Having largely adhered to a normal timetable, the Northern Hemisphere harvests are now winding down: France and Italy are currently projected to produce crops short of their five-year averages by 11% and 12.8% respectively, while California is on course for a crop – guesstimated at 3.2-3.3 million tons – short by long-term historical standards but in fact not far off the 3.5 million tons that is the five-year average since the state’s 2018 crop, the last to reach the 4-million-ton mark. Only Spain’s crop is expected to near its average, although a rainy end to the growing season is likely to rein-in availability of 11%+ alcohol wines.
None of this news has stimulated a great deal of extra activity on the bulk market. Last year Italy experienced its shortest crop in five decades, with ramifications for demand levels in Spain and, in turn, ripple effects further afield. Partly in response to that demand, Spanish prices have increased and Italy’s crop, although short of the average again, is 7% larger this year versus last. Consequently, the buying campaign is starting noticeably calmer, more accurately reflecting the underlying wine sales fragility.
It was hoped that 2024 would bring a stabilisation of sales volumes after a period of retailer/distributor destocking following pandemic-era stockpiling, but it has not come to pass: in the US, for example, wine’s total retail sales volumes fell more than 6% in the 12 months to 10th August, and it is likely – with similar economic and demographic factors at play – comparable trends are occurring in the major European markets, of which the OIV found that, in 2023, only Spain registered a growth in sales. Growers in both hemispheres have been pushing for higher grape prices to cover elevated input costs and shorter crops, but wineries and bottlers – caught in the middle – are still seeing lethargic retailer/distributor demand. Margins have become squeezed, cashflow tight, assets devalued and the ability to borrow reduced; the end result will be a smaller area under vine.
Forecasting future sales is still challenging, to say the least. Entering the important October-December period, consumer confidence in the US and UK is roughly in line with where it stood at the same stage last year (when festive-season wine sales volumes went on to be disappointing), while confidence in France, Germany, Italy and Spain enters OND slightly higher than last year. The industry will be hoping for, rather than expecting, a final-quarter sales boost.
After a year of shorter crops, however, some bulk items – mainly generic wines and varietal whites – have become harder to come by; potential buyers of 2025 varietal whites from Chile and South Africa are recommended to get in touch earlier than normal. Reds are generally more abundant, with many highlyattractive opportunities available on some very good-quality wines. The Ciatti team stands ready to match-up buyers with suppliers and assist in fulfilling justin-time needs: get in touch with us direct. In the meantime, read on for the latest news from each market.