As 2024 draws to a close, the global bulk wine market reveals a year marked by contrasts and adjustments.
While many anticipated a continuation of the sluggish trends seen in 2023, 2024 has shown notable differences, driven largely by supply dynamics rather than a resurgence in retail demand.
A Shifting Market Landscape
The bulk wine market regained some of its traditional character in 2024, with activity levels varying across regions:
- Short and Active: Chile and Italy experienced heightened activity due to smaller harvests and strong buyer interest.
- Long and Less Active: Regions like California and France faced slower markets with surplus inventory.
- Elevated Prices, Lower Activity: Spain and Argentina saw reduced transactions due to higher price points.
- Steady but Unremarkable: Australia’s market remained relatively stable.
- Low on Stock: South Africa, with minimal inventory, struggled to meet demand.
Impact of Two Consecutive Short Crops
Global wine production in 2023 and 2024, estimated by the International Organisation of Vine & Wine (OIV) at 237 and 231 million hectolitres respectively, marks a significant decline from the 2018–2022 average of 267 million hectolitres. This level of production has not been seen since the early 1960s.
Key contributing factors include:
- Climatic Challenges: Adverse weather reduced yields in key producing regions.
- Vineyard Reductions: Growers in France, California, Australia, and Chile have removed vineyards to cut costs.
- Minimalist Farming: Many opted to mothball vines, farm minimally, or leave grapes unharvested, responding to high costs and slow sales.
Stagnant Consumption Trends
The global wine industry continues to grapple with declining retail sales in major markets like the US, UK, and France. Factors such as demographic shifts, rising health consciousness, economic pressures, and competition from alternative beverages are shaping a cautious and incremental approach to wine buying.
Opportunities Amidst Challenges
Despite overarching challenges, 2024 has highlighted several opportunities for savvy buyers:
- Busy White Wine Markets: Pre-harvest contracting for Chile’s 2025 varietal whites has progressed quickly following the short 2024 crush, with supply feeling balanced globally.
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Competitive Offerings:
- 2023 Marlborough Sauvignon Blanc: Now priced competitively with other New Zealand GI Sauvignon Blanc.
- 2024 Southern French Pinot Grigio: Offering pricing advantages over Italy’s.
- Higher-End Californian and Chilean Reds: Ideal for mid-tier programs.
- Argentinian Malbec: Prices dropped by 20% throughout the year.
France
- Southern France's 2024 buying campaign has begun, with rosé leading demand, followed by Chardonnay (white) and Pinot Noir (red).
- It's a good time for new buyers to secure desired qualities and volumes, with both 2024 wines and good-quality 2023 inventory available.
- Pricing for the 2024 vintage is in line with last year or slightly softer, with 2023 wines discounted by EUR 0.10+/litre.
- Attractive opportunities include southern French Pinot Grigio and organic wines.
Spain
- Spanish bulk wine and sulfated must markets are paused due to increased prices.
- Buyers are covering only immediate needs, with bulk exports in September down 30% versus September 2023.
- Some suppliers may negotiate prices depending on volumes and loading terms.
- Pricing could soften in the spring if market slowness persists.
- Wines already secured are loading slowly, reflecting limited retailer demand in key markets.
Italy
- Italian bulk wine supplies, particularly generics, are tight due to two consecutive short crops.
- Prices have risen by up to 20% in recent months.
- Buyers are balancing volume needs against higher prices, causing steady price increases.
- Shipping to the US is expected to accelerate in January ahead of potential new import tariffs.
- Prosecco DOC (+7%) and Pinot Grigio DOC (+3%) bottlings showed positive growth in January-November.
California
- California's bulk wine and grape markets remain slow, with limited new enquiries for 2025 grape supply.
- Bulk wine demand is incremental, and pricing has softened.
- Suppliers are exploring European tenders and export opportunities.
- Bulk wine offerings include:
- High-quality wines for mid-tier programs.
- Standard options, including White Zinfandel.
- Very competitively-priced generics.
- Low/no-alcohol options.
- One-year and multi-year supply opportunities are available.
Argentina
- Argentina's white grape juice concentrate (GJC) priced at USD 1,400/metric ton FCA sees strong demand from Europe.
- GJC exports rose 107.8% from January to November 2024 compared to the same period in 2023.
- Argentina expects 300 million litres of wine carryover by May 2025.
- An average-sized 2025 crush and potential peso devaluation could improve bulk export competitiveness.
- Malbec prices have softened by 20% in 2024, with availability across all quality tiers.
- Domestic wine sales declined by only 2% in January-October despite challenging economic conditions.
Chile
- Chile’s supply of 2024 varietal whites is running low, with brisk pre-harvest contracting for 2025 white wines.
- Grape prices have risen between vintages, but suppliers aim to absorb some increases to stay price-competitive.
- Vineyards are in good condition as summer begins, with adequate water reserves.
- Vineyard removals over the past 18 months are expected to limit crop potential.
- Supply of 2024 reds is available, with a notable portion being high-end wines priced at a premium.
South Africa
- South Africa's supplies of generic wine and 2024 varietal whites are extremely limited.
- Carryover stock as of December 31 is projected to be very low.
- Industry focus has been on loading contracted wines, with little re-released onto the bulk market.
- Rand pricing is stable, though the currency has weakened since September/October.
- Domestic buyers seeking generic wines face complications when considering imports due to Rand fluctuations.
- Export shipment volumes remain historically low due to limited availability.
- The 2025 growing season has started well, raising hopes for a harvest sufficient to replenish supplies.
Australia & New Zealand
- Heavy rainfall in Australia's Riverland and Sunraysia areas has caused some disease pressure.
- Pricing on 2025 Chardonnay grapes has increased by 10%+ following September's frost events.
- White wines, especially Chardonnay and Dry White, remain in good demand.
- Demand for red wines focuses on small batches of competitively-priced options like Dry Red.
- Anticipated pre-Chinese New Year demand from China did not materialize, with the supply pipeline still appearing full.
- New Zealand Marlborough Sauvignon Blanc from 2023 and 2024 vintages remains available.
- The 2023 Marlborough Sauvignon Blanc is now competitively priced with New Zealand GI Sauvignon Blanc.
Preparing for 2025
As the wine industry adjusts to a "just-in-time" buying model, supply-side corrections over the past two years have set the stage for a more balanced market. Buyers looking to capitalize on pricing opportunities and emerging trends are encouraged to act quickly. The Ciatti team, with its global network and up-to-date insights, stands ready to assist in navigating this complex landscape.
In conclusion, while challenges persist, the global bulk wine market is finding its footing, driven by supply constraints and strategic adjustments. With 2025 on the horizon, the industry looks to continue adapting to shifting consumer preferences and market dynamics.
Source: Ciatti