Tensions are running high in French wine circles. January 2024 saw widespread public protests, with winegrowers in several regions voicing their frustrations by blocking roads, dumping manure and lighting fires in front of Town Halls and other strategic locations (see here).
Discontent has been brewing for some time. In October 2023, facing financial difficulties, producers in the south of France hijacked trucks bringing Spanish wine into France, destroyed bottles of cava. They also attacked wine merchant premises and called for strike action (see here).
Bordeaux vignerons are similarly challenged. Annual overproduction has been estimated at 300,000 hl (40m bottles) and a 2023 survey conducted by Gironde’s Chamber of Agriculture shows that a third of the region’s winemakers are facing financial difficulty.
A deal was reached with the French government to help Bordeaux growers pull up roughly 10% of their vines, or 9,500 ha from a total of 108,000 ha. The Bordeaux funding package totals €57 million, with €38 million provided by the government and the remainder to be financed by the Conseil Interprofessionnel du Vin de Bordeaux (CIVB), the Bordeaux wine growers trade body.
Consumption declines in key EU markets
In June 2023 the European Union announced predictions for significant decline in wine consumption in key EU markets (a 15% drop year-on-year was estimated for France) while production in the EU bloc - the world's largest winemaking area - continues to grow (+4%), resulting in oversupply and falling prices.
Consequently, the EU has pledged €160m to pull up vineyards in France, and the state has pledged to allocate €200 million to turn excess wine into industrial alcohol, aiming to stop prices tumbling.
The total volume of wine to be distilled has been estimated at 2.5 to 3 million hectolitres by Jérôme Despey, secretary general of the FNSEA, a French umbrella organisation that represents local and regional agricultural unions at a national level.
This breaks down as roughly 1.5 million hectolitres for the Languedoc region, 700,000 hectolitres for Bordeaux, and the remainder divided mainly between the Rhône Valley and the southeast.
Wine consumption had declined significantly in key EU markets — France alone saw a 15% drop year-on-year — while production in the EU had grown by 4%, resulting in oversupply and falling prices.
Causes of the crisis
Wine consumption in France has been slowly but steadily declining for many years, but the latest crisis is more marked, and is caused by a number of factors.
France is now the world's largest wine producer, according to OIV figures released in 2023, with an estimated production figure of 45.8m hl, or 3% above its last five-year average. This was despite some regions recording negative variations compared to 2022; Bordeaux and the South West were hit by downy mildew, and Languedoc-Roussillon suffered heatwaves and drought, for example.
A combination of high inflation rates and reduced spending power, post-pandemic lifestyle changes, global unrest and a lack of consumer confidence has led to a decrease in demand for wine. The resulting surplus has caused prices to fall, putting growers in a precarious economic position and sparking angry protests.
Consumption continues to decline
After the US, France is the world's second biggest consumer of wine. According to FranceAgrimer/OIV figures, wine consumption in France reached 25.3 million hectolitres in 2022, an increase of 1.5% on 2021, or around 47 litres per capita per year.
However, wine's decline continues, reflecting the influence of health trends, economic conditions and changing consumer preferences.
An IFOP survey published in December 2023 showed that more than 50% of French adults planned to drastically reduce their alcohol intake for the first month of the year.
In 2022, a FranceAgrimer survey showed that only 11% of respondents identified as regular wine consumers. This represents a drop of five points compared to the previous study of 2015, and continues the downward trend observed since 1980 when half the country's population drank wine on a regular basis.
Drinking frequency varies mainly depending on age. Regular drinkers tend to be older (18% are in the 50+ age group), but the greatest disparity is seen among those who never drink wine at all: 27% in the 50+ group, 38% in the 35-49 years age group, and almost 50% in the under-35s.
The CNIV issued a statement in response to the latest data: “The figures show a deeply entrenched trend for reduced wine consumption and this has been going on for decades: with a 70% drop in consumption between 1960 and 2020, the French have never consumed so little wine.”
Supermarket sales slowing
Data from FranceAgriMer shows that the French buy most of the wine they drink at home in supermarkets, representing around 90% of all wine purchases. Only white wine sales increased in volume and value compared to 2021.
Nielsen research panels paint a similar bleak picture, with supermarket sales of still wine down by 5.3% year-on-year in 2022. Declining sales affected wine regions across the board: Alsace (-3%), Loire Valley (-5%), South West (-6%), Rhône Valley (-7%), Bordeaux (-9%), Languedoc-Roussillon (-9%), Beaujolais (-11%) and Burgundy (-21%); only Provence (+3% by volume) and Corsica (+5%) bucked the trend.
Wine and e-commerce
Back in 2012, only 12% of shoppers bought wine online in France, but e-commerce use rose in the following years, reaching 46% in 2021. The pandemic had a marked effect on wine e-tailing in France; almost 50% of French consumers reported purchasing wine online in 2021, spurred by long lockdowns.
By 2023 this figure had fallen to 38%. Julien Laithier, co-founder of French wine tech company Winespace, observes: “Although online shopping has become more spontaneous for French people since the pandemic, many consumers still seem to be reverting to their pre-pandemic shopping habits.”
“E-tailers have a number of innovation levers at their disposal, such as data/IA, user experience, automated content generation, advice algorithms and/or personalised product push tools,” he said. “Bricks and mortar retailers are equipping themselves with innovative tools to attract or win back consumers – things like 'connected' shelves, virtual reality headsets to immerse consumers in the world of wine, connected labels, and new generation advice kiosks.”
Kick-starting French wine
The French wine industry employs around 500,000 people. Its shrinking wine market has been partly shored up by the government and EU measures, but will this be enough? Speaking in summer 2023, Agriculture Minister Marc Fesneau warned that the industry needed to “look to the future, think about consumer changes and adapt.”
“This is a social phenomenon. Today, 6% of households account for 45% of wine volumes. We've seen a 70% decline in consumption over the last 60 years, a drop of 34% over the last 20 years, and projections made by the CNIV and Vin & Société predict a further 10% drop in consumption over the next seven years,” said Samuel Montgermont, president of Vin & Société.
A strategic plan was presented in December 2023 to the France AgriMer wine council by Vin & Société and the CNIV. It is based around four pillars and includes innovation in viticulture and winemaking, adapting production to climate change and demand, understanding consumer expectations, and finding new consumers by focusing on export markets.
The CNIV has already developed a Wines of France umbrella brand to be used to support sales efforts in export markets. The logo is in the shape of a hexagon, with a beating heart positioned on a raised wine bottle, and a strapline in English - one country, a world of tastes – speaks to its global ambitions.
Figures cited by CNIV president Bernard Farges as part of the strategic plan's vineyard restructuring proposals include an estimated excess of 100,000 hectares of vines, and an incentive payment of 2000-2500 €/hectare for pulling up vines.
Presenting the strategic plan, he mentioned the idea of relaxing France's Loi Evin, the legislation passed in 1991 which comprehensively regulates alcohol marketing and largely bans alcohol advertising. The plan is being developed and will be presented to politicians visiting the Salon de l'Agriculture in Paris in late February.
Red falls, rosé rises
Data from FranceAgrimer shows that red wine consumption in France has halved in 30 years. Between 1994 and 2020, French red wine sales plummeted from around a billion bottles to less than 500 million.
However, red's loss is rosé's gain. From 1988 to around 2000, sales of pink and white wines in France rose from roughly 100m bottles to 200m. While white sales plateaued for the next 20 years, those of rosé almost doubled.
The success of this style is confirmed by Jacques Gravegeal, president of IGP Pays d'Oc. The region is France's largest rosé producer, making an annual average of almost two million hectolitres, and accounting for 28% of French rosé in 2021.
Growth of the No/Low category
A YouGov survey indicates that seven out of 10 French consumers drink no-alcohol beverages, and that for 38% of these respondents, this is regular behaviour; a third of 18-24 year-olds stated that they did not like the taste of alcohol.
Speaking on the eve of Wine Paris, show organiser Vinexposium's CEO Rodolphe Lameyse pinpoints the No/Low alcohol category as a key trend.
He said there had been an increase in the number of No/Low exhibitors signing up for Wine Paris 2024, with non-alcoholic wines up by 50%.
“There is also growth in low alcohol/hard seltzers, non-alcoholic RTDs (Ready To Drink) and non-alcoholic spirits,” he said, adding that France is one of the top four markets in terms of demand for non-alcoholic wine; the other major markets include Germany, Finland and the Netherlands.
While Millennials and Gen Z play a leading role in the growth of No/Low in France, Lameyse indicates that the trend is now also spreading to Michelin-starred restaurants.
Gen Z and behavioural trends
The SoWine/Dynata 2023 survey showed that beer had overtaken wine as French consumers' alcoholic drink of choice. White wine found favour with 93% of respondents, with rosé in second place (88%) and red wine trailing (83%).
"We're seeing a change in patterns, particularly among the Gen Z age group. There are fewer meals eaten in restaurants or at home, more going out to bars and aperitif-time drinking, and a rise in fast food and snacking. Consumers no longer eat three meals a day, and when they do eat, they don't necessarily sit down at a table,” says SoWine co-founder Marie Mascré.
She adds that younger French people prefer other types of alcohol to wine, opting for products like beer, spirits and sparkling alcoholic beverages that are better suited to their lifestyle.
According to survey findings, Gen Z drinkers now consume more white and rosé wine than red. Over the period 2011-2023, red wine as a first choice fell by 20 points, while white wine's popularity rose by the same number.
Mascré feels that their wine consumption habits are a good indicator of nascent trends which are likely to accelerate as this age group enters the market. Among these trends she cites an end to the supremacy of food and wine pairings and red wine, and a tendency to drink less but better.
In Bordeaux, a 2022 survey found that 1,372 winegrowers over 35,000 hectares of vines were in financial difficulty. Over 900 growers, representing 25,000 hectares, wanted to continue their activity by diversifying and reducing their vineyard area; 333 winegrowers on 6,400 hectares want to quit viticulture completely, 66% of them to retire (source: Chambre d'Agriculture de la Gironde).
Champagne is faring well, according to the Champagne wine marketing board (CIVC). The region shipped 299 million bottles of wine worth 6.3 billion euros in 2023, returning to levels similar to pre-Covid times. Export sales accounted for 57% (172 million bottles) of its production, compared to 45% in 2013. Domestic sales represented 43% (127 million bottles). Both markets saw an 8.2% decline in volume, but the CIVC said French spending had been hit hard by inflation.
According to BIVB president Laurent Delauney, “Burgundy is not currently suffering from the drop in wine consumption, its producers have not had to make applications to pull up vines, and stock levels are not excessive. Burgundy's wine exports have increased over the last 10 years, only slowed down by a loss in crop - particularly the 2021 vintage, which will have a significant impact on 2022 sales.”
The majority of Rhône Valley wines' production is sold in France (64% in 2022). An estimated annual figure of 100,000 - 300,000 hl is not finding outlets, resulting in a growing oversupply and the threat of crisis distillation, as in other red wine-lead regions like Bordeaux and Languedoc. A move towards white wine production is underway; it is predicted that by 2030, the area dedicated to white wine vineyards in the Côtes du Rhône will have doubled.
Domestic sales account for three in every four bottles of Loire Valley wine (1.4 million hl), and supermarkets represent half of these transactions. Although this channel has declined in recent years, expansion has been observed in wine shops, restaurants, e-commerce and cellar door sales.
“The Val de Loire has maintained its domestic sales volume despite market contraction, and it is gaining market share: the diversity of our terroirs, grape varieties and colours means we can adapt the profiles of our wines to consumer expectations.” (Sophie Talbot, InterLoire General Manager)
Cheaper Languedoc PDO reds (- €5) are suffering in particular, with domestic sales between 2019 and 2023 falling by 47%. However, a 20% rise for red wines priced over €5 in the same period and a similar pattern for rosé suggests that consumers are drinking less but better. Volume-wise, for 2023 Languedoc PDOs are in line with the market average (-6.0%), and registered a third-best performance among French PDO regions for value.
In Languedoc PDO's top seven export markets, sales fell in value terms by 5%, returning to 2020 levels. Strong growth was seen in secondary markets (Australia, Ireland, Denmark, Japan, South Korea, Vietnam, Hong Kong, Singapore): +42% in one year, for a total of €23.5 million. (Source: CIVL/IRI Panel - P11 2023)