Turbulent Times for German Wine Producers

German consumers are still drinking plenty of wine — but their preferences are changing. Felix Bodmann looks at the trends.

Reading time: 6m 15s

(Photo generated by OpenAI's DALL-E, based on a description provided by Anja Zimmer)
(Photo generated by OpenAI's DALL-E, based on a description provided by Anja Zimmer)

The indicators are clear — 2023 was an annus horribilis for the German wine industry. While the full figures for the calendar year are not yet available, the German Wine Institute (DWI) has published a detailed analysis of the German wine year, which ends on 31 July.

It looks as if the era of stable wine consumption in Germany is coming to an end.

The main finding is the decline in wine consumption by around one bottle per capita. What at first glance looks like a mild downturn turns out to be disastrous on closer inspection. Firstly the figure relates to the population as a whole. When it comes to people of legal drinking age (85%) who buy wine at least occasionally — this accounts for one in three households according to Nielsen — this means a drop of almost four bottles of wine per wine drinker per year.

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While Germany was one of the few countries in Europe to resist the trend of declining consumption, the fall in 2023 was twice that of the decline over the previous decade.


 Volumes of wine sold in supermarkets and other major food retailers are falling.

When the figures for total consumption are combined with those for supermarkets, the split between German and foreign wines remains roughly constant at 43% to 57% — but German wines seems to be retaining that position through sales at wineries and independent retailers, as the volumes of wine sold in supermarkets and other major food retailers are falling. The decline could be as high as 10%.


 The days of ‘less but better’ are over.

A first look at the spread between volume and value gave cause for hope, as it seemed for a time as if falling sales went hand in hand with a willingness to buy better and more expensive wine. Unfortunately, the days of ‘less but better’ are over.

The ultra-premium section appears to be driving up the average price per litre for some regions — but the supermarket buyer is trading down.

“We are seeing a lot of movement on the shelves at the moment,” says Alexandra Wrann, editor-in-chief of WEINWIRTSCHAFT, Germany’s major wine trade magazine. “Red wine is being reduced, white is being expanded. Sparkling wines are becoming increasingly popular, especially Cremant.”

The main victims are premium wines, or those that sell above 8 to 10€. “They hardly sell without the customer being advised by an expert, for which there are no resources available in the supermarket.” She adds that due to increasing logistics costs, online retailers are increasingly focusing on super-premium wines. So the only place left for the premium segment are the bricks-and-mortar specialist retailers, who represent less than 10% of the market.


 People stay with their favourite brands.

Rotkäppchen-Mumm is not only Germany’s largest producer of sparkling wine but also a major importer of still wines across all price categories via its subsidiaries in the Eggers&Franke Group. While declining to offer an official statement — the company was on the eve of its annual financial press conference — a spokesperson indicated the company is sensing consumers reining in their spending. The company also referred to the results of its latest in-house ‘indulgence trend’ study; 52% of the consumers surveyed said that enjoyment and premium products belonged together. The calculation at Rotkäppchen-Mumm is therefore: In tough times, people comfort themselves with their favourite brands. At the same time, consumer behaviour is changing. Wine producers now need to engage in brand management to ensure that their wines remain among the favourite brands in these new consumption scenarios.


The complex distribution scene

A huge challenge for many foreign producers is understanding how distribution works, and thereby finding the right partners. “There are importers who only sell to wholesalers and those who prefer to serve the on-trade,” says Wrann. “Some serve all resellers and some have subsidiaries that also do B2C business. Some have a sales force, others work with agencies and still others with a network of different local partners.”

But to enter the German market is not easy. Wrann says that the magazine often comes across, “promising products that don't achieve the expected success due to unsuitable distribution structures. But when products with the right story meet the right partners, the success can be tremendous, as the Miraval story shows.” Chateau Miraval, the joint winery of Brad Pitt and the Perrin family, went through the roof in no time in Germany due to the good work of their partner ‘Veritable’.

Miguel Gil Vera, Gil Family Estates
Miguel Gil Vera, Gil Family Estates

Yet Germany is still complicated. “After Covid and, especially, the war [in Ukraine] we feel the inflation has affected not only Germany but also other European markets,” he says, adding that buyers are very cautious, they keep stocks under strict control, and importers will not add new wines to their portfolio without removing an existing wine. The way to navigate this is clear communication. “If you keep a constant communication with your clients, they are open to let you know what they are looking for, and new opportunities arise.”


Within the wine industry, the rapid advancement of technology presents a wealth of thrilling prospects. These will be prominently featured at Meininger's Wine Conference, under the theme: "Wine Goes Tech: From Robots to AI, From Vineyard to Shelf."

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Sustainability by the wayside

Germany has always been a market interested in sustainability, but the topic has become even more important recently. The Fair and Green association, which advises and certifies wineries on sustainability, for example, was founded back in 2013. Since then, 160 wineries have joined. “Our member wineries tend to be larger than average. They cultivate 4% of the German vineyard area. Our foreign members such as José Maria da Fonseca from Portugal, Cantina Kaltern from Italy and Baigorri from Spain are also large producers,” says CEO Dr Keith Ulrich, describing the association's structure. “Our members want transformation. They are not just looking for a sustainability label to sell a few more bottles.”

“The vegan label is often used at lower price points to suggest high quality and environmental compatibility, regardless of which environmental standard the product meets.“

Wines with a vegan label are also booming — the vegan label is often used at lower price points to suggest high quality and environmental compatibility, regardless of which environmental standard the product meets. The lack of clarity around labelling works in their favour.

“There will not be a European sustainability label in the near future,” says Dr Ulrich, adding that many individual initiatives in Europe are still in their start-up phase. “We are already quite advanced as an organisation and with the definition of our certification process. We have thus been able to open up to international members. Therefore, we see ourselves in a good position to play an important role throughout Europe in the transformation of the industry towards greater sustainability.”

While a specific sustainability certificate on the label does not yet offer a decisive advantage at the point of sale in Germany, it is nevertheless relevant for market entry, at least in the premium segment. Renowned wine merchants and importers such as Suff and Viniculture in Berlin or Vinaturel in Starnberg make sustainability a key criterion when compiling their portfolios. Many smaller wine merchants are following their example.

New 0,75 litre returnable bottles

Meanwhile, the organic-only importer Peter Riegel is pushing ahead with something new: wine in returnable 0.75-litre bottles. The 1-litre bottle Riegel and main competitor VivoLoVin are using in a joint system is already doing well. Riegel recently showcased their Pfandtastic wine at the Biofach trade fair in Nuremburg; ‘pfand’ is the German for ‘deposit’, meaning the bottle can be returned for a small refund. The first products include a Primitivo, a Pinot Grigio and a Spanish Tinto, and are bottled in Germany, which means the scheme is accessible for organic producers from areas whose regulations permit bottling outside the region of production.  It took the organic wine industry 30 years to develop this 0.75-litre deposit bottle, which is not surprising, since the German wine industry can sometimes go off track quite easily.

„Economic turbulence in the wine industry has led to a return to almost exclusively discussing prices.”

Alexandra Wrann was expecting the latest development: “It didn't really surprise us in the editorial team at WEINWIRTSCHAFT,” says Wrann, “it is sad to see that economic turbulence in the wine industry has led to a return to almost exclusively discussing prices.” Sustainability, transparency regarding ingredients, the culture of enjoyment — Wrann sees all of these falling by the wayside. “Now of all times, when many big players in the industry are realising that sustainability isn't just an environmental concern, but that economic sustainability should be the focus of their actions, it is important that the industry avoids short-sighted, purely price-driven actions. That would be the opposite of sustainable business practices.“

Hopefully, the economy will recover and the desire for wine will return — before these trends become permanent.


The German Wine Institute reports in its quarterly report a further decline in the number of wine-buying households in Germany.

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