A year of flat or declining wine sales owing to consumer pessimism draws to a close with bulk markets exhibiting the same slowness they have done throughout the previous eleven months. Transactions are, on most wines in most markets, incremental and price-sensitive, Italy – having experienced a crop size well short of the average, especially in central and southern regions – being the main exception. 

The leading causes of consumer belt-tightening on discretionary items like wine – grocery price inflation and elevated interest rates – have been trending downward this year but are widely expected to continue making themselves felt in 2024, accentuated by high household debt and banks retreating from business loans and credit card financing. Consumers are keeping a watchful eye on spending, as evidenced by news from the UK that the use of cash – yes, good old-fashioned bank notes and coins – in transactions rose in 2023 for the first time in ten years. 

Retail price rises on wine, just like on any other product, get noticed, and retailers know it – their argument for taking less wine than before, or pushing back against suppliers seeking to protect margin. Such pushback ultimately falls upon the grower, operating in a high-cost environment while facing lower grape prices and/or less demand. It goes without saying that, unlike low offer prices, less demand cannot be offset by increased output. The only recourse is greater efficiencies, many of which can be unpleasant, such as removing uncontracted vineyards, seeking a loan to invest in new technology, rationalising headcounts. And if none of those options work, exiting viticulture altogether might seem an attractive option in comparison. Vineyard hectarage in the major wine-producing countries likely retreated in 2023 and will likely do so again in 2024. 

Lower grape pricing should help soften 2024 vintage bulk wine pricing in general, barring significant weather events, opening up some highly attractive price-quality opportunities with which to fulfil new brands and products that might better engage new consumers and younger demographics. We are already seeing such opportunities open up on the 2023 vintage, with quality products like Marlborough Sauvignon Blanc and Coastal Californian wines lower in price versus a year ago. With the levelling price effect of less demand, and the return to pre-pandemic freight costs on many routes, 2024 could prove to be the best year for some time in which to get proactive and creative with bulk wine sourcing. 

The Ciatti team can draw on its many decades of experience to help buyers harness these opportunities, while assisting suppliers in finding good homes for their grapes and wines: don’t hesitate to get in touch. In the meantime, read on for our final market updates of 2023 and may your Holiday’s, and 2024, be filled with good things.

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