Ciatti Report: Opportunities in global wine market amidst low consumption rates

By James Bayley

Published: 15 May, 2024

The global wine industry is facing challenges as consumption levels drop to their lowest in nearly three decades, as revealed in the State of the World Vine & Wine Sector 2023 report by the Organisation of Vine & Wine (OIV). However, amidst this downturn, insights provided by the report and analyses from Ciatti Global Wine & Grape Brokers point to opportunities for growth and positive change within the market, particularly in bulk wine shipping.

According to the OIV report, global wine consumption in 2023 stood at 221mhl, marking a 2.6% decline from the previous year and reaching its lowest point since 1996. This downward trend starkly contrasts with the growth observed between 1996 and the consumption peak in 2007, despite a significant increase in the global population during the same period.

Various factors contributed to this decline, including a notable decrease in Chinese consumption since 2018, disruptions caused by the pandemic in 2020 (partially offset by a rebound in 2021) and challenges related to energy crises and global inflationary pressures since 2022, which have strained consumer purchasing power.

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However, the OIV report suggests that the decline in global consumption predates the pandemic, indicating deeper-rooted issues such as reduced discretionary spending power among affluent demographics since the 2007-08 global financial crisis, higher costs of wine per serving compared to rival beverages, health concerns and lower interest in alcohol among younger generations.

In response to these challenges, Ciatti Global Wine & Grape Brokers provide market-specific insights and highlight opportunities for growth across different regions, chiefly in the bulk wine sector.

In California, for instance, prices have softened for international buyers seeking higher-end bulk wine deals, presenting opportunities for those interested in quality appellations like Napa Valley Cabernet. Additionally, California can offer reduced-alcohol options to meet the growing demand for such products.

Argentina, with its excellent vintage quality and plentiful bulk wine availability, continues to dominate international enquiries for varietals like Malbec, generic white and GJC (generic juice concentrate). Export pricing in Argentina has softened, making it an attractive option for buyers.

Chile, facing a short 2024 crush, has seen improved export performance, leading to a rise in all bulk wine prices. However, buyers are encouraged to act quickly due to lower-than-expected availability.

In France, while bulk wine demand remains muted, there’s growing interest in non-vintage generic whites and rosés. Frost risks have passed without major incidents, instilling confidence in a good crop size, which could further lower prices.

Spain and Italy are also experiencing shifts in wine pricing and demand, with softening prices in certain categories and regions.

Furthermore, the removal of China’s punitive import tariffs on Australian wines has boosted demand, particularly for entry-level dry red, Shiraz and Cabernet, as well as high-alcohol and high-colour wines.

While the OIV report paints a grim picture of declining wine consumption, insights from Ciatti and other industry experts highlight avenues for growth and resilience within the industry via bulk wine shipping.

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