1. Unlocking German Wine Classification and if the Verband Deutscher Pradikatsweinguter Classifications helps or hurts German Wine Exportation?

2. Research
Discuss if Verband Deutscher Pradikatsweinguter (VDP) classifications are helping or hurting the exportation of German wine in the global market.
It is a wide assumption in the wine community that German labeling is very confusing to the general consumer. Even under the German Wine Law of 1971 outside of the basics Prädikatswein or QpA and Qualitätswein QbA classifications most of the labeling is done on a regional basis or by producers.1
For example many producers use *, **, *** to rank their best wines, others use the gold capsule wines that are auctioned by the VDP every year, etc.
In the recent December publication of Wine and Spirit there was an article referencing how the classical German Kabinett style Riesling is disappearing due to the tight restrictions under both VDP and German law restrictions.1
1. Wine & Spirit. December “Klassical Revival.” Schildknecht, David.

3. 1971 German Wine Classification
In 1971 German passed it official classification law that put it in accordance with the European Economic Commission earlier law for “quality” wine.2
The major components of the law were to break up wines into two categories Prädikatswein or QpA and Qualitätswein or QbA. The former is broken up into classifications based on sugar level or Oeschle. The classifications of wines are as follows:
Kabinett Oeschle (sugars based on grapes mass) and at least 7% ABV
Spatlese Oeschle at least 7% ABV, Auslese Oeschle at least 7% ABV
Beerennauslese Oeschle at least 5.5% ABV
Trockenbeerenauslese 150 and above Oeschle at least 5.5% ABV
Eiswein Oeschle at least 5.5% ABV grapes must be picked frozen.
The law also broke down Germanys wine industry into Bereich= Districts within wine growing regions (41 total), Grosslagen= Collection of vineyards within a Bereich (160 total) and Einzellagen= Single Vineyards (2,632 total). The top Einzellagen were not classified except in the Rheingua were there was the Erst Gewach labeling for identified Einzellagen which had its own sugar and alcohol levels.345 2.
3.Reinhart Stephen “The Finest Wines of Germany” University of California Press Pg. 4-31 4. 5.

4. Verband Deutscher Pradikatsweinguter (VDP)
The Verband Deutscher Pradikatsweinguter or VDP was founded in 1910 as Verband der Naturweinguter but renamed VDP in 1972 to help identify and escalate German wine that was lost in the 1971 German Wine Law.
The VDP felt that the 1971 German wine law which classified previously roughly thirty thousand vineyards into 2,632, and the VDP felt that many historical sites were being lost by being put together in large Grosslagen’s. So the VDP decided to start their own classifications within their growers associations.6
Though the VDP counts less than 200 wineries as members, covering about 5 percent of the wine- growing territory in Germany, over the last decade it has constituted an influential alternative classification system catering to the status market.
The VDP is boycotting the official German classification system by not using it to communicate the quality of its wines (for most members).
The VDP classification and the Gault Millau guide were not influential judgment devices in the German wine market until the 1990s.7
6. Reinhart Stephan. “The Finest Wines of Germany” University of California Press. Pg
7. Quality Classification in Competition Price Formation in German Wine Market. AAWE. Rossell, Jorg. Beckert, Jens.

5. Verband Deutscher Pradikatsweinguter (VDP)
As stated by the VDP the classifications are based on a blend between Bordeaux and Burgundy. Such as in Bordeaux the estates are classified and the VDP says acceptance to the VDP classifies it as a top estate. Then the wines are classified based on the levels below.8
A showcase of how the VDP is trying to better align with Burgundy they changed their classification system to add one more tier “Gross Lage or Grand Cru” in the Spring of One note is that growers are not required to mark Erste Lage anymore they can go straight to Gross Lage.
VDP Classifications
Gustwein (Basic Level)= Estate bottle quality wine or QpA troken and off dry (VDP states “Comparable with a regional wine in Burgundy”)
Ortswein (Second Level)= Estate bottle, QPA trocken and off dry but represents village character (VDP states “Comparable with Village in Burgundy.”)
Erste lage= Single vineyard that were formerly identified as grand cru but that has changed by the VDP in turn to try to be more Burgundian. The new Erste Lage if the growers choose to mark will be made up of the sites in the Ostwein category. The wines do not need to be marked by the Pradikat but go from dry to noble sweet (VDP states “Comparable to a Premier Cru in Burgundy”).
Gross Lage= Single vineyard and are the grand cru sites in Germany. The wines do not need to be marked by the Pardikat but the top offi dry wines are marked by the VDP Gross Gewach (Except in Rheinghau where it is marked Erstes Gewach) and the sweet wines are marked VDP Gross Lage (VDP states “Comparable to a Grand Cru in Burgundy”). 9
8. VDP Fact Sheet brochure:
9. Reinhart Stephan. “The Finest Wines of Germany” University of California Press. Pg. 4-31

6. Burgundy Wine Classifications
Since the German VDP is working to replicate the Burgundian classifications you have to draw upon the history and the current classifications in Burgundy. There are currently four modern classifications for Burgundy wine, they are as followed Bourgogne (region wide), Village (44 Village classifications), Premier Cru (641 vineyards) and Grand Cru (33 vineyards). This system is classified under French law called Appellations d’Origine Contrôlée or AOC for short and Burgundy is composed of 100 AOC’s.10
The law provides strict guidelines for from harvesting to how to treat the vineyards it also provides authentication for the consumer.11In production regional wines produce 51.7% of total production, Village 36.8%, Premier Cru’s 10.1%, and Grand Cru’s 1,4%. The modern day AOC was passed on July 30,
History of Classification
Post French Revolution the regulations were mainly built for trade and based on research by Andre Julien and Dr. Denis Morelot.
Andre Julien work broke the wines into categories of First through Fifth Class for both White and Red based on quality.
Dr. Denis Morelot classification were as follows and based more on climats within each vineyard
Tetes de Cuvee= Grand Cru
Premieres Cuvee= Premier Cru
Deuxiemes Cuvee- Village/Regional
Troisiemes Cuvee= Village/Regional13
10.
11.
12.
13. The Original Grand Crus of Burgundy. Curtis, Charles MW pg

7. Import/Export Statistics (Note: The VDP statistics are variable)

8. Overall German Wine Export Statistics 2000-2015
/2017 Deustch Wein Statistik deutschweine,de

9. VDP Sales Domestic/Export 2009-2014*
Total Sales (Euros)
x Export Percentage
Total Export Sales
Percent Increase/Decrease
x Domestic Percentage
Total Domestic Sales
2009
288,000,000
0.2
57,600,000
0.8
230,400,000
2010
289,000,000
0.25
72,250,000
25.43% Increase
0.75
216,750,000
5.92% Decrease
2011
270,000,000
54,000,000
25.25% Decrease
216,000,000
0.3% Decrease
2012
290,000,000
58,000,000
7.4% Increase
232,000,000
2013
283,000,000
0.17
48,110,000
17.05% Decrease
0.83
234,890,000
1.24% Increase
2014
275,000,000
0.22
60,500,000
25.7% Increase
0.78
214,500,000
8.6% Increase
*VDP and German Sales numbers are rounded and the VDP numbers are variable as each producer did not respond to overall survey.
16. VDP Press Releases on Export Statistics

10. Overall German Sales Export 2009-2014*
Year
Volume per HL
x Euros Per HL
Total German Wine Export Sales
2009
2,068,000
193
399,124,000
2010
1,750,000
207
362,250,000
9.2% Decrease
2011
1,435,000
238
341,530,000
5.7% Decerase
2012
1,305,000
246
321,030,000
6% Decrease
2013
1,307,000
257
335,899,000
4.6% Increase
2014
1,191,000
267
317,997,000
5.3% Decrease
*VDP and German Sales numbers are rounded and the VDP numbers are variable as each producer did not respond to overall survey.
/2017 Deustch Wein Statistik deutschweine,de

11. Comparative Overall German Export vs VDP Export
VDP Sales
Overall the VDP Export Sales since the change in classification has fluctuated dramatically too much to tell if the classification has helped or hurt.
Consistently the VDP sales are focused on the domestic market compared to exports.
VDP Export Sales vs Overall German Export Sales
The VDP has fluctuated much more than the overall export sales of German wine.
Since the classification change the VDP has not seen that much change.
This could indicate that the change in the classification has helped in the export market of VDP wines.

12. Burgundy Export Sales
18,

13. Burgundy Domestic and Export Statistics
19.

14. VDP Export Market vs Burgundy
Compared to Burgundy where over 50% of the wine is exported the German and VDP wine market are currently focused domestically in Germany.
Most recently the VDP export has shown that Scandinavia and the United States are established markets with the Netherlands and the UK as growing and some early interest from the Russian Market.20
This is in comparison with Burgundy whose export markets go as below.
20% United States
19% United Kingdom
10% Japan
8% Germany
7% Canada21
20. VDP Press Releases on Export Statistics
21.

15. Possible Recommendation
That the VDP makes it mandatory of members to provide a standardized set of export statistics so that it can track if the labeling change is helping expand its export markets. Possible categories (currently it is optional for VDP members to respond to the annual survey):
Countries Exported to:
Bottles Exported to that country
Total Export Sales to that country
Total Export Sales overall
Work with organizations within top two export markets (Scandinavia and USA) to track consumer data and see if the labeling is working or if it is confusing to the general consumers.
Also could use that data to grow their emerging markets of Russia and the UK.
After initial phase evaluate the growth in those market and make changes to labeling if needed.

16. Aligning VDP to Burgundy Classification (Recommendations Continued)
One area that could help the VDP is to align their new classification even closer to the burgundy AOC classification, through this it could help consumer easily understand what is in the bottle.
Possible New VDP Classification
Gustwein (Basic Level)= Keep this it aligns with Bourgogne Level Classification
Ortswein (Second Level)= Keep this it aligns with Village Level Classification
Erste lage= Make this a mandatory marking and classification instead of an option for VDP producers.
The VDP would have to decide which areas would deserve this classification and it would have to be closer to the Premier Cru Level Classification
Gross Lage= This classification should be the equivalent of the Grand Cru classification and hold that weight for VDP producers to label their wine, meaning that only producers owning vineyard land identified as Gross Lage would be able to label their wine with this classification (Should be close to 1.4% of all production as in burgundy)
Also the VDP should do away with the Gross Gewach designation in the Rheinghau and make the classification the same across the whole VDP.

17. Observations and Conclusion
VDP and German wine markets are drastically consumed domestically compared to export market.
VDP has shown since the change in labeling not a drastic change in exports. (still over 80% domestically).
Burgundy on the other hand is directly focused on the export market with half of its wines being exported compared to around 20% for VDP/Germany.
Conclusion
The data is to scattered to come to a final conclusion, but it shows that the domestic market has stayed consistent for VDP wines and accounts for over half of the overall sales since Since the change in labeling there has not been that much change, and it is to early to tell if the new labeling will continue to help export sales or challenge the current model of overwhelming domestic sales compared to other models such as with Burgundy.

18. Questions?