The myriad threats facing the wine industry could drive you to drink
The wine industries of the world are facing an existential crisis, one which is so vast and has been building for so long that many producers have simply chosen to ignore it.
The threat to wine is not unique in terms of alcoholic beverages — the other categories are also under pressure. However, with wine, all of the forces have come together in what can truly be described as “a perfect storm”.
For a start, there’s climate change, whose impact — while more visible in the traditional (Old World) regions — is affecting quality, regularity of supply and cost of production. Then there is the increasingly visible pressure of the antialcohol lobby, which doesn’t distinguish between wine (with its lifestyle benefits) and the more destructive hard tack. Finally, there is a huge and perceptible change in the consumer profile, with new entrants drinking less, and imposing expectations that cannot easily be complied with by wine producers.
So far, climate change may in fact have exerted more of a positive than negative effect on Old World areas. Before the 1980s, the risk of poor or even write-off harvests was much higher than today. In the 1960s at least half of the vintages in Bordeaux and Burgundy ranged between disastrous and bleak. By comparison, in the first two decades of this century those regions have seen only one irredeemably bad year.
However, it is becoming increasingly obvious that the much warmer conditions in the key European appellations have yielded more alcoholic, less nuanced wines. Any further increase in temperatures may well make it impossible to produce the kind of fine wines on which the reputations of the high-end cellars depend.
Big wines are also not good news at a time when governments everywhere are clamping down on alcohol. In the 1970s and 1980s top Bordeaux reds went to bottle at about 12% ABV. Today those same wines are closer to — and sometimes even more than — 15%. A 25% increase in the amount of alcohol in a glass of wine is not a great negotiating position when the messaging should be about “less is better”.
The pressures that have been building against the alcoholic beverages industry date back to the 1960s. Then the annual per capita consumption of wine in France and Italy comfortably exceeded 100l/person.
Nowadays, in those same countries, the figures have dropped to between 30l and 40l a year.
About 50% of French people under 40 don’t drink wine. Gen Z consumers buy mainly when they are out and about. It’s probable that, like their other northern hemisphere contemporaries, this reduction in consumption is linked to perceptions that other (nonalcoholic) beverages are more nutritious.
The farmers who supplied those markets have become something of a threatened species. Between 1995 and 2015 the number of growers in the Bordeaux region alone dropped from 14,000 to just more than 7,000. In SA, in the past three decades, we have seen a similar decline in grower numbers — together with a loss of about 20% of our vineyard area.
The problems confronting producers everywhere may have played a part in the decline of Cape wine exports in 2023. Figures just released paint a pretty grim picture — especially given the prospects for 2024. Total volumes were down 17%, with bulk volumes dropping fractionally more than packaged goods. Had bottled wine sales increased at the expense of bulk, there might have been a silver lining to these storm clouds. However, the two have pretty much been in lockstep: only rand weakness has given the Wines of SA export organisation an opportunity to put a positive spin to these stats.
Even more ominously for SA, it looks as if the trade standoff between Australia and China is moving towards resolution.
In 2019 Australian wine exports to China totalled $866m; in 2022 this had dropped to $5.79m. When that deal is renewed — which seems inevitable — the bottom end of the Cape wine industry may well face catastrophe.