Ciatti Report: Adjustments Required

The Organisation of Vine & Wine’s recently-published ‘State of the World Vine & Wine Sector 2023’ report showed that the gains in global consumption made between the mid-1990s and the consumption peak in 2007 have since completely unwound – despite the global population having risen by 1.5bn in the meantime. 

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It's time for adjustments (Photo: KI generated by DALL-E)
It's time for adjustments (Photo: KI generated by DALL-E)

The industry is having to adjust.  

Underlying causes

The OIV listed potential reasons for the consumption decline – including falling Chinese demand and the recent energy crises and inflationary pressures – but we believe the underlying causes run deeper: the generally reduced level of discretionary spending power consumers have had since the 2007-08 global financial crisis; the often higher cost of wine per serving versus rival beverages; increasingly tough health messaging; and lower interest in drinking alcohol among the ‘Generation Z’ and ‘Millennial’ generations compared to their predecessors. 

Vineyard area declines

The OIV’s graph of the world’s vineyard surface area was not dissimilar to that of wine consumption: area peaked in the early 2000s, before gradually falling over the past 20 years. The decline was within a narrow band, however, and the statistics include table-grape area, so it is harder to draw direct wine-related conclusions. But vine removals are certainly on the wine industry’s agenda now.


Each April, the International Organisation of Vine and Wine (OIV) presents its report on the "Situation in the global wine sector". In 2023, production volumes fell, but so did consumption. And there is still a surplus.

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Vine removals

Removals are happening for a range of reasons. For example, long-term drought conditions in northern Chile have meant some vineyards there have been abandoned; the weak Rand and long-term cost pressures in South Africa have led to older vineyards going unreplaced. However, removals in Chile, California and France, at least, have also been occurring as a consequence of the global wine industry’s structural oversupply, a lack of need for certain wine grapes and/or the inability to sell them at a margin that makes farming viable.

Californian opportunities

A significant bulk wine inventory in California – and ongoing slow demand – is softening pricing there. We see opportunities in Coastal California for international buyers seeking higher-end bulk wines offering a globally unbeatable price-quality ratio. This applies to a range of varietals such as Cabernet and Pinot Noir, including Napa Valley Cabernet. Their prices will typically be above global bulk market levels, but these wines carry a quality/appellation cache that might suit a wide range of mid-market programs worldwide.

Ciatti is committed to helping suppliers find homes for their bulk wine and grapes. This in turn benefits buyers, who know they are getting the full market picture and all the options. Identifying opportunities that provide margin and cashflow – that is where the Ciatti team can bring its decades of experience to bear. Don’t hesitate to get in touch for the very latest wine and grape market intelligence and pricing.

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