With a new year underway, we at Ciatti wish all of our friends, clients and business associates a very happy and prosperous 12 months ahead. Many thanks for your continued support. 

If 2022 was characterised by rising inflation levels, and 2023 by interest-rate increases to tackle inflation, then 2024 was characterised by the hangover. A word for it was coined: “Vibecession” – a disconnect between the more positive economic indicators emerging through the year and consumer perceptions of the economy. In some cases, earnings increases have lagged 2021-23 inflation, reducing spending power outright. But more pervasive is a sense of a “cost-of-living crisis”: essential living expenses – mortgages, rent, fuel, energy – are noticeably higher than four years ago and constitute a greater share of total spend. As we observed in September, in a discretionary-spending squeeze, “wine’s higher price per alcohol unit versus its ever-proliferating number of rival beverages is a disadvantage”. 

This might help explain International Organisation of Vine & Wine statistics published in April, showing a steep decline in global wine consumption since 2021. This decline is an acceleration of a pre-existing trend from 2018 onwards, when concerted growth in China’s demand for imported wines went into reverse. It now appears likely that Chinese demand growth through the 2010s masked sales stagnation in mature markets, perhaps attributable to changing demographics and consumer behaviour. 

A decline in consumer demand for wine is ultimately felt by winegrape growers, who in 2024 pulled out, mothballed or minimally farmed vineyards in ever greater numbers. Chile may have removed up to 20% of its vineyard area across 2023 and 2024; state-sponsored removals are underway in southern France, where wine industry bodies suggest some 100,000 hectares require uprooting; in California, tens of thousands of acres were likely removed over the past 18 months. Steps to right-size supply into better balance with demand will yield results all the quicker if consumption stabilises in North America and Europe. All hope 2025 will be the year. 

The bulk market in 2024 took on a more ‘normal’ appearance after a protracted lethargy. Two years of lighter crops – mainly weather-related, though lack of vineyard investment will have played a part – caused supply tightness and price rises on whites (generics, varietals, sparkling bases) in Europe, Chile and South Africa. Higher prices on particular wines led to new enquiries into alternative sourcing. Meanwhile, some lower prices – mainly on reds – opened up attractive opportunities for those buyers who could identify a retail market need or niche. Innovation in the supply chain – namely, just-in-time buying to reduce costs and risk – is being mirrored on the retail shelf, with the likes of low/no-alcohol wines, wine cocktails and flavoured wines cropping up more in industry conversation. 

With its interconnected offices across the globe, able to react quickly and provide live industry information, Ciatti is uniquely positioned to help facilitate the justin-time business model becoming the norm. Get in touch for the very latest opportunities and to arrange a meeting at Wine Paris on 10-12th February, where Ciatti brokers will be in attendance. In the meantime, read on for a review of 2024 by country, and some tentative projections of what 2025 might bring

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