January activity was mainly confined to the Southern Hemisphere as its 2023 harvests get underway and, as is usual, crop expectations begin to influence bulk wine buying behaviour. The potential for one of the smallest crops of the past 20 years in Argentina has stimulated some activity there and in neighbouring Chile, while conservative buying in South Africa thawed in the new year, as international buyers sourced remaining 2022 wines to last them until vintage 2023 is ready.
Australia – like Argentina, expecting a shorter crop – has been receiving good interest levels on its entry-level reds. Very competitive pricing on these helped Australia’s bulk wine export volumes grow by 7% in 2022, driven by significant increases in shipments to the US (+67%) and Canada (+81%). China’s opening up since January – and the growing prospect that it might reduce its import tariffs on Australian wine – could be good news in the global struggle to reduce red wine inventories.
In the Northern Hemisphere, meanwhile, the French government has acted after lobbying from growers: the country’s second crisis distillation plan in four years will roll out this summer. Rosé carryover and old, non-vintage Vin de France reds are likely priorities for this scheme. Italy’s industry, too, is pressing its own government to announce something similar; again, red wines would be a priority.
France and Italy have been receiving steady demand for their 2022 whites: Italy’s Prosecco DOC and Pinot Grigio DOC, and southern France’s IGP white varietals, continue to sell well. But the reds remain becalmed, as they have been for two years or so, and rosé is also becoming an issue. As this month’s France page states: “The rosé market has become decoupled from the white wine market over the past year or so, proceeding at an incremental pace closer to the reds.” South Africa, too, experienced disappointing European sales of its 2022 varietal rosés and is consequently questioning how much to produce this vintage. This situation is likely at least partly attributable to southern French overproduction – as wineries sought alternatives to producing reds – compounding a lag in rosé turnover in 2020-22 due to COVID’s impact on the on-trade and summer-season gatherings.
Amid soul-searching as to why overall wine sales volumes in the US market are stagnant at best, the Californian industry has identified areas of growth, including: sparkling wines, “refreshing”, “lighter” whites; low-alcohol or non-alcoholic wines. While Champagne and Prosecco popularity transcends age, the other options listed are disproportionately favoured by younger demographics, i.e., the consumers of the future. Perhaps due to the influence of RTD cocktail drinks, spritzers, canned wine – and the trend towards reduced alcohol consumption or abstinence altogether – younger consumers prefer lighter wines.
Consumer confidence waxes and wanes, but there are two underlying structural challenges the wine industry must address this year and beyond: reducing the overproduction of wines that have seen long-term sales stagnation or declines in mature markets, and finding a way to harness the positive trends without, in turn, overproducing on those as well. In the meantime, there continues to be an array of opportunities for buyers and sellers, and Ciatti can draw on decades of experience to help realise them: don’t hesitate to get in touch. Read on for the latest from the bulk wine and grape markets.