Economic Analysis of the Wine Industry

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Economic Analysis of the Wine Industry

  • Amar Basnet

Human beings need different kinds of the materials in order to live day to day life some may have more importance and some may have the less importance. In current business world we can find different kinds of the product of same kind and same use which is called supplement product. Different product has got different nature which is based on the use, quality, based on the producer. But according to the nature of the production product are divided in 3 groups which are as follows:

  1. Primary Production: Primary production those products which are produce naturally or the products which are wholly based on the nature are called primary production. Agriculture production is a best example of the primary production. The grapes apple and other which is produce by the farmer is considered as the raw material for wine industry.
  1. Secondary production: If the production process is related with the manufacturing than it is considered as the secondary production. For example production of the television, car, electronics items etc is considered as the secondary production. In this production process assembling process are involved in it. There are various process involved in the wine production like crushing, fragmentation, etc. which are done with the help of machine which is considered as the secondary production.
  1. Tertiary production: Productions which is related with the services is called the tertiary production. The examples of the tertiary production are education, health facilities, etc.

In recent year the wine has become the part of the human life. Drinking the wine is considered as the important ritual of the modern society. In recent world Spain, America France and Italy is considered as the main producer of wine in the world. Spanish wine has got the good reputation in the current wine producing country. The wines are produced by using the naturally produced fruits like grapes, apple and orange and with other fruit of the choice of individual. Spain has got important market place in the current wine business world. They are one of the ancient countries in the world which produce wine since ancient period they are producing the different qualities of the wine with the different price level. They have got the 70 region and they have got the huge wine yard they are considered as the third largest country in the world in the wine production. There are various places which are famous for the wine production like Valencia, Ribera, Del Duero, Penedes, etc.

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Distribution channel

There are 2 kinds of the distribution channel which is found in wine industry are as follows:

  1. Direct channel: According to this channel the producer sell the wine to customer without any agent or retailers here there is no involvement of the middleman or agent due to this price will be less or cheap.
  2. Long channel: On the basis of this distribution channel the wine is one produce it is given to distributer for example to the wholesaler then it goes to the retailer store, for example to shop, off-licence and other shop only after that it goes to the customer. On basis of this distribution channel there is involvement of the different channel so the price will be high when it reaches to the final customer.

Wine production is one of the important businesses in the Spain. In order to produce the wine different processes are involved in the wine production. It has got the historical and cultural value in Spanish society. In order to produce the wine various process are involved in it the process of the wine production are as follows:

  • Harvest: This is the first step involve in the wine production. Grapes are the main raw material for the wine first it should be crossbred and need to b mixed well the grapes must be harvested at the precisely the right time to produce the best wine and many producer harvest their crop by hands in order to produce the quality wine. Now a days the professional wineries harvest according to the taste and colour of grapes.
  • Crushing and pressing: This is the second process that is involved in the wine production process once the grapes or the fruits which are the raw material are harvest they are crushed in the machine but in order to make the wine qualitative the seeds and skin are separated this will help to make the quality wine and helps to add up colour in wine.
  • Fragmentation: This is considered as another important process in wine production. Once the grapes are crushed and pressed then the juice is extracted and the juice is moved into the large container in which yeast is added and fragmentation process starts. It will take 10 to 30 days on; on the basis of the quality of wines the days are determined.
  • Filtering and aging: Once the grapes are fragmented the wine are filtered when the solid and yeast has been removed from the wine and it is distributed in the bottle and case to be aged. There are various aging processes. It is done on the basis of the age and on the basis of bottle.