Global Demand Grows as Supply Stalls

Expect a bigger push by the industry to expand in areas not suitable for production or communitites and use more common pool resources, millions of pounds of chemicals into the environment and profit for big corporations. We the people are in the “sacrifice zone”.

The world’s thirst for wine continues to grow, even as weather affects production.

By Wine-Searcher staff | Posted Thursday, 13-Apr-2017

There is less wine in the world and more people are going to be drinking it, according to reports released this week by three major agribusiness organizations.

Global wine production fell by 3.2 percent last year, from 276 million hectoliters (7.3 billion gallons) to 267m hL, according to the International Organisation of Vine and Wine’s (OIV’s) most recent report, with just a handful of producing countries posting an increase. The United States was the winner there, with a 10 percent jump on 2015 production. Australia wasn’t far behind with an increase of 9 percent, and Spain managed to boost its total output by 4 percent.

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Italy remains the world’s largest producer of wine, with 50.9m hL flowing from its wineries in 2016, comfortably ahead of France (43.5m hL), Spain (39.3m hL) and the US (23.9m hL)

The big losers were Argentina and Chile, who saw falls in production of 29 and 21 percent, respectively. French production fell 7 percent and South Africa’s by 6 percent. In the minor wine-producing countries, Brazil’s production fell an astonishing 55 percent, while Hungary saw a drop of 38 percent. Much of the global drop-off was down to adverse weather conditions.

The report also predicted a slight rise in consumption for 2016, to 242m hL, which would be the highest level since 2013, but still well below the historic highs of 2007/08, when consumption hit the 250m hL mark.

While the OIV was making its cautious predictions in Paris, Italy’s ISMEA was playing a more jaunty tune at Vinitaly, according to the Italy24 news channel.

The agricultural research and funding institute predicted growth in consumption of 4.3 percent over the next four years, with China once again leading the pack as the fastest-growing market, with consumption predicted to jump 21.6 percent. Russia (6.1 percent) and the US (5.7 percent) are also set to grow, ISMEA general manager Raffaele Borriello told the Vinitaly international trade show in Verona.

Fittingly, given the audience, ISMEA predicted that Italy would be the main beneficiary of this renewed thirst for wine – Borriello said Italy could expect a 10 percent increase in global sales by value through to 2020, heading off France and Chile (6.1 percent growth) and the US (4.3 percent).

Meanwhile, a third report this week showed that the US thirst for wine seems unquenchable, with imports from the rest of the world increased by 3 percent in volume and 2 percent in value.

The Rabobank wine quarterly report revealed that Italy was still the biggest exporter of wine to the US, but growth was being driven by sparkling wines, which increased by 20 percent in volume in the first eight months of 2016, reflecting the world’s current love affair with Prosecco.

The star performers in the US import market also included Australia. Despite a fall in export volumes, export values rose by 7.3 percent, boosted by a sharp rise in the US market.

New Zealand export growth was also impressive, with a volume boost of 6.9 percent and a value lift of 5.3 percent. The UK briefly regained its position as New Zealand’s main market by volume, but US growth is expected to change that, as consumer growth flourishes and currency crosses favor New Zealand producers.