Big Trends Affecting The Wine Industry

3 June 2024 – Barker, director general of the International Organisation of Vine and Wine (OIV), pointed out the direct effect of climate change and extreme weather on wine production.

Extreme climatic conditions and widespread fungal diseases severely impacted many vineyards in both the Southern and Northern Hemisphere in 2023, resulting in global wine production decreasing by 10% from 2022 down to 237 million hectolitres in 2023, making it the lowest output since 1961.

To alleviate the impact of climate change on wine production, Barker said the OIV served as a platform for countries to share information, collaborate, innovate, research and develop new tools and strategies to improve the industry’s climate resilience and buffer it against extreme weather and accompanied changes in pest and disease trends.

“South Africa is already a pioneer and setting a great example to other countries and agricultural industries in terms of sustainable production. The trick is to strengthen the image of wine as a sustainable and ethical product,” he said.

Climate change is also affecting the wine industry through new rules, regulations and standards aimed at reducing the carbon footprint of companies, retailers and countries. These range from carbon and packaging taxes to new rules regarding the use of pesticide and fertilisers.

Barker said ways had to be found to prevent these rules from negatively impacting production and affecting market access, especially of producers who are far from markets.

According to the OIV, global wine consumption in 2023 decreased by 2,6% from already low figures in 2022 to 221 million hectolitres in 2023. Barker said the decrease was driven by inflationary pressures that led to higher wine prices for consumers, who were already dealing with diminished purchasing power.

But other trends are also driving a moderation in drinking patterns. Carter, founder of Drinks Insider, explained that Baby Boomers were now retiring and buying less wine, while Millennials and Generation Z were not drinking enough.

Increased health awareness is another trend. Carter pointed out that the arrival and use of smart watches to track sleeping patters has made people notice that drinking too much wine has a negative impact on sleep quality. Along with this, various influencers have emerged who propagate abstinence of wine for health reasons.

“While many of their claims are unscientific, these influencers are having a huge impact on the market. In one American survey in 2023, roughly 39% of the participants considered drinking in moderation as bad for your health, whereas the number of participants thought it was good for your health declined from about 25% in 2005 to 10% in 2023,” Carter said.

To worsen the situation, the World Health Organization in 2023 proclaimed no level of alcohol consumption to be safe for people’s health. It referred to research by the International Agency for Research on Cancer, decades ago, which identified alcohol as a Group 1 carcinogenic, which puts it on the same level as asbestos, tobacco and radiation.

Carter said that more research was needed to counter this notion, as the impact of wine on people’s health, when consumed moderately, was dependent on various factors, such as age, diet and so forth. Some past research also revealed that drinking wine in moderation actually helped to lengthen people’s lives.

She said this new stance had resulted in a new form of prohibition, which was affecting drinking patterns and well as the labelling of wine.

Despite the moderation trend, a record number of people are now enrolling in wine courses. The Wine And Spirt Education Trust, the global leader in drinks education, for instance, boasted a record number of 695 Level 4 diploma graduates for the academic year 2022/23. There are currently over 13 000 of these graduates around the world.

Many of these graduates have become wine ambassadors, particularly of the wines they were exposed to, in their own countries.

Carter attributed the trend to the rise of digital solutions, which are allowing younger students to follow coursework on their phones, engage in distance learning and do the courses at their own pace.

There has also been a steady increase in the number of 28- to 40-year-olds who collect fine wine as an investment. This is thanks to the arrival of digital solutions and platforms that make these wines more accessible and help to facilitate sales. Source: Farmers Weekly