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The Evolving Global Wine Market

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Abstract

Fifty years ago, a few countries in Western Europe accounted for virtually all world exports of wine and most of its production and consumption. This has changed dramatically: now every continent has major producing and/or consuming countries. Much of this change has been driven by technology and science, resulting in increasing quality, bringing new countries into the ranks of global winemakers, and increasing the productivity of traditional countries. Much of it has also been driven by economics, in particular the rising income and changing tastes of consumers throughout the world, and by public policy that has created surpluses in Europe. This paper shows the magnitudes of the shifts in consumption and production and discusses the economic and social factors that drive them.

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Notes

  1. Table 2 data applies to all types of grapes, fresh grapes, wine grapes, juice grapes, and raisins, reflecting the data available from many countries. Although only about 2 percent of the grapes produced in most countries of the European Union are fresh grapes, about 10–15 percent of Greece’s grape production is fresh. Wine grapes represent about 90 percent of U.S. grape production. Most of Iran’s grape production is assumed to be fresh, as is much of Turkey’s.

  2. Source: Foreign Agricultural Service of the U.S. Department of Agriculture (FAS).

  3. France AgriMer defines a “regular wine consumer” as one who consumes wine daily or almost daily, with an occasional wine consumer drinking wine “only” once or twice a week. A “nonconsumer” may consume wine on “special occasions.” Responses indicated that 30 percent of such consumers do consume wine. To put these standards in context, the United States defines a regular wine consumer as one who consumes wine once a week or even just three to four times a month.

  4. For example, one commentator complained that “It is … the progressive loss of the identity, sacred and imaginary representations of wine (nation, region, lesser importance of the transmission of the culture of wine by the father within the family, etc.) over three generations that explains France’s global consumption attitudes, and especially the steep decline in the volumes of wine consumed” [AlphaGalileo 2011].

  5. Forty percent of the vineyards in France’s Languedoc-Roussillon region have benefited from the EU vineyard restructuring program.

  6. Source: Stonebridge Research Group, multiple research studies including a recent profile of American adults who consume wine at least once per week.

  7. The standard wine case is twelve 750 milliliter bottles, for a total of 9 liters of wine.

  8. Despite much attention, only about 3 percent of all wines in the United States are sold “direct to consumer.” The vast majority of such sales are through winery tasting rooms and wine clubs. Such sales are most important to small producers of more expensive wines, given the high shipping charges for wine. Imported wines, in general, cannot be sold direct to consumers, although some arrangements have been made to approximate that service for selected products.

  9. Assuming RMB 6.14=U.S.$1.

  10. The various Chinese taxes and duties on wine imports total 48.5 percent. Only Chile and New Zealand have free trade agreements in wine. Hong Kong quite famously eliminated all duties and taxes on imported wines several years ago. Consequently, about 40 percent of imports sold in Hong Kong go to Mainland customers.

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Authors
  1. Barbara Insel
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Additional information

The material in this paper provided the basis for a presentation at the NABE Annual Meeting, September 9, 2013.

*Barbara Insel is President and Chief Executive Officer of Stonebridge Research Group LLC, a strategic advisory firm providing consumer, industry and economic research and export market development services to the wine industry, emphasizing market and consumer studies for trade associations, governments, producers, and other private entities. It also conducts litigation research.

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Insel, B. The Evolving Global Wine Market. Bus Econ 49, 46–58 (2014). https://doi.org/10.1057/be.2014.3

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