Canada's wine market: quality over quantity

In the world of wine, trends can shift as rapidly as the seasons. The year 2023 brought about such a change in Canada, reflecting a broader pattern across North America. According to the latest analysis by OEMV based on Canadian customs data, Canada experienced a significant downturn in wine imports, marking the lowest volume of imported wine since 2013. This shift is not isolated but part of a wider trend observed across the United States and Mexico, suggesting a post-pandemic recalibration of the wine import market.

The data reveals a 10.3% decrease in volume and an 8.8% decrease in value of wine imports into Canada, totaling 375 million liters and 2.694 billion Canadian dollars (CAD) respectively. Despite the drop, the value of imports in 2023 remains the third highest on record, trailing only behind 2021 and 2022. This suggests that while Canadians may be buying less wine, they are opting for higher-priced bottles, as evidenced by the average price per liter rising to CAD 7.18, the highest recorded to date.

Amidst the overall decline, bag-in-box wines stood out as the sole category to see growth in 2023, with all other categories (sparkling, bottled, and bulk) experiencing decreases. Bottled wine, in particular, suffered the steepest declines in both volume (-14%) and value (-9.3%), yet it maintained its dominance in the market, accounting for 64.6% of the volume and 84% of the total value of wine imports in Canada. Notably, the price of bottled wine has seen a substantial increase since the year 2000, with an average annual growth rate of 5.5%.

Sparkling wine, despite a 10.7% decrease in volume, marked a record price of CAD 14.33 per liter, becoming the second most imported wine in terms of value. Bulk wine, on the other hand, saw a minimal drop in volume (-1.3%) but a significant 7% decrease in price per liter, highlighting the cost-effectiveness of this category.

Looking back over the past two decades, Canadian wine imports have shown remarkable growth in terms of value, with a Compound Annual Growth Rate (CAGR) of 5.1%, compared to a more modest 2% growth in volume. This long-term perspective reveals a Canadian market that increasingly values quality over quantity, a trend that has doubled the average price per liter of imported wine from CAD 3.64 to CAD 7.18 since the turn of the century.

The decline in wine imports in 2023 may hint at a market adjusting to a new normal following the upheaval of the COVID-19 pandemic and the lifting of the so-called "Trump Tariffs" on certain European wines. As consumers become more discerning in their wine choices, the industry may need to adapt to these changing preferences. The rise of bag-in-box wines and the sustained interest in higher-priced bottles suggest a Canadian wine market that is both diverse and dynamic, ready to embrace the next wave of wine trends.

Canada's Top Wine Suppliers in 2023

The landscape of Canada's wine imports in 2023 tells a story of global shifts and emerging trends that resonate beyond the borders of this North American country. With wine sourced from 73 countries around the world, Canada's market is a microcosm of global wine dynamics. Among the top 10 suppliers, all experienced a decline in value, pointing towards a challenging year. However, the volume tells a different story, particularly for Australia, which emerged as a key player.

Australia defied the general trend by increasing its export volume to Canada by an impressive 12.2%, reaching a historic high of 74 million liters and becoming Canada's leading wine supplier for the first time. This surge was primarily fueled by bulk wine, even as bottled exports faltered. Australia's success story in 2023 overtakes Italy, which saw a decline of 11.4% to 73.7 million liters. France and the United States followed, with their own significant drops in volume, positioning them as the third and fourth largest suppliers respectively.

Chile and Spain saw their volumes decrease to 25.7 and 24.6 million liters respectively, with Spain experiencing a particularly steep decline from an already disappointing 2022. South Africa faced the most substantial drop among the top suppliers, reducing its exports to Canada by 38%. This reshuffling of suppliers highlights changing preferences and market dynamics within Canada's wine import scene.

When it comes to the value of imports, France maintained its dominance for the seventh consecutive year, despite a 4% decrease, showcasing the enduring appeal of French wine in Canada. Italy and the United States rounded out the top three, with Spain showing the smallest decline among the top 10, indicating a strong performance relative to others.

Australia, despite its volume growth, experienced a dramatic 25.2% drop in value, attributed to a significant price reduction of 33.4% to CAD 2.19 per liter, emphasizing the competitive pricing of bulk over bottled wine. Notably, France and the United States commanded the highest prices among the top suppliers, underscoring their premium positioning in the market.

Italy and Spain made notable price adjustments, with Italy increasing its average price to CAD 8.26 per liter and Spain achieving a record average price of CAD 6.72 per liter after a significant 16.2% increase. These adjustments reflect strategic moves in positioning their wines within the Canadian market.

The broader landscape saw Canada reducing imports from Chile, Argentina, and South Africa by more than 20% in value, indicating a broader shift in consumer preferences or economic factors affecting trade. New Zealand and Portugal also experienced declines, although Portugal managed to limit its volume loss to a mere 2.6%, the least among the suppliers analyzed.

The changes in Canada's wine import landscape in 2023 reflect a complex interplay of consumer preferences, global market dynamics, and strategic moves by suppliers. Australia's rise to the top, the enduring allure of French wines, and the significant price adjustments by Italy and Spain highlight a market that is continually evolving. As suppliers and countries navigate these shifts, the Canadian wine market remains a vibrant and dynamic arena for global wine trade, poised for the next chapter in its rich history.