To Make or to Buy? A Managerial Trade-Off of Winemaking Process in the Burgundy Vineyards

Georges Giraud () and Abdoul Diallo
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Georges Giraud: University Bourgogne Franche-Comté
Abdoul Diallo: AgroSup

Chapter 20 in The Palgrave Handbook of Wine Industry Economics, 2019, pp 389-401 from Springer

Abstract: Abstract The share of harvest sold as fresh grapes, grape must or juice increased from 10% to 16% between 2000 and 2010 in the French wine-producing region of Burgundy. This outsourcing pertains to the core stage of business for wineries: the winemaking process. We explore the strategies of 3430 wine estates operating in Burgundy in 2011 with respect to outsourcing versus integration of winemaking. A cluster analysis was carried out in order to identify the main differences among Burgundian wine estates in terms of winemaking outsourcing versus integration. A principal component analysis was then used to highlight the latent variables underlying the different strategies. Finally, the difference in profitability existing between wine-grape growers making their own wine and those outsourcing the winemaking process is shown. The results indicate that winemaking integration has a positive effect on estates’ profitability in Burgundy.

Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-319-98633-3_20

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DOI: 10.1007/978-3-319-98633-3_20

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