Another month of limited buying activity has passed by on the world’s bulk wine markets, with the traditional lull during the Northern Hemisphere summer holiday season now exacerbating the quietness. Pockets of activity exist – for example, on Chile and Australia’s 2023 varietal whites, Italy’s Prosecco and Pinot Grigio, South Africa’s generic red for domestic market consumption – but these feel like exceptions in an altogether quiet landscape.
The Northern Hemisphere’s 2023 crop picture appears mixed, but any uncertainty about coming volumes has failed to stimulate much buying activity. With vineyard development running 2-4 weeks behind in California, and mildew pressure high, it remains too early to make an educated guesstimate of the crop size there. Mildew has also been a significant issue in Bordeaux and in central and southern Italy, contributing to expectations of shorter crops; the French crop size otherwise appears good, ditto northern Italy’s. Meanwhile, May and June rainfall helped protect Spain from the subsequent heatwaves. Prices have risen in Italy mainly due to seller speculation and not – yet – the result of a demand uptick. Prices elsewhere are stable or negotiable.
News from the Northern Hemisphere vineyards currently feels like it is commanding less of the conversation than is normal for the time of year, given rising pessimism in all major producer countries not only about the short-term economic squeeze but the long-term drift away from wine consumption in all mature markets. We are now 16 years past peak global wine consumption – in 2007 – and the slow decline in volume demand since then is starting to be felt in an attrition on sales numbers, industry confidence and – yes – morale, illustrated by some Bordeaux vineyards being left to mildew. Red wine and especially Cabernet is in a highly imbalanced supply-demand position globally and – of the major wine-producing countries – all but Italy, South Africa and New Zealand produce more of it than the whites favored by younger demographics (if they drink wine at all).
According to Wine Intelligence, ‘Generation Z’ consumers (aged 18-24) represent just 5% of wine consumption in the UK and ‘Millennials’ (aged 25-39) represent 21%, while ‘Boomers’ (aged 55+) command more than double those two demographics combined, at 48%. Generation Z and Millennial consumers – interested in low and no-alcohol wines, natural or organic wines, canned wines, RTD wine spritzer drinks, and sparkling wines, enjoyed as just one part of a growing repertoire of alcohol drinks – are far harder to recruit with an “unstoried” GBP6.00 bottle of standard red than their parents and grandparents were.
The ongoing slowness of the bulk market has opened up some attractive pricequality opportunities should there be buyers out there with routes to market and a brand vision. Likewise, there are opportunities for suppliers – for the very latest and most detailed picture on pricing, knowledge which would enable you to make the best-informed decisions in the present low-visibility environment, don’t hesitate to get in touch with us directly. The Ciatti team stands ready to help pair up suppliers with buyers. In the meantime, read on for detailed updates on each market.
Read the full report