Innovation Rather Than Destruction: A Better Path Forward for the Global Wine Industry

Ben Bentzin, Associate Professor of Instruction at the University of Texas, responds to Robert Joseph's suggestion that 15% of the world's vineyards may need to be uprooted. What are your thoughts?

Reading time: 2m 30s

Photo: AI generated, DALL-E
Photo: AI generated, DALL-E

In his May 14 opinion piece, "Devil's Advocate: The Need to Uproot 15% of the World's Vineyards," Robert Joseph argues that the global wine industry is overproducing and should reduce its production by 15% to maintain profitability. He compares the wine industry to a hypothetical furniture company, Universal Furniture Co. (UNIF), which produces 11% more tables and chairs than it can sell each year and calls for some entity such as the Organization for Vine and Wine (OIV) to preside over a coordinated destruction of 15% of the world’s vineyards in order to keep the industry profitable and sustainable.

Joseph's assertions about declining wine consumption are consistent with OIV data that reported global wine consumption hit its lowest point since 1996 in 2023, with an estimated 221m hectoliters consumed. This represents a 2.6% decrease from 2022 and a 7.5% decrease from 2018. Additionally, global wine production dropped by 10% compared to 2022, marking the lowest output since 1961.

Wine consumption trends vary by region and price point. In the U.S., until the past two years, wine sales have steadily grown since the 1990s. There is good reason to believe American wine producers are likely facing a short-term demand decline due to excess orders by distributors and "pantry loading" in homes during the pandemic than a permanent decline in demand. While budget wines under $12 have struggled the most among American consumers, according to Silicon Valley Bank's 2023 report, a new study by the Wine Market Council shows that Millennials (ages 28-43) are not only drinking more wine but are also opting for pricier bottles for special occasions, with an average spend of $65.80 per bottle compared to Baby Boomers' $36.67. The US luxury wine category remains a bright spot in the wine industry.

Robert Joseph's comparison of the wine industry to a hypothetical Universal Furniture Co. is not a useful analogy. UNIF is portrayed as a single company, whereas the global wine industry comprises tens of thousands of individual wineries, with nearly 12,000 in North America alone. There is no coordinating entity for wine production to control which vineyards are destroyed and where. And, of course, a crucial difference between furniture and wine is consumers never buy furniture and store it for future use.

Price is a signal that coordinates supply more effectively than any entity or government intervention possibly could.

Fortunately, we have an efficient mechanism for balancing production with demand called price. When there is an oversupply of wine, prices drop, signaling to producers to reduce their output. Conversely, when demand outpaces supply, prices rise, encouraging producers to increase production. The price of wine varies dynamically by region, varietal, producer, and distributor. Price is a signal that coordinates supply more effectively than any entity or government intervention possibly could.

Moreover, current overproduction is not necessarily irrational. It is likely that current overproduction means that growers believe demand for wine will strengthen in the future. Creating a productive vineyard requires substantial capital investment and about five years of development. If growers rip out vines now and demand subsequently strengthens, there could possibly be market shortages and certainly missed opportunities for those who destroyed their vines. To protect their capital investments, growers may be better served by covering their marginal costs of production and holding on until the market improves.

While the global wine industry has confronted a series of challenges in recent years, it is essential to consider regional variations, price points, and the unique nature of the industry when analyzing its future. Rather than attempting some centrally planned reduction in production which is doomed to fail, a better role for wine industry entities like OIV would be to explore and advocate for innovations in improving quality, distribution, and branding. These strategies would be more effective and within the capabilities of the entities involved. Overproduction may be a rational response to anticipated future demand, and the industry has a built-in mechanism—price—to help balance supply and demand over time.


Robert Joseph sees parallels between the wine industry and a huge, dysfunctional furniture manufacturer.

Reading time: 4m



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