The 2025 Southern Hemisphere harvests are now in full motion, presenting a mixed picture across major wine-producing regions.
While white grape tonnages are exceeding expectations in Australia and New Zealand’s bunches are notably large and heavy, Argentina and South Africa’s crops appear to be aligned with their downwardly adjusted long-term averages at best. Meanwhile, Chile’s hotter-than-usual growing season has raised concerns of a significantly lower crush volume, further tightening supply.
Innovative Adaptations in Production
As consumer preferences shift, producers are diversifying their portfolios:
- Cognac Ugni Blanc is being utilized not only for traditional wines but also sparkling bases, lower-alcohol wines, and RTD (Ready-to-Drink) spritzers/cocktails.
- Australia is increasing white wine production at the expense of reds, adapting to market trends.
- California remains a leader in the low/no-alcohol wine segment, catering to health-conscious consumers.
At the same time, premium-quality wines, which traditionally dominated bottled wine sales, are enhancing the overall quality of bulk offerings—a silver lining for buyers seeking superior options at competitive prices.
France:
- Incremental market activity: Slow start to the year but steady movement.
- Stable pricing: Prices remain generally in line with last year.
- Highest demand: For Vin De France and higher-end wines, while the mid-market is quieter.
- Competitive entry-level pricing: Some wines are priced lower than Spain’s, offering good volume opportunities.
- Good availability: 2024, 2023, and non-vintage VDF red, white, and rosé wines, along with 2024 IGP whites and rosés.
Spain:
- Elevated pricing: Bulk wine prices continue to rise, especially for generic and varietal whites.
- Slowing transactions: Buyers struggle to secure supply at desired prices.
- Alternative sourcing: Interest is shifting to France and Chile due to high Spanish prices.
- Sulfated must market paused: Pricing remains too high for active transactions.
- Buyer recommendation: Secure bulk wine volumes based on sample approval.
Italy:
- Limited supply & rising prices: Generic whites and reds are scarce, with elevated pricing. Pinot Grigio and Chardonnay are also becoming more expensive.
- Incremental buying: Purchases are proceeding cautiously.
- US export surge: Shipments increased post-election due to potential import tariffs, but US demand may slow in coming months.
- Prosecco & Pinot Grigio resilience: Prosecco DOC (+11.5%) and Pinot Grigio (+2.0%) bottlings remained strong in January.
- New wine labelling law: Italian wines under 8.5% ABV can now be labelled as "wine" (excluding IGT, DOC, DOCG).
California:
- Smaller-than-expected 2024 crop: Estimated at 2.84 million tons, with lighter yields and some uncontracted grapes left unpicked.
- High bulk inventory: Estimated at over 35 million US gallons, creating opportunities for buyers.
- Competitive pricing: Available on generic wines, White Zinfandel, and traditional bulk options.
- Growing interest in low/no alcohol wines: Demand increasing in the “better-for-you” and low-calorie segments.
- Coastal wines for mid-tier programs: Available with one-year and multi-year deals.
- Bulk market activity: Slight increase in domestic demand, while international interest remains steady.
Argentina:
- Significant 2024 vintage inventory: Despite improved exports, Argentina still holds large volumes of wine.
- Popular wines remain available: Generic whites, GJC, and all Malbec quality tiers are still on offer.
- Lower and negotiable pricing: Prices have dropped since mid-2024 and may be flexible based on volume and loading terms.
- 2025 harvest outlook: Expected to align with the new average of 2.2 million metric tons.
- Wineries reluctant to accept grapes: Due to high wine inventory, some grapes may go unpicked.
- Stable grape prices: No significant changes from 2024 levels.
Chile:
- Limited availability of 2024 wines: Especially generic whites, with prices higher than a year ago.
- Ongoing buying activity: Incremental purchasing of 2024 wines and inquiries into 2025 availability.
- 2025 yield expectations: Likely average or slightly below due to vineyard removals over the past two years.
- Moderate price increases: Suppliers aim to stay competitive in the global market.
South Africa:
- 2024 wines sold out: Focus is now on the 2025 harvest and pre-contracting.
- Export pricing: Likely influenced by strong domestic demand and early international enquiries, but still negotiable to retain market share.
- Smooth growing season: Vineyards are in good condition, with early harvesting proceeding well.
- Crop size expectations: At least 1.18 million tons (equal to 2023), but a larger harvest is needed to meet demand and rebuild exports.
Australia:
- The 2025 harvest of inland, irrigated white grape varieties is expected to be larger than anticipated, as growers focus on white grape production over reds.
- The harvest will finish earlier than usual, by the end of March, due to continued heat compacting the harvest.
- The Wine Equalisation Tax (WET) rebate cap is increasing by AUD 50,000 per annum, benefiting producers with their own or leased wineries selling packaged wine domestically.
- Endeavour Group is closing a contract bottling hall in South Australia due to reduced demand, and both Endeavour's Shingleback and Treasury Wine Estate's Penfolds cellar doors are closing.
New Zealand:
- The 2025 crop potential remains large despite a cool January and February, with large bunch sizes and weights observed.
- Competitive pricing persists for 2023 and 2024 Marlborough and New Zealand Sauvignon Blanc.
Final Thoughts: A Market in Transition
While economic and geopolitical uncertainties continue to pose challenges, opportunities exist for those willing to adapt and explore new sourcing strategies. The industry’s ability to stay flexible, meet shifting demand, and leverage pricing advantages will define its success in the ever-evolving bulk wine market of 2025.
Source: Ciatti