The global bulk wine market is experiencing another period of subdued activity, which is typical during the Northern Hemisphere's summer holiday season. This traditional lull has been amplified, with only isolated pockets of buying activity breaking the overall quiet.
The pessimism seen last year regarding the long-term decline in wine consumption across major producing countries continues into 2024, although some factors are offering a glimmer of optimism.
Notably, shorter wine crops and the re-entry of China as a buyer in Australia have made the market seem somewhat livelier, and some exporters are seeing improved performance this year.
France
- It's an opportune time to source wines from southern France, with prices softening as the new vintage approaches and the quality of remaining 2023 and nonvintage wines being high.
- Entry-level reds are priced competitively with Spain’s offerings and are cheaper for northern European buyers when considering transport costs.
- There are rare opportunities to acquire bottled red and white Burgundy wines for the premium/fine wine market.
- France’s 2024 crop is expected to be average-sized or slightly below, with southern French bulk pricing likely to start higher in the new buying campaign than it will at the end of the current one.
Spain
- Spain's vineyards have experienced intense heat recently, but sufficient irrigation after a wet winter means an average-sized crop is still expected.
- The buying campaign for Spain’s 2024 bulk wines will begin quickly, but buyers should secure only part of their needs initially, as prices may soften after early demand subsides.
- Carryover stock is limited, possibly the shortest in many years, and mostly consists of competitively priced generic reds.
Italy
- The market is focused on the impact of intense heat and drought on Italy's 2024 harvest, particularly in central and southern regions, with Sicily's crop potentially down by 30-40%.
- Pricing for the 2024 vintage remains uncertain until the crop outlook in Italy and Spain becomes clearer in the coming weeks.
- 2024 Pinot Grigio IGT pricing is expected to be higher than in 2023.
- Prosecco bottlings are strong, and recent demand has been led by Prosecco, Pinot Grigio, and some red wines for top-up volumes.
California
- Bulk wine pricing in California has been softening due to significant inventory, leading to an increase in buying activity over the past three months, though still below historical levels.
- California offers attractively-priced opportunities for both cachet Coastal bulk wines suited for mid-tier export programs and Central Valley wines for standard bulk programs.
- Potential for one-year and multiyear deals exists, with low- and no-alcohol options also available.
- July's hot weather may inhibit berry sizing, and early-season varieties in the Central Valley have been picking lighter, but it's too early to predict the overall crop size.
Argentina
- Argentina has good stock levels of most wines, including all qualities of Malbec.
- International demand for Argentine wines is steady, with Malbec leading the way.
- Export pricing is stable, though a potential softening by the end of the year is possible, depending on the Argentinian peso's relationship with the dollar.
- Zonda winds have brought early spring-like warmth and dryness to Mendoza, potentially advancing the growing cycle and increasing the risk of frost damage.
Chile
- Supplies of Chile’s Dry White and 2024 varietal whites are running low; buyers should act quickly to secure their needs.
- Red wines are more available but still in relatively limited supply.
- Domestic demand in Chile has been steady, driven by concerns about frost risk and potential price increases for the 2025 vintage.
- Despite the Chilean peso's weakening since mid-July, export prices are rising due to dwindling supplies and uncertainties about spring vineyard conditions.
- Buyers should anticipate shipping delays caused by recent ocean surges and reduced container capacity at Chilean ports.
South Africa
- South Africa's 2024 Chardonnays and Sauvignon Blancs are becoming limited, but more availability may emerge as suppliers assess their stock.
- Red varietals are still in good supply.
- Rand export pricing remains stable, with domestic demand steady and elevated, particularly in the generic wine market.
- Successive short crops and weaker demand in key export markets have led to a continued decline in export shipment levels.
- A cold and wet July has replenished water reserves and increased cool hours during vineyard dormancy, which could benefit the upcoming growing season.
- A shortage of containers at Cape Town port, due to the peak fruit export period and stormy weather, means an extra 1-2 weeks should be anticipated for shipping.
Australia & New Zealand
- The removal of China's punitive import tariffs on Australian wines in March led to an increase in wine exports to China, helping to offset declines in exports to other global markets, which fell by 5% in volume to the lowest level since 2003-2004.
- Total bulk wine export volumes from Australia were down 2%.
- Australia's cold and dry winter has heightened concerns about frost risks in the spring.
- A government-operated water buy-back scheme in the Murray-Darling Basin might offer an exit strategy for growers wishing to leave the industry.
- New Zealand's 2024 crop is significantly smaller, down 21% compared to the large 2023 harvest, with Marlborough’s crop and total Sauvignon Blanc production also down by 21%.
The global bulk wine market in 2024 is marked by both challenges and opportunities. While significant inventory and regional uncertainties create a complex landscape, there are valuable buying opportunities in key regions like California, France, and Argentina.
Despite concerns over weather impacts, fluctuating prices, and shifting consumer demands, savvy buyers can capitalize on attractive deals, especially in the white wine segment. As market conditions evolve, staying informed and strategic will be crucial for navigating this dynamic environment.
Source: Ciatti