The World of Wine: Visualizing an Industry Ripe for Disruption
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Visualizing an Industry Ripe for Disruption
View the full-size version of this infographic by clicking here.
Winemaking is often thought of as a symbol of transformation.
While the fermented drink dates back 9,000 years, the wine market is now experiencing its own transformation due to technological innovation, and the introduction of new business models. Generating $370 billion in revenue in 2019, the global industry is expected to grow considerably over the next decade—but not as we know it.
Today’s infographic from Raconteur explores wine consumption by region, and looks at how changing tastes are driving a new era of the millennia-old staple.
Will the industry continue to get better with age, or will it join the countless other industries that have fallen victim to disruption?
The Wine Leaders of the World
To start, let’s take a look at the countries around the world that have the biggest economic footprints linked to the trade and consumption of wine:
Exports: Spain is the largest exporter of wine globally, producing 21 million hectoliters of volume in 2018, followed by Italy with 19.7 million hectoliters.
Imports: Germany leads on imports with 14.5 million hectoliters of volume in 2018, while the UK is the second-largest importer with 13.2 million hectoliters.
Consumption: The U.S. currently leads on wine consumption, with Americans drinking an average of 3.7 liters per person—generating almost $50 billion in revenue.
|#1||🇺🇸 United States||$49.5B|
Currently, 80% of all wine consumed within China is produced domestically, and with a growing middle class, there is a huge potential for the Chinese industry to gain ground in comparison to other leading wine markets.
Rapidly Changing Tastes
While older generations prefer wine to other alcoholic beverages, spirits are the drink of choice for those aged 18 to 27. In fact, only 27% of this age group prefers wine to spirits or beer, meaning wine companies will need to adapt to these younger audiences and their differing values.
Marketing could create an opportunity to connect with this audience in a more meaningful way, with packaging having the most potential to sway their decision making process by providing a number of unique benefits:
- Smaller serving sizes
Interestingly, canned wine is already a $70 million industry in the United States — and by 2025, it could make up 10% of total sales.
New Threats to the Industry
Along with changing expectations for packaging, millennials also crave new experiences, with more alternative options appealing to this age group, such as cannabis-infused beverages, craft beer, and whiskey.
Dealcoholized cannabis-infused wine is a new product innovation that could also appeal to this audience and have direct implications for the industry—but while cannabis companies have shown an interest in the category, collaboration with the tech industry is proving to be the most transformative.
When Two Valleys Collide
Technology is squeezing every opportunity it can get out of the wine industry, impacting different parts of the supply chain.
Drones are making farms and vineyards across the globe more efficient, while new technologies used to improve harvesting, sorting, and filtration during the winemaking process are also cropping up and providing new solutions to antiquated problems.
Traditionally, decanting wine has been a slow and delicate process. Smart wine decanters however, can expedite that process.
These decanters use air filtration systems to remove impurities and enhance the aroma in just a few minutes—streamlining the decanting process, which typically takes around three hours.
Impact on the Environment
Industry experts predict that packaging such as edible bottles made from sugar substitutes, and compostable, non-plastic glass will replace glass bottles.
Meanwhile, QR codes have the potential to replace paper labels on wine bottles entirely, and a growing number of wine brands are already using augmented reality to deliver more immersive experiences to end consumers.
For an industry steeped in history and tradition, the future holds exciting potential for new innovations that will transform the way we look at wine forever.
Which Countries Hold the Most U.S. Debt?
Foreign investors hold $7.3 trillion of the national U.S. debt. These holdings declined 6% in 2022 amid a strong U.S. dollar and rising rates.
Which Countries Hold the Most U.S. Debt in 2022?
Today, America owes foreign investors of its national debt $7.3 trillion.
These are in the form of Treasury securities, some of the most liquid assets worldwide. Central banks use them for foreign exchange reserves and private investors flock to them during flights to safety thanks to their perceived low default risk.
Beyond these reasons, foreign investors may buy Treasuries as a store of value. They are often used as collateral during certain international trade transactions, or countries can use them to help manage exchange rate policy. For example, countries may buy Treasuries to protect their currency’s exchange rate from speculation.
In the above graphic, we show the foreign holders of the U.S. national debt using data from the U.S. Department of the Treasury.
Top Foreign Holders of U.S. Debt
With $1.1 trillion in Treasury holdings, Japan is the largest foreign holder of U.S. debt.
Japan surpassed China as the top holder in 2019 as China shed over $250 billion, or 30% of its holdings in four years.
This bond offloading by China is the one way the country can manage the yuan’s exchange rate. This is because if it sells dollars, it can buy the yuan when the currency falls. At the same time, China doesn’t solely use the dollar to manage its currency—it now uses a basket of currencies.
Here are the countries that hold the most U.S. debt:
|Rank||Country||U.S. Treasury Holdings||Share of Total|
|3||🇬🇧 United Kingdom||$655B||8.9%|
|6||🇰🇾 Cayman Islands||$284B||3.9%|
|11||🇭🇰 Hong Kong||$221B||3.0%|
|16||🇸🇦 Saudi Arabia||$120B||1.6%|
|17||🇰🇷 South Korea||$103B||1.4%|
As the above table shows, the United Kingdom is the third highest holder, at over $655 billion in Treasuries. Across Europe, 13 countries are notable holders of these securities, the highest in any region, followed by Asia-Pacific at 11 different holders.
A handful of small nations own a surprising amount of U.S. debt. With a population of 70,000, the Cayman Islands own a towering amount of Treasury bonds to the tune of $284 billion. There are more hedge funds domiciled in the Cayman Islands per capita than any other nation worldwide.
In fact, the four smallest nations in the visualization above—Cayman Islands, Bermuda, Bahamas, and Luxembourg—have a combined population of just 1.2 million people, but own a staggering $741 billion in Treasuries.
Interest Rates and Treasury Market Dynamics
Over 2022, foreign demand for Treasuries sank 6% as higher interest rates and a strong U.S. dollar made owning these bonds less profitable.
This is because rising interest rates on U.S. debt makes the present value of their future income payments lower. Meanwhile, their prices also fall.
As the chart below shows, this drop in demand is a sharp reversal from 2018-2020, when demand jumped as interest rates hovered at historic lows. A similar trend took place in the decade after the 2008-09 financial crisis when U.S. debt holdings effectively tripled from $2 to $6 trillion.
Driving this trend was China’s rapid purchase of Treasuries, which ballooned from $100 billion in 2002 to a peak of $1.3 trillion in 2013. As the country’s exports and output expanded, it sold yuan and bought dollars to help alleviate exchange rate pressure on its currency.
Fast-forward to today, and global interest-rate uncertainty—which in turn can impact national currency valuations and therefore demand for Treasuries—continues to be a factor impacting the future direction of foreign U.S. debt holdings.
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