According to three detailed reports from industry watchdogs, the global demand for wine has grown but the supply is stalling, with wine production falling by 3.2 per cent in 2016. Wine consumption is also expected to increase, however, wine producers are seemingly not keeping up.
Few producers are producing more than last year
The International Organization of Vine and Wine reported that only a handful of wine producing countries posted an increase in production. The US was the winner, with a 10 per cent jump on 2015 production. However, Australia wasn’t too far behind with an increase in production by 9 per cent. Spain also managed to boost the total output by 4 per cent.
Italy remains the world’s largest producer of wine, and for good reason! With 50.9m hL flowing from its wineries in 2016, it pulls ahead of France, which was able to produce 43.5 hL.
Some producers can’t keep up with growing demand
Argentina and Chile saw the biggest drop in production, by 29 and 21 per cent respectively. French production also fell by 7 percent, and South Africa’s by 6 percent.
When it comes to the smaller producing countries, Brazil’s production fell an astounding 55 per cent, and Hungary saw a drop of 38 per cent. The global drop-off was reportedly because of adverse weather conditions experienced last year.
But the demand keeps growing…
The reports also predicted a rise in consumption to 242m hL. This would be the highest level since 2013, but still below the historic highs of 2007/08. During these highs, consumption hit the 250m hL mark.
Italy’s ISMEA had a few ideas of it’s own
The agricultural research and funding institute predicted the growth of consumption to increase by 4.3 per cent over the next four years, with China in the lead as the fastest growing market. China’s consumption of wine is predicted to jump by 21.6 per cent, Russia’s by 6.1 per cent, and the US by 5.7 per cent.
The Rabobank Quarterly Report puts the spotlight on Prosecco
According to Rabobank, the US thirst for wine is unquenchable, with imports from the rest of the world increasing by 3 per cent in volume, and 2 per cent in value.
The report also revealed that Italy was still the biggest exporter of wine to the US, but growth was driven by sparkling wine. Imports of this type of wine increased by 20 per cent in volume in the first eight months of 2016 – leading to speculation of Prosecco being the culprit.
Australia was listed as a star performer in the US import market. Despite a fall in export volumes, the value of exports increased by 7.3 per cent.
New Zealand’s export growth was impressive in 2016 as well. The country boosted the volume of exports by 6.9 per cent and the value increased by 5.3 per cent. Currently, The UK is New Zealand’s main market by volume, but the US growth is expected to change that.
What do you think of these reports? Comment and let me know – I’d love to hear your opinion.
Giles Cadman is Chairman of The Cadman Capital Group, a group of cohesive, complementary companies, operating in the international trade, retail, leisure, and investment markets. Learn more about Giles.