Industry Globalization

Abstract:

The concept of industry globalization involves the movement in active competition toward a worldwide marketplace environment, the integration of national markets, and leading rivals competing head to head in different countries for worldwide leadership. Through a review of academic, trade and popular press articles and an analysis of recent industry data, this paper explores the globalizing forces that are currently reshaping the wine industry and how different wine regions and the producers therein are reacting to or anticipating the changes.

As recently as ten years ago, the industry was highly fragmented.  Wine producers in different countries were isolated from each other, and most of the world’s wine drinkers consumed either local wines or imports from nearby producers, such as the United Kingdom’s historical penchant for French wine.  As winemakers had minimal cross-border interaction, they followed their own traditions.

The wine industry has changed dramatically in recent years.  Decreases in tariffs, logistical cost reductions and the lowering of other barriers to international trade have provided producers the opportunity to sell their products outside of a limited region, as well as face competition from distant suppliers.  Wines from around the world are desired and sought after by consumers. This new international access is reshaping how wines are produced and consumed alike, and those able to adapt to this wider playing field will gain significant competitive advantage.

The purpose of this research effort is to 1) profile the major wine producing countries 2) identify the primary driving forces and key success factors shaping the global wine industry and 3) to identify which countries are best positioned to successfully capitalize on the opportunities and counter the challenges brought by globalization and the other driving forces in the wine industry.

Author(s):

Richard M. Castaldi, Ph.D., San Francisco State University

April Fredrick, San Francisco State University

Primary contact's e-mail address:
cholette@sfsu.edu