The bulk shipping of wine versus bottling at source
Introduction and history

Photo: http://ibwsshow.com/blog/history-bulk-wine/
The first thing to be mentioned is that until January 2017, when talking about “bulk” we refer to wines sold in containers above 2 liters, including bag-in-box. 1
Transport (export) of wine has changed considerably over the ages but a wide variety of different methods, from tanker to a bottle sent by mail, are still used. Wine was transported in bulk in antiquity in a variety of ways: in huge wineskins loaded on the backs of two- or four-wheeled carts or in barrels on carts, but water-borne transport had a great advantage because of the inefficiency of the harnesses used on animals. For most of the Mediterranean area, wine was carried in large amphorae, which were loaded in holds of ships. The pottery jars required considerable packing (heather, straw, etc) to cushion them against breakages. They could be transferred to smaller vessels for transport up inland waterways. A recent discovery has been of wrecks carrying DOLIA, as a kind of tanker for the bulk transport of wine. Barrels were widely used in northern Europe and later in the Mediterranean, although the amphora tradition died out completely only in the medieval period. In the Middle Ages, rivers played an important role in transporting wine, and only those wine regions with access to good water transport (by sea and/or river) were likely to develop much trade. In the 19th and early 20th centuries, the advent of a railway system transformed wine regions as dissimilar as the Languedoc, Roussillon, Mendoza in Argentina, Rioja, and Chianti. Today wine is generally transported by road and sea. For centuries, the transport of wine meant bulk transport, and the most common container used for transporting wine was the barrel. Sherry, for example, was still shipped to British bottlers in its special casks, or butts, until well into the 20th century (when the empty butts were used for Scotch whisky maturation). In the latter half of the 20th century, however, container shipment in bulk tankers became the norm, although, as an increasing proportion of wine is bottled not just in its country or region of origin but actually at the winery, the most common container for transport today is probably the bottle, although for both financial and sustainability reasons, the proportion of wine shipped in bulk rose dramatically in the seven years to 2012 to reach 40%. 2
The Romans invented the technique of blowing glass bottles and some of these may well have been used to serve wine. From 1636, at about the time of the first appearance of glass bottles in post-Roman Britain, it was illegal to sell wine by the bottle. 3
The early 17th century saw changes in glassmaking technology that made bottles stronger and cheaper to blow. At about the same time some unknown thinker brought together the bottle, the cork, and the corkscrew. 4
During the 19th century, wine merchants developed their marketing methods and began selling wine in bottles. 5
According to Jean-Claude Ruf, scientific coordinator of the OIV, in the 2000-2014 period the distribution of (wine) exports significantly changed: the share of bottled wines reduced by 4 points in value and 12 points in volume while bulk wines increased. In 2014 bulk wine exports represented:
- 37.8 Mhl;
- 38% volume of export;
- a slight increase in the overall exports in terms of volume (+1.3%/2013);
- 14% of world wine production;
- In 2014 Spain represented 33% of world bulk wine export. 6
According to Wine by Numbers in 2015 the world export of bulk wine broke a new record in volume: the aggregate of the major producing countries reached 36.3 million hectoliters, thus increasing by 3% versus 2014. The growth was driven by Spain, world leader. 7
In Eastern Europe and the former Soviet Union in particular, bottling has traditionally taken place much closer to centers of population than to the vineyard. 8
The world average price for bulk wine in 2015 was 0,71€/l. 9
To sum up, in the past wine was exported in bulk because there was no other way to do it until they invented glass bottles and started to export in them. Nowadays the majority of all wine is exported in bottles but bulk wine export is rising rapidly.
In Russia, where I come from, bulk wine is generally believed to be cheap and low-quality wine, which is not always the case. Actually, bulk wine may be of lower quality for a cheaper price but it is a well-known fact that high quality bulk wine exists and is sold at higher prices. The same applies to bottled wine, which could be of good quality as well as bad quality.
I entirely agree with Jamie Goode who says that the world of fine wine is big and diverse, and it’s dangerous to make generalizations. 10
Further in this paper I am going to focus on two different options of exporting wine to a consumer: in bulk to be later bottled in a country of consumption and wine already bottled at the place of production, namely at a winery.
On the whole, shipping wine in bulk and bottling it in the country of sale is steadily increasing.
Advantages of shipping wine in bulk
A Master of Wine Bob Campel once stated: “The wines I don’t know have most likely been shipped in bulk and bottled in Europe. I don’t have a problem with that process, but in the battle to meet a low price point, quality is usually the first casualty“
. 11
I am of the same opinion. If the process of shipping wine in bulk is conducted properly, following all the rules and restrictions, paying attention to the temperature conditions, there is nothing wrong with it. We merely have to make sure that the risk of damaging the bulk wine as well as bottled wine during transportation is eliminated.
The main advantage of shipping wine in bulk and subsequently bottling it in the country of consumption is the price.
Shipping in bulk and bottling in the country of consumption may save costs. Distance is a factor, although shipping over large distances can be much cheaper than road transport over smaller distances. The increased use of flexi-containers to ship in bulk has made the process easier with fewer Quality Assurance (QA) problems. 12
Modern bulk shipment uses plastic flexi-tanks inside a standard container. Think of a giant bag-in-box. The economies of scale are enormous. A standard 20 foot/6 meter container will hold 10,584 liters of bottled wine. The same container will hold 24,000 liters of wine in a flexi-tank. Another advantage is that wine in bulk is likely to be affected less than bottled wine by temperature fluctuations if, for example, a ship crosses the equator or a container stays several days on the quayside in a warm climate, such as Australia or South Africa. 13
If wine is exposed to high temperatures, it may well deteriorate considerably, even if it has been subjected to effective stabilization. 14
At least 15% of your wine is likely to be cooked on its way to market. 26C or above for more than 36 hours is enough to damage the wine. 15
Place of bottling may be many thousands of miles from where the grapes where originally grown, and even from where the wine was made, since bulk transport is so very much cheaper than transporting wine in bottle and more environmentally friendly. The cost of bottling and bottles being so relatively high in California, Chile, and Australia, for example, some wines destined for sale in the US and Europe are bottled close to the market. Also, packaging waste is reduced, and locally recycled glass may be used. 16
It will save costs for both exporters/importers and consumers because it will be eventually reflected on the final price of a bottle of wine.
The global wine consumption is now increasing 17, but during fluctuations in the economy people prefer to spend less. In this case shipping wine in bulk could be the way to quench the thirst.
No matter which method of transport is chosen, increased shipment in bulk is being used to reduce costs and also CO2 emission. 18
Obviously it takes more ships to transport the same amount of already bottled wine than to deliver wine in bulk. As a result, more oxygen is burnt, more CO2 is produced and the environment gets more polluted.
Kirill Bardakov, a winemaker from Russia, claims that if we bottle wine in the country of production, we usually use bottles produced in the same country, in attempt to reduce the cost price of bottled wine. So, it is environmentally friendlier for a country where grapes are grown not to produce bottles and subsequently not to bottle wines there. It is better to ship them away in bulk. Besides, we don’t have to raise the ex-cellar price if we sell wine in bulk because there is no need for big marketing costs, which is not the case if we bottle wine at the premises. 19
Bulk transport has become a highly specialized industry with good standards of quality control throughout the process. Retailers have realized that they can have more influence over the bottling process when it takes place within their own country. Stainless steel ISO tanks can be used for continental journeys, but single-use “Flexitanks” are becoming popular for deep-sea transport. 20
For high-volume wines with a limited shelf life in a bottle of around nine months, there is the advantage that the wine is likely to reach the retailers’ shelves much sooner after bottling than wine bottled at source. 21
One more advantage is that bottles are breakable and shipping wine across the ocean in bulk ensures a safer delivery. All in all, shipping wine in bulk is a way to make the customer happy by offering him an attractive price.
Frank Duseigneur, a winemaker from Bordeaux who works in Russia, stresses that it matters who will sell the wine in another country. If we transport wine overseas in bulk then a negociant, who will sell the wine, is able to put a label which will be liked in this particular country according to its wine culture. He will be able to choose a special type of a bottle that local people prefer or the size of a bottle and use a screw cap instead of a cork where it is appropriate, for example. It helps a negociant to sell wine more efficiently by knowing the local market if wine arrives in bulk. With already bottled wine at the winery we don’t have this advantage. 22
I personally think that it is technically better to work with bulk wine because we can easily add SO2 or other permitted additives if needed, or blend wines to make it taste more palatable and etc, but with wine already bottled it is impossible.
Advantages of bottling wine at source
It is important to note that many winemakers, especially in Russia, consider bulk wine as an unfinished product. Bulk wine will be exposed to some winemaking manipulations after being delivered to a country of bottling and selling. Therefore there is a risk of making a mistake at this stage and spoiling the wine by using unqualified staff.
A bottle of wine is the final product of the whole process of winemaking. Care must be taken to ensure that the wine will stay alive, and that it will age in the bottle without spoiling. 23
Bottled wine at the winery is considered to be safer in this context. There are no more winemaking manipulations, just care while shipping and storing.
In the past it was the generally accepted principle that the best way of assuring the quality of the wine was to have it bottled in the country of origin, if not in the actual winery. 24
Oleg Nichvidyuk, a winemaker from Russia, thinks that bottled wine at a winery is the guarantee of authenticity and it makes a good image for a country of production. 25
The words “mise en bouteilles a la propriete” (‘bottled at the property”) are usually a guarantee of authenticity. 26
Also, bottled wine is easy to control in terms of image.
Producers of hand-crafted, top-quality wines usually prefer to conduct the bottling operation themselves since they have greater control over the process and are able to reduce to a minimum the amount of treatment the wine needs prior to shipping. Most wine labels should divulge where the wine was bottled. 27
Another advantage of bottling wine at source in the opinion of Kirill Bardakov is that it takes more staff to conduct this operation which means a wine producer creates more jobs for local people and that will reduce the level of unemployment. Moreover, it brings more taxes to a country of production if wine is bottled there as well as it increases the popularity of a country, region, and appellation. 28
Besides, modern wineries producing expensive brands now have special bottles with numbers, holograms, stamps and stickers that are used to eradicate fake bottles.
Furthermore, it is not suitable for moving small volumes of wine in bulk. If a single consignment is less than 15,000 cases there is no cost advantage over shipping in bottle. 29
For instance, if a winery produces a small amount of exclusive wine it is more sensible to export in bottles.
Frank Duseigneur adds: “Wine is not a watermelon. I don’t drink wine if I don’t know where the grape was grown. With bulk wine it is hard to identify the source of grape. Wine is more than just an agricultural product. When we drink wine we drink geography, geology, climate and culture of a country where wine was made. Therefore it is important to bottle wine at source and consider a bottle, a label, a cork as the whole“
. 30
I personally have a reason to believe that wine is an art; in this case it looks much graceful if it is bottled where it is produced.
Conclusion
In 15 years, imports of bulk wine have grown in all top countries. In volume, Spain (export) is well above all competitors. In value, Spain has grown the most in recent years and kept growing in 2015 despite more stable production. Spain is gaining sales in Germany, Italy and Russia. Russia and particularly China are increasing imports (bulk) heavily this year (2015-16), together with Slovakia, the Czech Republic and France. 31
Looking at the world’s three major wine importing nations, it has been estimated that bulk wine accounts for 60% of German, 37% of UK, and 30% of USA still wine imports. 32
In Europe, Germany has emerged as the major importer of bulk wine from the New World, buying mainly red wine from Chile, Argentina, California, Australia, and South Africa. Most of this is sold through importers/bottlers in Germany and then bottled for various discount chains. China has emerged as a significant buyer of bulk wine, sourced wherever it is cheapest. The UK remains a significant market for bulk wine, both for brands and for private labels, a continuation of the country’s wine bottling tradition. 33
To promote bulk wine shipment and its increasing quality there has even emerged a Bulk Wine Competition which takes place every year in Amsterdam. Wineries from all over the world that produce a minimum quantity of 10.000 liters can take part in the Competition. 34
Here I would like to speculate on how the proportion of bulk wine shipping could evolve over the next 5 years in Russia considering two points. But first it is vital to say that in Russia bulk wine is imported and not exported, because we don’t grow enough grapes for ourselves.
Currently (in 2016), Russia is the fourth biggest county importing wine in bulk by volume (86.037 Th.liters). 35
The first point is a proportion of imported bulk wine versus our own wine production from our grapes. I suppose bulk import will be increasing because there is a demand for cheaper wine and businesses will offer a supply. The area of our vineyards is not enough to meet the needs of consumers and it is increasing very slowly.
Oleg Nichvidyuk believes that in Russia only enthusiasts cultivate grapes. 36
The average selling price of 1 kg of high quality grapes in Russia is around 50 rubles = 0,68€ (where 1 euro is 72,52 rubles - 27.07.2016). 37 However, the average cost price of 1 kg of high quality grapes in Russia is much higher.
According to Fabien Lorenzon, a winemaker from Bordeaux who used to work in Russia at the biggest sparkling wine factory - Abrau Durso, the average price they paid in 2015 for buying bulk wine was 0,48€/L. 38
Needless to say it is cheaper and safer to buy bulk wine abroad, bottle and sell it in Russia than to grow good quality grapes.
Photo: http://winefolly.com/update/three-tier-system/
The second point is a proportion of imported bulk wine versus imported wine in bottles. In this case bulk import will also be increasing because of the sanctions, unstable economy, devaluation of national currency against euro and US dollar which makes imported bottled wine cost much more for a Russian consumer when it reaches here.
The Minister of Agriculture of Russia Alexander Tkachev in 2015 issued another restraining idea: he spoke out against the importation of bulk wine for bottling in Russian bottle. This, in his opinion, harms the development of domestic wine. 39
The initiative was heavily criticized by big businesses lobbying a bulk wine import and did not find a support by the Government. I think it would be wiser to increase taxation on the bulk import and not to ban it completely.
Talking about bulk wine I am thinking of good quality wine, that’s why I am not against the idea of shipping wine in bulk in general and to Russia in particular and bottling it here if it is written on a label. However, big wine businesses in Russia that import bulk wine don’t always care about quality and consumers, unfortunately, because it brings lots of cash to the table. In my opinion the bulk wine import will be increasing in Russia in the following 5 years, especially if the area of our vineyards stays the same.
Bibliography
Books:
- Bird, D. (2010): Understanding Wine Technology, Newark, DBQA Publishing.
- Goode, J. (2014): The Science of Wine, California, University of California Press Berkeley and Los Angeles.
- Johnson, H., Robinson, J. (2013): World Atlas of Wine, London, Mitchell Beazley.
- Margalit, Y. (2012): Concepts in Wine Technology, Small Winery Operations, San Francisco, The Wine Appreciation Guild.
- Robinson, J. (2015): The Oxford Companion to Wine, Oxford, Oxford University Press.
- Weinakademie Osterreich (Ed.) (2016): The Global Business of Alcoholic Beverages, Unit 1, Rust.
- Werner, G. (Ed.) (2011): Larousse Wine, London, Hamlyn.
- Wine and Spirit Education Trust (Ed.) (2012): Wines and Spirits Understanding Style and Quality, London.
Magazines:
- Campbell, B. (2016): Convince me! Wine prejudices. In: Decanter Magazine/June 2016, p.28-38.
Internet:
- Del Rey, R. (2015): New Bulk wine scenes: changes markets,
URL: http://www.worldbulkwine.com/conferencias/2015/OeMv_-_Rafael_del_Rey.rar, 01 August 2016. - Ruf, J-C. (2015): State of the international wine market in 2014,
URL: http://www.worldbulkwine.com/conferencias/2015/OIV.rar, 01 August 2016. - Russian News (2015): Tkachev proposes to prohibit the import of bulk wine for bottling in Russian bottle,
URL: http://en.news-4-u.ru/tkachev-proposes-to-prohibit-the-import-of-bulk-wine-for-bottling-in-russian-b..., 14 July 2016. - Statista (2016): Wine consumption worldwide from 2000 to 2015 (in million hectoliters),
URL: https://www.statista.com/statistics/232937/volume-of-global-wine-consumption/, 24 October 2016. - Vogt, E. (2015): The challenge of moving wine to market,
URL: http://www.worldbulkwine.com/conferencias/2015/Eric_E_Vogt.rar, 01 August 2016. - WBWE, International Bulk Wine competition,
URL: http://www.worldbulkwine.com/competition/ing/inicio.html, 21 July 2016. - Wine by Numbers (2016), Yearly Edition (2010-2015),
URL: http://www.uiv.it/wine-by-numbers/, 20 October 2016. - Wine by Numbers (2016), January-June 2016,
URL: http://www.uiv.it/wine-by-numbers/, 20 October 2016.
Verbal communications:
- Bardakov, K. (2016): personal interview about advantages of shipping wine in bulk and bottling wine at source, Kirill Bardakov is a winemaker from Russia who works at Usadba Divnomorskoe wine estate in the Krasnodar region of Russia, personal interview on 25 July 2016 in Gelendzhik.
- Duseigneur, F. (2016): personal interview about advantages of shipping wine in bulk and bottling wine at source, Frank Duseigneur is a winemaker from Bordeaux who works at Chateau de Talus wine estate in the Krasnodar region of Russia, personal interview on 26 July 2016 in Gelendzhik.
- Lorenzon, F. (2016): personal interview about advantages of shipping wine in bulk and bottling wine at source, Fabien Lorenzon is a winemaker from Bordeaux who used to work at Abrau Durso wine estate in the Krasnodar region of Russia, personal interview on 24 July 2016 in Gelendzhik.
- Nichvidyuk, O. (2016): personal interview about advantages of shipping wine in bulk and bottling wine at source, Oleg Nichvidyuk is a winemaker from Russia who works at Usadba Divnomorskoe wine estate in the Krasnodar region of Russia, personal interview on 27 July 2016 in Gelendzhik.
- Skok, A. (2016): personal interview about advantages of shipping wine in bulk and bottling wine at source, Andrey Skok is the CEO of two wine estates in the Krasnodar region of Russia: Cote Rocheuse and Chateau de Talus, personal interview on 27 July 2016 in Gelendzhik.
1 cf. Del Rey, R. (2015), p. 12
2 cf. Robinson, J. (2015), p. 754
3 cf. Robinson, J. (2015), p. 101
4 cf. Johnson, H., Robinson, J. (2013), p. 12
5 cf. Werner, G. (2011), p. 21
6 cf. Ruf, J-C. (2015), p. 21-22
7 cf. Wine by Numbers (2016), Online
8 cf. Robinson, J. (2015), p. 103
9 cf. Del Rey, R. (2015), p. 18
10 cf. Goode, J. (2014), p. 103
11 Campbell, B. (2016), p. 37
12 cf. Wine and Spirit Education Trust (2012), p. 45
13 cf. Weinakademie Osterreich GMBH (2016), p. 26
14 cf. Robinson, J. (2015), p. 754
15 cf. Vogt, E. (2016), p. 2
16 cf. Robinson, J. (2015), p. 103, 116
17 cf. Statista (2016), Online
18 cf. Weinakademie Osterreich GMBH (2016), p. 26
19 cf. Bardakov, K. (2016), personal interview
20 cf. Bird, D. (2010), p. 214
21 cf. Robinson, J. (2015), p. 103
22 cf. Duseigneur, F. (2016), personal interview
23 cf. Margalit, Y. (2012), p. 157
24 cf. Bird, D. (2010), p. 214
25 cf. Nichvidyuk, O. (2016), personal interview
26 cf. Werner, G. (2011), p. 127
27 cf. Robinson, J. (2015), p. 103
28 cf. Bardakov, K. (2016), personal interview
29 cf. Weinakademie Osterreich GMBH (2016), p. 26
30 Duseigneur, F. (2016), personal interview
31 cf. Del Rey, R. (2015), p. 34, 36, 37, 45
32 cf. Weinakademie Osterreich GMBH (2016), p. 26
33 cf. Robinson, J. (2015), p. 116
34 cf. World Bulk Wine Exhibition (2016), Online
35 cf. Wine by Numbers (2016), Online
36 cf. Nichvidyuk, O. (2016), personal interview
37 cf. Skok, A. (2016), personal interview
38 cf. Lorenzon, F. (2016), personal interview
39 cf. Russian News (2015), Online