The Northern Hemisphere crops are now well underway and the early suspicion is that most if not all will come in average-sized as best. This is due to climatic but also market factors, with vineyard economising and removals – and some grapes going unpicked – in response to slow grape and bulk wine markets. As this month’s Italy page states: “Over the next few years, the industry will undergo a reset, losing vineyard area and businesses, and emerging on the other side more profitable.”
Wine sales at North American and European retail continue to be squeezed by hesitant consumer spending on non-essential items. The tide of post-pandemic inflation has gone out, but it has left behind a residual feeling among consumers that the price of most things is noticeably higher now than it was four years ago, a feeling borne out by the reality: in many cases, earnings increases have lagged inflation, reducing spending power. The resulting economic pessimism – even if underlying fundamentals like employment rates are robust – has been dubbed a “vibecession”. In such an environment, wine’s higher price per alcohol unit versus its ever-proliferating number of rival beverages is a disadvantage.
At the same time, wine is experiencing a generational shift in consumer attitudes toward it. Younger consumers are more likely to perceive wine as – to quote a recent Guardian article focused on the US market – “stuffy, unhealthy, or just ‘mid’” (i.e., mediocre), while recent negative health messaging around wine consumption will not have helped boost its popularity among any age group.
The bulk wine and grape markets were quiet through August into early September, as is typical when the Northern Hemisphere is on its summer holidays. All eyes, in any case, are on the harvests. Bulk activity has occurred in Argentina, which is slowly but steadily selling through its Malbec inventory, and there has been demand for 2024 white grapes in California, potentially due to signs the Central Valley’s white grape crop is coming in lighter than average. Contracting of 2025 white grapes is underway in Chile, at higher pricing than on the 2024 grapes, reflecting Chile’s low white wine stocks; its 2024 varietal whites are expected to be sold out by January.
White wine supplies in many markets – including Chile, southern France, Spain, and South Africa – are indeed limited. It feels like shorter crops over the past two years have helped move white wines into a supply-demand balance, at least on some whites, in some markets, some of the time. Red wines continue to constitute the majority of global inventory and vines bearing red grapes have likely been the focus of the uprooter’s digger.
In the meantime, attractive bulk wine opportunities are many – including on some wines typically destined for premium bottled wine programmes – and Ciatti’s global network is able to provide the full spectrum: don’t hesitate to get in touch. In the meantime, read on for the latest from each market.