Ciatti Wine Barrels

Ciatti Bulk Wine Market Analysis – January 2025: A Snapshot of Global Wine Trends

As 2024 unfolded, the global economic narrative shifted from acute crises to a prolonged period of adaptation.

The year was marked by a phenomenon dubbed the "Vibecession," where economic indicators painted a relatively positive picture, but consumer sentiment and behavior lagged behind, mired in uncertainty. This disconnect has profound implications for industries dependent on discretionary spending, including wine.

The "Vibecession" and Its Impact on Consumer Spending

While inflationary pressures began to ease in 2024, the residual effects of rising costs from 2021–2023 lingered. Essential expenses like housing, fuel, and energy absorbed a greater share of household incomes, limiting the capacity for discretionary purchases. For wine, this was particularly problematic:

  • Cost Sensitivity: As a premium-priced beverage, wine faced increased competition from more affordable alternatives like beer, ready-to-drink cocktails, and non-alcoholic options.
  • Changing Preferences: Shifts in consumer behavior—accelerated by economic pressures—saw a growing preference for innovative products like low/no-alcohol wines and wine-based cocktails.

These factors contributed to a continued decline in global wine consumption, as highlighted by the International Organisation of Vine & Wine (OIV) in April. This decline extends a trend that began in 2018, signaling deeper structural challenges within the wine market.

Supply Chain Adjustments: Vineyard Removals and Bulk Market Activity

The contraction in wine demand has rippled through the supply chain, particularly affecting grape growers. In 2024, vineyard removals accelerated worldwide as growers sought to realign production with dwindling demand:

  • Chile: Up to 20% of vineyards were removed across 2023–2024.
  • France: Industry groups estimate that 100,000 hectares in southern France need to be uprooted, with state-supported programs underway.
  • California: Tens of thousands of acres were pulled out or left minimally farmed.

These efforts, while painful in the short term, aim to restore balance between supply and demand, with hopes that consumption will stabilize in mature markets like North America and Europe.

Bulk Wine Market: Signs of Revival Amid Challenges

After years of sluggishness, the bulk wine market showed signs of recovery in 2024, albeit unevenly. Two consecutive years of lighter global wine crops—caused by adverse weather and reduced vineyard investment—tightened supply, particularly for white wines. Key trends included:

  • Price Increases: Generics, varietals, and sparkling base wines saw rising prices in Europe, Chile, and South Africa due to supply constraints.
  • Alternative Sourcing: Higher prices spurred interest in sourcing alternatives, with some buyers exploring less conventional options.
  • Opportunities in Reds: Lower prices on red wines created attractive opportunities for buyers with a clear retail strategy or niche market.

Innovation and Adaptation in the Wine Industry

The year also highlighted the industry’s growing emphasis on innovation, both in the supply chain and on retail shelves. Trends included:

  • Just-in-Time Buying: Buyers increasingly adopted strategies to minimize inventory and financial risk.
  • Product Diversification: Low/no-alcohol wines, flavored wines, and wine cocktails gained traction, reflecting changing consumer tastes.

France

  • Optimal Buying Opportunity: Full range of 2024 French wines and good-quality 2023 inventory available.
  • Competitive Pricing: 2024 vintage prices are in line with or slightly softer than 12 months ago, and 2023 wines are discounted by EUR0.10+/litre.
  • Versatile Offerings: Includes vintage and non-vintage wines, lower-alcohol and organic options, and premium wines for bulk or bottled markets.
  • Demand Trends: 2024 rosé leads demand, with Chardonnay and Pinot Noir dominating white and red wine interest respectively.
  • Negotiable Pricing: Potential flexibility in pricing offers opportunities for buyers.
  • Incremental Buying Campaign: New buying efforts have started, favoring rosé, Chardonnay, and Pinot Noir.

Spain

  • Market Pause: Spanish bulk wine and sulfated must markets are currently paused due to elevated pricing.
  • Cautious Buying: Buyers are covering only partial needs or holding off entirely.
  • Negotiable Pricing: Some suppliers may offer discounts based on volumes and loading terms.
  • Slow Loading: Wines already secured are loading slowly, reflecting reduced retailer urgency.
  • Competitive Pressures: Retail wine sales in key markets are challenging, and upcoming Southern Hemisphere harvests will add to existing inventories in Europe.
  • Price Outlook: Spanish bulk wine pricing may soften in the spring if market inactivity persists.

Italy

  • Tight Supply: Italian bulk wines, particularly generic whites and sparkling bases, are in limited supply due to two consecutive short crops.
  • Price Increases: Prices on various wines have risen since harvest, in some cases by up to 20%.
  • Buyer Hesitation: Higher prices have made buyers cautious, potentially risking the loss of required volumes.
  • Prosecco & Pinot DOC Strength: Prosecco DOC and Pinot DOC bottlings are expected to remain strong performers through 2025.
  • US Demand Impact: Anticipation of US import tariffs may drive increased demand for Italian wines in early 2025.

California

  • California's bulk wine inventory remains large, with slow demand and softening prices.
  • Pricing is nearing 'California'-appellation levels except for select premium wines.
  • Suppliers are exploring European tenders and other export opportunities.
  • Available options include:
    • High-quality wines suitable for mid-tier programs.
    • Standard bulk wines, such as White Zinfandel.
    • Very competitively-priced generic wines.
    • Low/no-alcohol wine options.
  • One-year and multi-year contracts are available for buyers.

Argentina

  • Argentina's January 2025 stock levels are comparable to January 2024.
  • Export pricing has become more competitive for:
    • Generic white wines.
    • White grape juice concentrate (GJC) in demand from Europe.
  • Malbec prices are 20% softer across all quality tiers.
  • Attractive opportunities exist for bulk wine buyers.
  • Prices could soften further if the 2025 growing season remains favorable.
  • A potential peso devaluation may allow additional export price reductions.

Chile

  • Chile's bulk wine inventory in 2025 is more balanced compared to the previous year.
  • 2024 whites and entry-level reds are in shorter supply.
  • 2024 reds remain available, with a significant percentage being high-end wines priced at a premium.
  • Bulk wine pricing has increased compared to 12 months ago but remains globally competitive.
  • Pre-harvest contracting for 2025 Sauvignon Blanc and Chardonnay has been brisk; early reservations are advised.
  • Vineyards are in good health with adequate water reserves.
  • Vineyard removals in 2023/2024 have reduced crop potential.

South Africa

  • Limited Supply: South Africa’s supplies of generic wines and varietal whites are extremely limited after three consecutive shorter crops.
  • Low Carryover: Total wine carryover as of 31st December is projected to be significantly below traditional levels.
  • Efficient Loading: Contracted wines have been efficiently loaded, with little re-released onto the bulk market.
  • Promising 2025 Crop: A better-sized 2025 crop appears likely as the growing season progresses smoothly.
  • Export Opportunities: Suppliers are exploring new export avenues but remain cautious about committing to volumes and pricing until the harvest outlook is clearer.
  • Stable Pricing: Rand pricing on varietal wines remained stable and competitive throughout 2024, with this trend expected to continue in 2025.
  • Alignment for Growth: Wine quality, pricing, and export ambitions are aligned, pending successful delivery of the 2025 crop.

Australia & New Zealand

  • Australia's 2024 White Wines: Limited supply with high demand entering 2025.
  • Red Wine Availability: Reduced 2024 red-grape harvest followed by strong exports to China; reds remain readily available.
  • 2025 Crop Expectations: A lighter-than-average crop is anticipated, with Chardonnay particularly affected by September frosts, increasing grape pricing for the varietal.
  • Currency Impact: The Australian dollar is forecast to weaken below USD0.60 in 2025, potentially benefiting exports.
  • New Zealand Sauvignon Blanc: Prices for 2023/2024 Marlborough and New Zealand GI Sauvignon Blanc have softened as suppliers clear inventory ahead of a potentially above-average 2025 vintage.
  • Strong Market Sales: Continued solid sales to the US, UK, and Australia.
  • NZ-EU FTA Impact: The NZ-EU Free Trade Agreement, effective since May 2024, is expected to boost sales to Europe in 2025.

The economic backdrop of 2024 reflects the aftermath of the inflationary surge of 2022 and interest rate hikes of 2023, culminating in what is now called the “Vibecession” — a disconnect between positive economic signals and consumer sentiment. This ongoing cost-of-living crisis has reshaped consumer behavior, with wine facing growing competition from alternative beverages due to its higher cost per alcohol unit. As a result, global wine consumption continues to decline, a trend accelerated by waning demand in mature markets and reduced growth in China.

The impact is particularly evident in wine production, with significant vineyard removals in key wine-growing regions like Chile, France, and California. Although the bulk market began to stabilize in 2024, higher prices and tight supplies of white wines have prompted interest in alternative sourcing, while new trends like low/no-alcohol wines are gaining traction. The industry holds hope that 2025 will mark a turning point in restoring balance to supply and demand.

Source: Ciatti

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