“There are lies, damned lies and statistics,” noted Benjamin Disraeli, an aphorism that is ripe for scrutiny when analysing the health of the Belgium wine market. According to IWSR data, exports of French still wine into Belgium — France remains by far the largest wine supplier — fell in excess of 9% during the 2012 to 2015 period, with further volume decline seen in 2016.
“The market is in very bad shape at present and if I were a brand owner I would have other priorities,” says Jose Luis Hermoso, head of research at the IWSR. “Return on investment in current Belgian market conditions is very uncertain for a number of years unless you're an established brand.” As in most of Europe, Hermoso’s research points to a dramatic decline in still wine sales in the Belgian market, driven by a number of socio-economic and political factors.
Insiders are no more optimistic, particularly when the subject of tax is raised. “The Belgian market, especially for spirits, has really suffered from the third successive rise in excise duty on alcohol,” explains Pierre D’Haeseleer, brand manager at The Nectar, a leading importer. “The government needs to realise that as we’re a small country, close to neighbouring countries, people simply go abroad to buy alcohol. Belgians still drink the same amount of alcohol, so regarding the health measure it’s a complete flop and for the sector it’s very bad. Another problem is the reinforced police controls. People tend to be more careful when having a few glasses while visiting friends or going to a restaurant/wine bar.”
Such views on the increasingly fragile state of the Belgium on-trade market are borne out by a cross-section of distributors, analysts and wine brands. “Previously buoyant on-premise consumption have been severely affected by drink-and-drive measures, restaurant closures and the recent terror attacks, which are keeping tourists away as well as causing a steep decline of the business lunch occasion,” says Hermoso.
“The on trade segment has suffered as a result of both the terror attacks and the hefty tax rise,” agrees Alexandra Ladeuil, Foncalieu’s commercial export and marketing director.
The retail situation
The retail market continues to expand, with more than 76% of wine now sold in the off-trade channel, according to Euromonitor. Approximately 70% of retail wine is distributed via the major supermarkets, namely Carrefour, Delhaize and Colruyt. “Retail is definitely growing at the ‘bulk’ end,” says Pierre-François Lunden, owner of the independent retailer Wine Top. “Supermarkets increasingly import directly and sell massive quantities of buyer own brands. This enables them to place significant pressure on wineries to deliver a product at the lowest price possible, placing Belgian supermarkets in a very strong bargaining position.”
Yet despite these words of caution from both insiders and analysts, the market in Belgium remains an important centre for imported wine. Domestic production is relatively small, while per capita consumption, at 27 L per head, is well above the European average, maintaining Belgium’s position as the fifth largest importer of wine in Europe.
“The Belgian wine market is a mature market with well-educated consumers who have a very good knowledge about wine — it’s the market’s strongest point,” says Ladeuil. “Compared to other countries in a similar position in terms of wine consumption, Belgian consumers are demanding and choose quality rather than price.”
Indeed, the discerning nature of Belgian consumers is a point frequently touted by the nation’s retailers as the market’s most enduring quality, impervious to recent changes in tax legislation and the declining importance of the on-trade.
“Belgian consumers attach less value to price and country of origin than consumers in other countries,” says sommelier Joeri de Haes. “This is a country full of well-stocked cellars; Belgians generally know what they are talking about, have educated palates and overall drink quality rather than quantity.”
Nevertheless, de Haes concedes that the market is nothing if not contradictory and a highly divided one in terms of consumer spending habits and drinking patterns. For a start, the online sector remains undeveloped, accounting for less than 4% of total sales, according to de Haes. Moreover, while the premium and super-premium sector is far from moribund, in recent years bulk wine imports have grown significantly in Belgium, driven by the rise of retail Bag-in-Boxes.
“When discussing the Belgian wine market, it’s vital to understand the key differences between the Dutch-speaking north (Flanders) and the predominantly French-speaking Wallonia in the south,” says de Haes. “The cultural divide is significant and largely determines consumer behaviour. Flemish people are much more open to wines from South America, Australia and so on, while Walloons tend to favour French wines above all else.”
D’Haeseleer underlines the point that, particularly in Wallonia, the French hypermarkets aggressively market their products and enjoy easy market access that shows no signs of abating. “I would agree that Wallonia is not an easy market for New World brands,” he says. “Consumers are often doggedly conservative in their views of non-French wines.”
However, sommeliers and retailers also report a greater diversification within French wines being imported, with a decline in sales of expensive Burgundy and Cru Classé Bordeaux in favour of emerging regions. “I sell less Bordeaux and Burgundy than five years ago — the Languedoc is doing well in addition to non-European wines, particularly in Flanders,” says Wine Top’s Lunden. “Wallonia is undoubtedly still French-dominated, but sales have fallen in recent years, while the New World is gaining more market share, albeit from a small base. Nonetheless, Flanders still accounts for more than 70% of non-French wine sales in Belgium, I believe,” he adds.
But despite the clear geographical differences in consumer behaviour, insiders and brands point to a number of trends that are defining the Belgian market as a whole. A countrywide move toward lighter, lower-alcohol wine styles such as Pinot Noir has been observed by industry professionals, driven by health concerns and a backlash against super-ripe, extracted wines.
“Overall, Belgians are generally drinking less still wines, that is true, but we’ve also seen a rise in demand for lighter wines styles and pale rosé wines,” reports Ladeuil. “At the moment the Belgian retail sector is trying to attract young consumers and busily developing rosés and wines with modern packaging to appeal to them. The beach resort Knokke-le-Zoute is a very important place too to establish rosés and premium brands during the summer season.”
Organic wine is another hot topic. “The rise in demand for organic wines has been impressive — a mixture of health concerns and shrewd marketing has fuelled this interest,” says Lunden.
The owners of retail chain Bio-Planet would undoubtedly agree — in 2013, the chain opened its 11th store, and now boasts 24. Selling only organic products —including, of course, wine — the chain has become a major hit with millennial consumers, according to Lunden.
“Organic wines are definitely rising in popularity, in addition to a general interest sustainable practices in winemaking,” agrees Ladeuil. “Brands that can demonstrate these credentials in Belgium should do well.”
Consumers are no less open-minded about packaging and bottle formats/closures, according to D’Haeseleer. He cites the rise in single-serve packages and Bag-in-Box wines as proof of this fact, while screwcap closures no longer carry a negative quality connotation, “at least among the vast majority of consumers,” he adds.
But equally, old habits (or traditions) die hard and the Belgian market remains firmly committed to French wines, particularly Champagne. Indeed, according to the IWSR per capita Champagne consumption in Belgium is the highest in the world, although Prosecco and Cava continue to eat into market share, especially in Flanders where consumers are more open to other sparkling wine styles.
“Interestingly, sparkling wines, unlike still red and whites, are often not listed by geographical origin in Belgian supermarkets,” says the ISWR’s Hermoso. “So there are clearly opportunities for New World sparkling wines as consumers — especially in Flanders — are less fixated with country of origin when buying entry-level, affordable fizz.”
However, it is not only entry-level sparking wines that are thriving in Belgium. Premium Cava, which often struggles to gain any traction in markets like the UK because of a poor image, is doing better in markets such as Belgium and Scandinavia according to leading brands. “One market that sees Cava as the premium product that it is, is Belgium,” notes Codorníu CEO Javier Pagés. “There simply isn’t the negative connotation that exists in markets like the UK; this is the perfect example of the right position for Cava.”
“We’ve done very well in Belgium,” agrees Gramona owner Xavier Gramona. “The independent retail sector, especially in Brussels, is very developed and consumers in the market for premium brands are highly educated and knowledgeable — the stigma that lingers in other markets is largely absent,” he adds.
Port is another category that has regained its status as a relevant and even food-friendly drink, according to leading importers. “There was formerly a lack of understanding about Port — its different styles, suitably for food-pairing and so on,” says Pierre D’Haeseleer. “But this is the wonderful thing about Belgian consumers, they’re usually open-minded, in Flanders at least, and keen to learn. We represent Graham’s Port and have seen a dramatic rise in sales, up around 15% to 20% in volume and value each year.”
So the final picture that emerges from those involved in the Belgium market is a contradictory one. On the one hand there is strong evidence that consumption of still wine is falling, with the on-trade suffering a serious decline, which can only have a negative knock-on affect for premium brands involved in the market. Wallonia remains firmly aloof to non-French wines, while taxation increases and anti-alcohol rhetoric and regulations will only further discourage consumers from venturing outside their homes to drink.
Yet in other ways Belgium remains an attractive market. Consumers display an open-mindedness and knowledge that is rarely commonplace in developing or, indeed, mature wine markets, as evidenced by the success of more expensive brands.
In one regard, at least, Belgium is no different from any other imported wine market. As ever, brands stress the vital importance of working with the right people to achieve success. “Belgium is a small country where a brand can’t have several distributors as it could in France or in the US. This is the case for both sectors: on trade and retail,” says Ladeuil. “Make sure you choose your partner wisely and ensure you both share the same ambitions and vision.”
Or as Joeri de Haes says: “This is an oversaturated market, so brands need to tread very carefully when considering doing business in Belgium. Remember that there are more than 4,000 importers in the market and a lot of garage sales. And you don’t need a licence to operate as an importer, so the marketplace is full of charlatans, driven by money instead of a genuine passion for wine.”.