Decline in Global Wine Consumption Hits Six-Decade Low Due to Inflationary Pressure
Global Wine Consumption and Production Decline in 2024
Global wine consumption and production have experienced a significant drop in 2024, marking the third consecutive decline since 1961. According to the International Organisation of Vine and Wine (OIV), global wine consumption decreased by 3.3% to 214 million hectolitres (hl), with a 4.8% drop in production to 225.8 million hl.
The decline is primarily due to a combination of factors, including an aging consumer base, economic challenges, increased competition from other drinks, health-consciousness, changes in drinking culture, and production cost increases.
Aging Consumer Base and Economic Pressures
In major markets like the UK and France, about 50% of wine drinkers are aged 55 or older, with younger generations drinking less wine. This demographic shift results in fewer new wine consumers replacing older ones. Economic pressures and cost-of-living crisis have also impacted the wine industry, with rising production costs and inflation limiting discretionary spending on wine, especially cheaper and entry-level options.
Competition from Other Beverages
Younger consumers are increasingly choosing alternatives such as craft beer, spirits, seltzers, and ready-to-drink (RTD) cocktails, which compete directly with wine. For example, in Germany, RTDs are favored more by Gen Z than still wine, which has seen continuous declines.
Health Consciousness and Changes in Drinking Culture
There is increased awareness about health and alcohol's risks, along with neo-prohibitionist messaging in some regions, which discourage casual or midweek drinking occasions. Furthermore, the global volume declines reflect a shift towards quality over quantity, with consumers opting to spend more on premium and special bottles.
Climate Change and Production Volatility
Climate change is a significant factor contributing to the increased volatility in wine production and the unpredictable weather events affecting both hemispheres. John Barker, the director general of OIV, attributed the decline in global wine production primarily to extreme environmental conditions from heat, drought, and unpredictable weather events across major wine-producing regions.
Regional Highlights
France was the single biggest contributor to the decline in global wine production in 2024, with wine production falling 24% to 36.1 million hl. Italy, however, increased wine production in 2024 and overtook France as the world's largest wine producer, with an output of 44.1 million hl, a 15% increase from the previous year. Italy, Spain, and Portugal had stable or slightly increased wine consumption in 2024.
China consumed less wine in 2024, slipping to 10th place among wine-drinking nations. After a trend of falling variability in wine production from the 1920s to the late 2000s, volatility has again been on the increase for the past 15 to 20 years, according to analysis by the OIV.
Two consecutive years of lower production are expected to bring 'a degree of equilibrium' to the global wine market, according to Barker. After this period of decline, it remains to be seen how the wine industry will adapt and recover.
- In the wake of the global wine industry's decline, a niche opportunity presents itself for those interested in climate-change-resilient wine investment, as EPAs (Environmental, Social, and Governance) principles in personal-finance and sustainable production practices gain prominence.
- As health consciousness becomes more prevalent, exploring various facets of the food-and-drink industry, such as the science behind creating low-alcohol or organic champagne products, can cater to the evolving lifestyles of discerning customers seeking safer alternatives.
- A younger demographic increasingly gravitates towards novel experiences, and finance management for rare, limited-edition bottles of wine or unique food-and-drink pairings could offer an exciting avenue for combining personal-finance and budgeting strategies.
- In the realms of environmental-science and wine production, discovering new grape varieties resilient to extreme climate-change conditions may help safeguard wine's future, while promoting biodiversity as a crucial component of a sustainable lifestyle.
- Looking forward, the wine industry's adaptation and recovery could be influenced by the rise of flexible pricing strategies, where producers fine-tune their production volumes based on climate predictions, focusing on quality and adaptability in a challenging global market.
