May brought an important milestone on the road back to post-COVID normality with the first ProWein fair in three years. While there were – understandably – 17% fewer exhibitors and 38% fewer visitors than in March 2019, it was great to see some old faces in person after so long, as well as meet new ones.
The Southern Hemisphere producers were able to showcase some of their freshly-produced 2022 wines. Chile, Australia, New Zealand and South Africa have all been reporting crops near their long-term averages; whilst down from the average, Argentina’s 1.9 million metric tons is of a good size given the country’s large carryover. Whites continue to lead demand, with South Africa’s supply of 2022 Chardonnay, Pinot Grigio and premium Sauvignon Blanc already highly limited, Australia and Chile receiving interest on whites that greatly exceeds interest on reds, and New Zealand Sauvignon Blanc able to command bulk pricing at around NZD6.00/litre (EUR3.60, USD3.80) ex winery.
The red-white split is replayed in the Northern Hemisphere: France is effectively sold out of its 2021 whites and Spanish supply is limited, but both countries possess large supplies of uncontracted standard and entry-level red wine. The slow retail sales that reds – and to some extent rosés – have been experiencing is compounding the logistical delays getting the wines onto retail shelves in the first place, meaning that on some wines in some instances there remains a backlog to load, ship and retail before thoughts can turn to the 2022 vintage. While drought or drought concerns persist in many Northern Hemisphere growing areas, and June brought hailstorms to several areas of France, estimates are mainly for average-sized crops, further dragging back buying activity.
The global supply chain crisis, the shortage of dry goods and spiralling fuel and energy prices were regular topics of discussion at ProWein. Should it continue, annual inflation past 8% in the US, Eurozone and UK is likely to drag back consumer spending in the second half of 2022 and potentially exacerbate the supply chain problem, as workers lobby for pay rises that keep up with inflation. There are signs some buyers are seeking to switch to more local sourcing in order to cut out as much of the supply chain disruption as possible.
This time last year we said: “The Northern Hemisphere autumn will be a litmus test as to whether vaccines have truly broken the cycle [of lockdowns] and so paving the way for the first ‘normal’ year, 2022, since 2019.” A year on, COVID-19 already feels like something of the past in many countries, but the shock it gave global business – subsequently compounded by the outbreak of the Russia Ukraine conflict this February – is still being felt and has ensured that, although pulling clear of the pandemic itself, 2022 is another year far from the old normal.
For businesses, anticipating and projecting the future has not been this challenging for many years. But there’s very little Ciatti, with its decades of experience, has not seen before: don’t hesitate to get in touch if you need help finding and harnessing the latest opportunities. In the meantime, read on for detailed updates from each market.