Global Wine Trade Value Falls €1.758 Billion Despite Record Average Price of €3.66/Liter

The global wine market had a rocky year in 2023. According to customs data from various countries, the world's wine trade saw a significant dip in both volume and value. The volume fell for the second consecutive year, dropping by 6.5% to 9.838 billion liters, marking the first time in a decade that it dipped below the 10 billion liter mark. The total value of wine trade also fell by 4.7% to €35.957 billion. Despite this drop, it's still the third highest value in history, following a record-breaking 2022 which saw €37.715 billion. On a brighter note, the average price of wine continued its upward trend for the third year in a row, reaching an all-time high of €3.66 per liter.

The wine market experienced an exceptional rebound in 2021 and 2022 following a sharp decline in 2020 due to the COVID-19 pandemic. However, 2023 presented numerous challenges that hindered further growth. Global inflation was a significant factor, which had actually helped boost the value in 2022 despite a fall in volume. The rising costs of energy, fuel, and general living expenses, coupled with transportation and supply chain issues, geopolitical tensions, and wars, particularly the ongoing Russia-Ukraine conflict, contributed to this year's downturn.

Historical patterns show that the value of global wine trade tends to fall during times of economic crisis, such as in 2009 during the Great Recession, in 2020 due to the COVID-19 pandemic, and now in 2023. This year saw a loss of 679 million liters and €1.758 billion compared to 2022. Initially, 2023 showed promise with an increase in trade value in the first quarter. However, the subsequent nine months saw consistent declines, particularly in August and September. The volume showed positive growth only in March and October, while the worst months were, again, August and September. The average price had been rising consistently for 27 months until April 2023. However, from mid-2023, prices began to fall, with May, September, October, and November showing lower average prices compared to the same months in 2022, coinciding with a gradual easing of inflation.

Looking at a broader timeframe since 2000, the global wine trade has grown significantly, with the annual compound growth rate (CAGR) in value (+4.3%) outpacing the growth in volume (+2.1%). Over these 23 years, the value rose from €13.756 billion to €35.957 billion, and the volume increased from 6.057 billion liters to 9.838 billion liters. The average price per liter also saw a substantial rise, up by €1.39 from €2.27 to €3.66. This increase is largely due to the stronger performance of higher value-added wines, particularly sparkling wines, and rising average prices across all categories.

In terms of specific markets, the United States saw a significant reduction in wine imports, down by €806 million and 209 million liters in 2023. Despite this, the US remains the largest market by value but fell to third place in volume. Germany reclaimed its position as the top market by volume with 1.362 billion liters, though it remains third in value at €2.670 billion. The UK, second in value with €4.823 billion, saw declines of 3% in value and 5% in volume, dropping to 1.358 billion liters.

Other notable losses came from Canada and China, with Canada seeing a decrease of €321 million and 43 million liters, and China falling by €297 million and 88 million liters. Among the top 13 markets, only the Netherlands managed to increase both its value (+0.8%) and volume (+0.5%) of wine imports. Singapore also showed growth in value.

In summary, 2023 was a challenging year for the global wine trade, marked by significant drops in both volume and value amidst a backdrop of global economic challenges. While the market did experience some bright spots, such as the continued rise in average prices and the resilience of certain markets, the overall trend was downward. As we look ahead, the wine industry will need to navigate these economic headwinds carefully, seeking opportunities to stabilize and eventually return to growth.