The global wine trade experienced a decline in volume and value in 2023 due to reduced real incomes, post-pandemic overstocking, and shifting consumer preferences. Still red wines were more affected than sparkling wines, white wines and wines in bag-in-box formats, with notable declines in bottled still wine imports across major markets.
The critical question for the wine sector is whether these declines are due to temporary factors, structural changes, or a combination of both.
Premium wines still enjoy demand among traditional aficionados, but there is a clear shift in consumer preferences towards more refreshing products, including white wines, sparkling wines, and low-alcohol wines. To address these challenges, the wine industry must innovate and adapt its regulatory framework to support consumer-oriented innovation and diversified portfolios. The global wine industry is at a pivotal transition point, requiring a strategic response to evolving consumer preferences to maintain its market position.
"Understanding how traditional premium wines and new wine-based beverages can coexist under one regulatory framework is essential for the wine industry’s future. The upcoming ProWein Business survey in early November will explore this topic. We invite you to share your insights and help shape the future of wine."
Last year at a glance
In 2023, world wine exports dropped by 6.5% in volume. In value terms, total revenues fell by €1.8 billion to €36 billion. Given the significant international inflation rate of 6.8%, the decline in real value terms was even more pronounced.
This decline in volume follows more than 13 years of relative stability. The unexpected decrease in trade value in 2023 disrupted a long-term premiumisation trend that had only been interrupted during the economic crises of 2009 and 2020.
To gain a deeper understanding of the overall decline, an analysis of the evolution of various wine categories is essential.
Sparkling wines on top
Sparkling wine has been the dominant category in the global wine trade in recent years, a trend that persisted in 2023. Following the robust post-COVID recovery in 2021 and 2022, revenues from sparkling wine grew by 0.8% in 2023, reaching €8.9 billion, while volume declined by -4.0%, particularly in the second half of the year.
Export performance varied by origin:
- Italian sparkling wine exports increased in value by 3.3%
- French exports decreased by 1.1%; Champagne accounts for 91% of French export value but only 58% of the volume.
- Spanish exports decreased by 0.9%
Italy leads in sparkling wine exports by volume, while France, despite exporting less, commands higher prices. Therefore, while sparkling wine is the top category in the global wine trade, Italy is the primary volume driver of this segment.
Other categories not so sparkling
Still wines, fortifieds and semi-sparkling wines experienced a significant decline in 2023. Following a robust post-COVID recovery, the trade saw a decrease of 5.3% in value (€1.4 billion) and 7.6% in volume.
The average value rose by 2.6% to a record €4.69 per litre, 12 cents above 2022 and €2 higher than 2009, mainly driven by rising production costs. However, the substantial volume decline led to an overall drop in trade value in 2023.
The significant decline in global exports in 2023 was primarily due to reduced imports across most markets. Among the top 23 import destinations, only Sweden, Singapore, Macao, and Ireland showed growth. In 19 of these markets, imports of non-sparkling bottled wines fell, with the largest declines seen in South Korea, China, Australia, India, and Canada.
Bag-in-Box wine
Wines in bag-in-box (BiB) represent a small but growing segment of the global wine trade, accounting for 2% of the total trade value and 3.8% of the total volume. In 2023, BiB wine exports reached 3.7m hectolitres, valued at €707m. Despite a volume decrease of 2.4%, BiB export value grew by 0.9% due to a 3.5% increase in average prices, reaching €1.89/l.
Due to the decline in wine sales overall, the BiB’s share increased in 2023.
BiB exports are highly concentrated, with three-quarters handled by six major exporters: France, Italy, Spain, Germany, Portugal, Denmark, and the USA.
Similarly, 56% of BiB imports are concentrated in six key markets: Sweden, Norway, Germany, the United Kingdom, the Netherlands, Belgium, and Canada.
Once seen as a niche for Nordic markets, BiB is expanding to other regions less focused on traditional wine consumption.
Bulk wine
World trade of bulk wine represents roughly one-third of total wine trade by volume but only 6.6% by value, given its low average price of €0.73/l at the end of 2023.
The drivers for bulk wine trade differ from those for regular consumption. A significant portion of bulk wine trade occurs among producers to balance yearly crop variations or to replace domestic consumption in low-price segments. Countries like Italy, France, and Germany import large quantities of cheap bulk wine, especially when local production is low. These imports help supply popular domestic segments with lower-cost wine, allowing more expensive domestic production to be sold in more profitable markets abroad. The high imports of Spanish bulk wine during the low harvest in Italy or the high imports of Spanish bulk wine by French distributors are key examples of this type. This intra-producer trade, typically at low prices, depends on wine availability and crop levels, but could shift if lower-cost producers start shipping directly to final markets instead of through foreign distributors.
Conversely, there is a distinct segment of bulk wine trade characterised by different actors, higher prices, and different motivations. The reduction of transport costs over long distances and the reduction of carbon dioxide emissions are key factors here.
Long-term development of import markets
The USA remains the most crucial import market for both sparkling and non-sparkling wines, driven by a significant increase in domestic consumption by value. However, the sharp recovery post-COVID was abruptly halted in mid-2023 with a marked reduction in imports. This shift in US wine consumption could be attributed at least partially to overstocking by importers due to supply chain disruptions in 2021 and 2022). The three-tier system in the US, where importers, wholesalers, and retailers maintain separate stocks, likely exacerbated this effect.
Additionally, younger US consumers are more responsive to health warnings about alcohol in the post-pandemic era and show a preference for other alcoholic beverages. By the final quarter of 2023, the value of US wine imports had fallen below the long-term trend, with new 2024 data needed to determine if this decline is temporary or indicative of a structural shift.
- The UK, the second-largest import market, experienced a more moderate recovery post-COVID and a less severe decline in 2023.
- Germany, however, has shown a steady downward trend since 2021, largely due to economic challenges from the Russian-Ukrainian conflict.
- Canada, Japan, Belgium, China, and Russia saw significant reductions in 2023, while the Netherlands, Sweden, and France remained more stable; the Netherlands' stability can be attributed to its strategic role as a distribution hub for Europe.
- China's wine imports continued their decline throughout 2023. Since peaking in 2017 (2.5 billion euros and 7.5 million hectolitres), Chinese wine imports have decreased in both value and volume, hitting a new low of €1.4 billion— a loss of two-thirds in value and 56% in volume. Despite this, average prices increased to more than €4 per litre last year. The decline is likely due to a combination of slower economic growth, the pandemic's impact, regulations on gifts to public officials, and waning interest in Western habits. A reversal of this trend appears unlikely.
Major falls in exports
All top 11 wine-producing countries, except Germany, saw reductions in exports in 2023:
- Chile (-23% in value)
- USA (-20%)
- Argentina (-20.6%),
- Australia (-13%)
- France (-1.8%)
- Spain (-2.6%)
- New Zealand (-5%)
- Portugal (-1.2%)
- Italy remained almost unchanged (-0.5%)
What the wine trade should do next
In summary, the global wine trade in 2023 reflects trends consistent with previous years, such as stable or gradually declining export volumes, rising average nominal prices, and better performance of sparkling wines compared to non-sparkling wines. The growth in the relative volume share of bag-in-box wines also continues. EU export data indicates white wines outperformed reds and rosés. However, 2023 also saw a decline in both export volume and value, with the increase in average prices losing momentum and even sparkling wines stabilising.
Overall, the outlook for the coming year is more negative, with most markets showing declines, some more severe than others.
In addition to reducing vineyards, companies may need to adapt their portfolios to better align with new consumer preference. Wine must become more accessible and attractive to consumers by closely following demand trends and identifying those elements such as freshness and sweetness, that appeal to new consumers, .
"Wine consumers have evolved alongside global population shifts. While wealthier individuals continue to seek prestigious wines, a growing population outside the Western Northern Hemisphere is also enjoying improved living standards. The wine industry faces the challenge of retaining traditional Western consumers while attracting new ones worldwide, which may require innovative products and flexible regulations."
Simultaneously, there is potential for premium and exclusive marketing strategies targeting wealthy aficionados who enjoy famous traditional wines. The industry recognizes the need to better reach young consumers, who are more likely to be influenced by other alcoholic beverages.
Based on the current analysis of the wine sector, three key strategies can be pursued. The advantage is that these strategies are complementary and can be implemented together, depending on the grower, company, region, or country involved. These strategies are:
Fostering traditional consumption of more traditional wines.
Enhancing and promoting new types of wines and their communication to appeal to new consumers.
Reinventing the wine product to attract consumers who are further removed from traditional wines.
Efforts in all three areas can help reverse declining consumption and attract new consumers. The crucial point is to acknowledge the increasing diversity of consumers in the wine industry and to understand and engage with these consumers better for long-term survival.
