The global wine industry is currently experiencing a phase of decline, with production at 3300 million unit cases in 2004. A shift is occurring in terms of the main wine-producing regions, with Western Europe production in decline compared to significant growth in New World countries that include Chile, Australia and the United States.
One of the most promising new wine exporting regions is Central and Eastern Europe (CEE), referring to the 13 countries which joined the EU in 2004, 2007, 2013, as well as the EU candidate countries from the Balkans. With a history of viticulture and ideal geographic conditions, CEE is primed to have a resounding impact on the global wine industry. There are certain economic and political factors that hinder the efforts of producers to expand to new markets; primarily a lack of awareness of CEE wines abroad.
On the other hand, rising consumption rates in a number of geographic regions have led to the emergence of new markets for the producers. The most striking example is Asia. Countries such as China have seen an exponential increase in the number of wine consumers, with both Old and New World producers competing for market dominance. Japan, although a relatively new market, has seen a growth in demand since 2010. Consumption has increased by 12% from 2011 to 2012, placing it 15th worldwide.
Top 10 wine producers by country
From the table above, countries like Spain, United States, Chile, China, South Africa and Germany have witnessed an increase in production since 2010. Chile has seen the largest increase rate since 2010. On the other hand, Italy, France Australia and Argentina are the top countries suffering from reduced production. Argentina had suffered the largest a reduction of 43.3%. This was due to lower quality wines having lost export sales and were losing competitiveness as a result of high inflation which resulted in high production costs, exchange rate issues, and an array of trade restrictive measures taken by the government. These measures had adversely affected the importation of inputs needed for production.
Top 10 wine exporters
9 countries in top 10 producers are also the largest wine exporters except China. In addition, among the 10 wine export countries, France had suffered a reduction in the export quantity.
GLOBAL CONSUMPTION - IWSR DATA
In 2014, China, USA and France have been the largest consumer of wines.
World Spirits Market Overview
Here are the statistics for leading spirits companies worldwide in 2013/2014, based on sales (in million U.S. dollars)
The diagram above shows top 14 leading spirits companies worldwide in 2013/2014. Diageo and Pernod Ricard contributed almost to 61% of the world total spirits market.
GLOBAL CONSUMPTION - IWSR DATA
China, India and Russia have the largest consumption of spirits.
But when we look at consumption per head, South Korea, Russia and Northern Emirates are the top 3 leaders. It seems like china’s large consumption is mainly due to its huge population base.
Area under Vine: Continuing to decline
Global area of wines has continued its steady decline, driven by vine pull in the old world (at 2.5% pa) and minimal new plantings in the new world. China, Chile, USA are the countries consistently expanding their vineyard footprint with an average growth rate of 3% over the past 3 years. New Zealand has the largest increase rate of more than 20%.
Old and New World
Total old world production in 2012 is estimated to be 1.5bn cases, down 9.5% from 2011 with a sharp fall in particular from France (-18%). New world production remains flat at 760m cases, with increases in production from South Africa, the US and Chile more than offset by a 24% decline in Argentina. These trends, along with the rise of Chinese wine production, are driving production share declines in the old world, despite signs of maturity in new world markets.
The top 10 producers have seen production decline since 2004
Total production amongst the top 10 producers fell 6% in 2012, with larger declines from the major regions of France, Spain and Italy, as well as Argentina. China is one of few regions that has seen production increases over the past decade. Despite the decline, France, Italy and Spain continue to dominate global production.
Consumption: Making a recovery, led by France, the US and China
Global wine consumption has continued to recover with France, the US and China driving incremental growth while other old world regions continue to show declines. The important markets for growth, the US and China have more than offset declines in old world markets over the past 10 years.
The Export Market is growing strongly
The global wine trade has grown dramatically in the past 30 years and now represents 40% of total production and is worth over US$30bn. At US$10bn, French wine exports represent one third of total export value, which is largely a function of the higher prices its wines command. The US$15-$20/case price point is where many countries compete for the large EU demand pool. Pricing overall on export markets has been a growth story for the past 15 years, with 2011 rebounding strongly from 2010 lows.