Ask Mike Carter! Why is there a bottle shortage to the wine industry?

Owen Marsh asks why is there a bottle shortage to the wine industry, will it affect wine production, and what is being done to alleviate the problem?

Glass packaging is in tight supply globally. And according to an recent AT Kearney report the global glass industry is experiencing an intense shift in the balance of power between glass producers and customers. The food and beverages sector has been the hardest hit and is paying the highest price and it is unlikely this industry will ever again be a “buyer’s bonanza”. This means companies that require glass packaging must change their priorities and strategies.

The good news is that in South Africa the glass shortage is something of the past. Consol Glass which supplies about 75% of glass bottles to the wine industry have ramped up capacity in the Western Cape by 60,000 tons and a further 90,000 in Gauteng. But this is only half the story.

The South African Wine Industry as a whole have historically been very poor at providing local glass producers with meaningful forecasts to adequately plan available production capacity. Over the years forecast accuracy has ranged from a dismal 48% to between 60 – 70% recently. For example, in January the wine industry off-take for bottles was 8 million less than forecast. So careful management of the supply chain from the customer who buys the wine to the glass producer who makes the bottles will be critical to prevent shortages in the future.

Read the full AT Kearney report: Put on your glasses: Avoiding myopia in the global glass industry.