By Gabrielle Vizzavona
“Greta Thunberg and her generation have completely different expectations about the environmental and social impact of wine production. The industry must understand that and tap into it if it wants to recruit new consumers”.
Since 1955, the sale of beverage alcohol in Sweden has been run by a state monopoly called Systembolaget with very particular operating rules. Johan Larsson has been part of the organisation’s team of ten wine buyers since 2010. Tasked with buying French wines, he purchases 32 million litres per year for that one category. Alongside this task, he is also wine consultant to the Swedish royal family and selects the choice of wines and vintages served at official crown dinners. We caught up with him.
Gabrielle Vizzavona: Could you introduce us to Systembolaget?
Johan Larsson: Systembolaget has approximately 440 shops across the country and more than 600 different outlets. Our parliament voted in favour of at least one outlet per locality, even in the most remote parts of the country, where the local grocery store, tobacconist or even gas station can allow customers to choose from our catalogue and get their order delivered. Systembolaget employs around 5,000 people, 350 of whom work in its Stockholm office. There are ten buyers who divide the wine world between them, each in charge of a specific area. We buy 220 million litres of wine per year.
GV: Can you describe your assortment?
JL: The fixed assortment has around 2,400 SKUs of wine, spirits and beer. We enter around 45 new products into this catalogue every year. Just over half of the wines are bought in bag-in-box format. The generic range has been complemented for around thirty years by a fine wine selection, sourced in smaller quantities. It changes twice a month and we do around 700 launches a year. Finally, Swedish consumers also have access to the ordering assortment, which includes the complete range from registered Swedish importers with just over 12,000 items.
GV: How are the wines selected?
JL: The fixed assortment works through a tendering system. Systembolaget’s business model stipulates that we cannot buy wine – or any other product – directly from the producers. We have to do business with Swedish registered importing companies. Having said that, as buyers, we very often go and meet the wine producers in their wineries, go to wine fairs and interact with them a lot, but we always buy the wines from the importers. So if you are a wine producer and you want to sell your wines to Systembolaget, you must first align with a registered importer. We plan our launches normally on an 18-month basis. We communicate our request to the industry, predominantly to the importing companies and then, six months prior to launch, we make up a formal tender request for a specific product. For example, for a Côte du Rhône villages retailing hypothetically for 8 euros equivalent at Systembolaget, we specify the vintage and the desired vinification method as well as a taste and profile description. The importers and the producers respond to this request for tenders, and we ask for samples of the wines that we think are most interesting. When these arrive, usually at least forty of them, they are blind tasted in two stages by a group of tender tasters, including the buyer in charge of the region or category. A first tasting session is aimed at discarding a majority of the samples that do not match the taste and profile description. We conclude normally on the winning wine in the second session.
GV: How many wines does each buyer taste a year?
JL: Including exhibitions, visits, tastings and the assessment of importers’ selections, between 8,000 and 9,000 wines are tasted.
GV: How is the profile of Swedish consumers and their expectations researched?
JL: Our marketing and statistics department and the category managers, working alongside the buyers, profile Swedish consumer patterns in great detail, and not just for alcoholic beverages. They look at food, fashion and tourism patterns. They then detail this broad picture down to gauge the effect on the alcoholic beverage market – how drinks are expected to taste, how they should be priced, retailed and packaged.
GV: How do you explain the popularity of the bag-in-box format in Sweden?
JL: The bag-in-box phenomenon grew from the 2000s onwards. The Swedes not only love wine, they are also pragmatic. We like its practical side. Our lifestyle involves a lot of outdoor activities, we are close to nature and a large part of the population owns a small boat. This format is ideal for travelling and moving around, unlike the glass bottle. The box also allows you to help yourself to a glass or two without the wine spoiling.
GV: The format is still not widely accepted in many European countries, starting with France…
JL: Sweden is a much less traditional market than France. We’re experimenting with a lot of packaging – PET bottles, Tetra Pak and even 75 cl paper bottles. We’re trying to get the industry to work with lightweight glass and reduce its carbon footprint. It’s important for us to have a more sustainable approach in our shops, even though of course the glass bottle will never disappear.
GV: The Swedish market is at the forefront of environmental issues and has made eco-friendly initiatives a core concern. Is this reflected in your range of certified organic or biodynamic wines?
JL: The share of organically-certified wines in our permanent catalogue is 24%. I don’t think there is any retailer in the world that sells as many organic wines as we do at the moment. Although we are reaching a plateau and their growth is no longer in the double digits like it has been over the last few years, we would like to at least maintain the current share. Natural wines are also a much-debated topic, as they have no clear definition or certification. By volume, they represent only a fraction of the wines we sell, but the attraction of these wines is always going to be quite high and they prompt debate, which is healthy for the wine industry.
GV: Your assortment includes wines from more than 15 countries. Which are more popular, Old World or New World wines?
JL: The Swedish market has become more mature over the past few years. Swedish consumers were educated with New World wines, which offer great quality at lower prices, but their perception is changing in favour of Old World wines. They are also looking at sustainability and realise that buying New World wines puts a heavier carbon footprint on the world, so like with other products, it gives them a sense of comfort when they find wines produced as close to Sweden as possible. I often say that wine is the cheapest way to travel, and if you want to relive a weekend, what better way than to drink the wine, and Swedes now tend to travel much more in Europe than in the New World. The romanticism of wine has come back into fashion and a lot of people feel that Old World wines are slightly more romantic than New World wines. Italy, France and Spain account for about a third of total sales. Italy is twice as big as France with 60 million litres sold compared to 32 million litres, followed by 27 million litres for Spain. We carry approximately 400 French wines in our fixed assortment and this includes roughly 80 Champagnes, so in terms of SKUs interestingly it is by far the biggest category. For the New World, South Africa easily dominates the range followed by Australia, Argentina, Chile and the United States.
GV: In your opinion, what are the major forthcoming trends in Sweden?
JL: I think the biggest trend is that people will consume less, but also premiumise as they have for the last couple of years. Younger consumers are slowly turning away from alcoholic beverages to non-alcoholic beverages. Greta Thunberg and her generation will start buying wine legally from us in three years’ time. That generation has completely different expectations and you have to adapt. How will they feel about heavy glass bottles and wines being transported across the globe? They will have a completely different set of demands about certification and the environmental and social impact of wine production – the industry has to understand that and tap into it if it wants to recruit new consumers.