The Wine Crisis: Global Production Hits Historically Low Levels

Global wine production could fall to its lowest level in over 60 years in 2024 due to adverse weather conditions in several regions around the world, according to recent reports from the International Organization of Vine and Wine (OIV).

The projections, based on data from 29 countries accounting for 85% of last year’s production, predict that global wine production in 2024 will range between 227 and 235 million hectoliters (mhl), representing the lowest volume since 1961, which was 220 mhl. If these figures are confirmed, it would mean a global decrease of 2% compared to 2023 (237 mhl) and a 13% decline compared to the average of the last decade. "This drop is mainly due to the climate challenges faced by both hemispheres," detailed the OIV, noting that nearly all wine regions have suffered. Italy, with 41 mhl, has reclaimed the top spot as the world's largest producer, displacing France, which experienced the largest year-on-year decline among producing countries (-23%, dropping to 36.9 mhl). Spain remains in third place with 33.6 mhl, showing a slight improvement from 2023. The United States, in fourth place, recorded an average harvest of 23.6 mhl, which is slightly lower than last year. In the southern hemisphere, volumes are expected to be the lowest in 20 years due to poor weather conditions. In Chile, the leading South American producer, production is anticipated to be 15% lower compared to 2023 and 21% below the average of the last five years, a drop attributed to a delayed harvest and droughts in certain wine regions. Brazil is also expected to see a decline, with an estimated production of 2.7 million hectoliters. Conversely, Argentina expects to produce 10.9 mhl in 2024, representing a remarkable recovery of 23% compared to 2023, although it is still 4% below the five-year average. Historically, these regions (about 20% of the global total) used to compensate for declines in the northern hemisphere, explained John Barker, director of the OIV, stating that "volatility has been increasing in recent years." "The consequences of climate change are accumulating. It is essential to be concerned about climate and sustainability if we want a viable future," he added, highlighting that although this year's harvests are lower, they are characterized by their quality. "We are in a challenging time for many in the sector, filled with changes and uncertainties," emphasized the OIV director, whose organization encompasses 51 states, sometimes referred to as the "UN of wine." However, "change is a constant in this industry," Barker reaffirmed while presenting statistics covering 100 years of wine production and trade. The sector "has undergone significant changes in its production methods, market structures, and consumption habits, which have been positive in terms of value and reach," he stressed. However, weather is not the only factor to consider. "Understanding the variations in consumer preferences and the position of wine in society" is another significant challenge, Barker warned. Indeed, during the first half of 2024, global wine consumption declined again due to shifting preferences, with a 3.9% decrease in volume compared to the previous year and a 20.1% drop from the same period in 2019, according to the London-based market analysis firm IWSR.

In the midst of this production crisis, it is vital for the wine sector to seek new strategies to adapt to climate change and the evolution of consumer preferences. Innovation in production and market diversification could be key to navigating these uncertain times. Additionally, it is important for producers to focus on quality as well as quantity in order to maintain competitiveness in a challenging global context.