Is the Wine Industry definitely Established?

A data based approach using Wine Reviews from WineMag data from 2017.

Photo credit: http://choosewashingtonstate.com

Introduction

The Wine industry is already a well and known established sector. You might have heard that France, Italy, Spain and essentially Europe dominate the market. My recent interest for the Wine Industry combined with my passion of analyzing data gave me the opportunity to ask myself the following question:

What if new countries could emerge in the top ranking?

Therefore, I used wine reviews to take a closer look at this question. My data covers more than 100 000 wines through many points, including its score (given by reviewers), its price and its country.

Part I. What are the top wine countries?

First of all, I wanted to confirm if the statement above is true by observing the top wine countries in points given by reviewers.

My first expectation would be to see on top of the ranking the classic European countries. In order to not bias the results, only countries with a minimum of entries were considered.

Figure 1 — The top 10 countries in points

Surprisingly, England leads the ranking, followed by Austria. As the first one is not reputed to be a wine country, I would have expected for instance France to be higher in position (currently ranked 6). Nevertheless, England’s numbers of reviews is largely less than the other ones, which could bias the results too. Less entries could also mean less varieties offered by the country itself, showing a strategy more focus on specialized wines, which would mean consequently more expensive bottles.

Established countries in the Wine domain such as France, Italy, Germany, Austria show higher standard deviations in the price and in points. It could be explained by the fact these countries offer a larger varieties of different wines, from good ones to less good ones (I won’t say bad as the minimum in score given is 80/100), but also because there are more entries (more concise results). They act differently than England.

From the analysis above, I could figure out that countries, which don’t have a rich land such as France, have still a chance to be ranked in top, as England.

Part II. Which countries show the most potential to be top rankers?

In the chart below, I was interested in finding the top potential countries from the domain, by defining a ‘quality’ variable. It equals to ‘points’ divided by the ‘price’.

Figure 2— The top 10 countries in potential

The 4 top countries are from the balkans. They clearly show a big potential for investors. This is explained by the fact their bottle of wines are still extraordinary cheap today. But honestly, for a wine with a nearly low grade of 82/100, it is extraordinary a good choice!

Figure 3 — ranking of the countries in points

Unfortunately for Ukraine, Romania and Moldova, they are also in the top 10 worst countries in points…

Finally, only 2 countries deserve to be noticed here; these are Bulgaria (ranked 15/31 in points) and Portugal (12/31).

Our initial hypothesis will go with them as top 2 potential countries to raise up in the Wine Industry. Additionnal research in the data helped me to find out that Portugal had largely more entries than Bulgaria. It confirmed me this country would be a more confident and established potential than Bulgaria (who knows with more data…)

Part III. What should be the next steps for the high potential countries?

According to my analysis from figure 1, there should be 2 possible approaches.

1. The potential country stays focus on a particular variety of wine. Like England, it must enlight the whole potential of it. It goes with the specialization strategy.
2. It makes a lot of different varieties of wines. These must be based on the the specificity of the land. The wines will be of good quality, but they won’t be the “perfect” ones. The country tries to copy known established countries, opening also its range of choices.

Figure 4 — varieties of wines

Portugal is ranked 3 in mastering its type of wine from the whole list of varieties. It means:

• either its wines are so specific to its land that they can’t be copied and they are consequently unique.
• It seems to be a rich land which offers numerous different wines of outstanding quality.

Regarding Bulgaria, it doesn’t offer many varieties of wines but from figure 1 it has been found that they are of really good qualities. Bulgaria doesn’t show any specific wine yet. Reasons could be either because the Wine Industry is not yet fully developed compared to Portugal or the land is not as rich as a classic top ranked European country. A deeper investigation about the proposed earth could be interesting.

Conclusion

I wrote this article in 2020 whereas the data is from 2017. 3 years happened since the data is out, some of the previous analyzes might have changed.

1. The data comes from an American website. It would have been better to gather data from experts all around the world. The data might be then biased and statements might be limited only to the American population.
2. The reputed and known countries in Wine Industry don’t lead any more the top ranking. This seems to be led by countries which are specialized in specific wines.
3. Bulgaria and Portugal show high potential to join the top ranking. Portugal is more known, confirmed by more entries in the dataset, and by the price of its bottles. Bulgaria has less entries, but has a raw value of quality higher than the first one and cheaper bottles. It doesn’t seem to have today particular varieties of wines compared to Portugal. It could be a good idea for investors to try to settle a wine company in Bulgaria.

As the statements written above are observational, why don’t you go to visit one of these potential countries and make a wine tasting there to check by yourself?

To see more about this analysis, see the link to my Github available here.