their Crama Regala range of Cabernet Sauvignon and Sauvignon Blanc, retailing at C$7.05 ($5.44), has been a success. In contrast, Ruxanda Lipcan of Fautor Winery says local grape varieties are in demand. “These grapes are quite commercial and drinkable, and at the same time are unique, so the demand for these varieties is booming.” She adds: “The biggest barrier for us is to convince consumers to taste the wine for the first time. Afterwards selling the wine is easier because usually we have very positive feedback. People actually do not expect such high quality wines from Moldova.”
It seems that challenges in sourcing wine in Western Europe have also given Moldova a boost. Speet explains that poor harvests in France and Spain and low volume availability have definitely been helpful to Eastern Europe, where countries including Moldova have been offering more consistent quality and availability. Laithwaite’s Willard says that Moldova has provided a great alternative source for key varieties which have been in short supply. “We added five new wines from Moldova this year as a direct result of difficulties in France and Italy.” Glass agrees: “Kingsland have been looking at sourcing from Central and Eastern Europe for a couple of years now. The landscape of wine sourcing is changing and particularly because of the recent difficult harvests in the west, it has become very clear that this is the right strategy to take.” Butt adds that it’s not just Western Europe that is facing difficulties: recent forecasts of harvest problems and exchange rate challenges look set to make South Africa less competitive. Mirjam Van de Veen of Original Wine Classics sees Dutch consumers as very price-driven and believes that supermarket buyers are simply looking to Eastern Europe “hoping to find the next cheap alternative” but with no specific country in mind. Miranda Beems of Pallas Wines adds that Moldova has to fight for listings on the basis of quality and price as Romania has done – no one is specifically looking for Moldovan wine.
This gives Moldovan producers a challenge if they want to build a more premium, long-term business over and above cheap wine. As Min Cho says: “Building an image for Wine of Moldova is very important at this stage. It is the importers who are introducing inexpensive entry-level wines to the market, but they cannot be blamed. Moldova needs to encourage and focus its promotions more towards quality wines to build its brand value.”
Diana Lazar, wine industry manager with the USAID Competitiveness Project, says: “Wine promotion is becoming more and more visible. Our project aims at complementing the ONVV at two levels: we’re joining Wine of Moldova’s generic promotional activities and giving direct support to exporters via our Export Support Program, as well as niche marketing for the small wine producers.”
The value proposition
Moldova has several advantages in being able to offer value for money. Since signing a free trade agreement with the EU, there have been no tariff barriers to add costs. The relatively dry climate also means that input costs for vineyard treatments should be lower and several producers are also working towards sustainable and organic production. In addition, labour costs are low compared to those in Western Europe, with an average monthly salary in agriculture reaching just $191.00 in 2016 in a country where almost all vineyard work and picking is done by hand. A recent ONVV project calculated the cost of grape production in Moldova at four litres to seven litres per kg ($0.23 to $0.41), depending on crop levels and vineyard density.
Moldova’s wine industry has had a tough time over recent years, coming to terms with a new era and dealing with sometimes brutal political decisions. The industry has worked hard to find a better way forward. It’s now on a stronger footing and, given the number of Moldovans that rely on wine for a living, the country will be hoping this positive trend continues into a sustainable future.
• Area under noble wine grapes 81,000ha
• Total area under vine (incl. hybrids & table grapes) 105,700ha
• Harvest volume 2017 311,000 tonnes
• Number of active producers 2017 harvest 106
• Share of agricultural and food sector 16% by value
• Wine sector employee numbers 150,000
• Share of export trade 12% by value