Global wine consumption at historic low level

Global wine consumption at historic low and eroding vineyards. OIV report outlines a 2024 to forget (Oiv= international organization of vine and wine)

Production, hectares and world consumption falling. Encouraging signs come from international trade, which stands at 35.9 billion euros.

It was expected that 2024 would have at least slightly better figures than 2023, but this was not the case. Production, consumption and vineyard area continued the downward trend of recent years, with only international trade holding up somewhat under the influence of an unfavorable economic climate.

The data presented on Tuesday, April 15, by OIV Director General John Barker, set the measure of a year, the year just ended, described by top management of the International Organization of Vine and Wine as "challenging," in the usual presentation of the world economic situation. Inevitably, the wine sector must deal with climate change (2024 was the warmest year in Europe, according to Copernicus data) and economic-social factors that cause many key markets to limit their purchases and consumers, struggling with rising prices, to limit their purchases.

Global vineyard decline : grubbings weigh heavily

Global vineyarderosion continued in 2024, falling to 7.1 million hectares (-0.6% from 2023), the fourth decline in a row. What weighed particularly heavily was the grubbing up of vineyards in various wine-growing regions, both in the southern and northern hemispheres, both for viticulture (which weighed most heavily) and for growing table grapes and raisins (as in Turkey). The EU-27, with 3.2 million hectares, maintains its leading position, led by Spain (930 thousand hectares, -15%), France (783 thousand hectares, -0.7%) and Italy (728 thousand hectares, +0.8%).

China, the world's third largest vineyard with 753 thousand hectares, ahead of Italy, lost another 0.4% in 2024 (there were 770 thousand hectares in 2015). Vineyards in the Americas are also declining, with the United States, Argentina and Chile, while Brazil is growing for the fourth consecutive year. Noteworthy is the increase in vineyard in India to 185 thousand hectares by 2024 with annual growth of 4.5% from 2019.

Production 'volatile' and at the mercy of the weather

World wine production (excluding grape juice and must) is entering another period of great volatility, according to the OIV, and is estimated at 225.8 million hectoliters, down 4.8% from 2023, when production was already at an all-time low. A level second only to that of the distant 1961 (only 219 million hectoliters). Late frosts, heavy rains and prolonged drought affected both hemispheres of the world.

The EU-27 lost 3.5% in volumes, with Italy, the largest European and world producer, recovering 15% at 44.1 million hectoliters from a very bad 2023 (but -6% from five years ago). France stands out at -23.5%, the worst figure since 1957 (due to climate and grubbing). Spain rose 9.3% in volumes, to 31 mln/hl, thanks to a good harvest in Castilla-La Mancha. Negative signals for Germany, Portugal and Romania, while Russia recovered 19% to 5.4 mln/hl of wine. China is estimated at 2.6 mln/hl (-17%); the US is down 17.2% in double digits.

In the southern hemisphere, wine produced in 2024 lost 3.6% (45.8 mln/hl) due to minus of 2.6% in Chile, Brazil and South Africa. While Argentina (at 10.9 mln/hl) recovered 23.3% of volumes. In Oceania, Australia's +5.3% (10.2 mln/hl) was offset by New Zealand's -21.2%, where vineyards were hit by a huge late frost. The first production estimates for 2025 in this hemisphere show an increase of +2.6% to 47 million hectoliters: all countries are recovering except Chile. This would be the first plus sign after four negative years.

Consumption at historic low: prices are also to blame

Wine consumption is at an all-time low. According to OIV data, 2024 ended with 214.2 million hectoliters, down 3.3% from 2023. This is the worst level since 1961 (213.6 million hectoliters): a negative record that could well be broken next year at this rate. Central to this is the decline of the Chinese market, which is losing a sloppy 2 million hectoliters a year from 2018. Several additional factors determined the overall situation, according to director Barker: lockdowns in the pandemic period, geopolitical tensions, inflationary pressures following the energy crisis following the Russia-Ukraine war in 2022, and reduced consumer purchasing power in the face of rising prices and uninspiring vintages in 2023 and 2024. Wine sales also declined in more mature markets, due to a combination of factors combining structural trends and cyclical economic factors. But more importantly, consumer behavior changed.

Wine consumption in the United States down 5.8%

In the ranking of wine-consuming countries, the United States (33.3 million hectoliters) stands out, also the world's largest market in 2024, and France with -3.6%. Against this trend, there is Italy with +0.1% (22.3 million hectoliters and 47.2 liters per capita), then Germany and the UK with -3% and -1%, respectively, while Spain (+1.2%) and Russia (+2.4%) are growing.

Another blow - but no longer newsworthy - for China, which now ranks 10th among global consumers, at -19.3% for a market worth only 2.6% of global consumption. Double-digit declines were also recorded for Canada (-6.4%), the Netherlands (-8.1%), Brazil (-10.1%) and Romania (-11.4%), but Switzerland and Japan also lost between 4% and 5% of their volumes.

Encouraging signs of global trade

Global wine trade has been hit by high prices and generally declining demand. The result for 2024, in terms of exported volume, was -0.1% (for 99.8 mln/hl), thanks to rebounds from Chile, Australia and Portugal, which offset negative signals from Spain, Canada and Germany, and, in terms of value, -0.3% to 35.9 billion euros. This is still a high turnover, considering that it remains close to the 2023 level. Moreover, the internationalization index of trade rose to 47 percent. "This is a positive and encouraging sign," Barker said. The average price per liter is 3.6 euros, down slightly from last year. A trend the OIV says is linked to an acceleration in recent years of the "premiumization" phenomenon and the effect of low production on the rise in world wine prices. Italy leadsthe ranking of exporters in volume (21.7 mln/hl), while France is the leader in value (11.7 billion euros), but has lost 2.4% compared to 2023.

My additional comments from our own sales figures:

A/ 1 in 2 bottles sold are from wineries in Alto Piemonte. Price quality is a Ghemme DOCG and Gattinara DOCG lower than the Barolo's and Barbaresco and the bar is just as high. Also not to forget the DOCs Lessona, Bramattera, Coste della Sesia, Sizzano etc... Alto Piemonte is really on the rise!

B/80% of our clientele is in the 55 to 75% age group. Also at tastings, 80% are in the 45 to 75 year old category, so slightly younger.

C/to even 98% of customers and potential customers visit the webshop from their cell phones. We don't think they order from their mobile. That's really a rejuvenation of the say to 10 years ago strategy.

D/Younger audience does spend more budget on wine (especially in Belgium) and orders less bottles of wine for the over big number.

Source of this figure-based article: Gambero Rosso