French Wine Industry Faces Downturn

In a nation renowned for its deep-rooted wine culture, the recent decline in still wine sales has caused a stir within the French wine industry. Between August 2023 and August 2024, France experienced a notable decrease in both the volume and value of still wine sales, marking a significant shift in consumer behavior. According to data from Circana's distributor panel, the overall volume of still wine sold dropped by 4.3%, with a 1.8% reduction in total sales value. This downturn reflects broader economic and cultural changes, even as inflationary pressures begin to ease.

The decline in sales volume resulted in a total of 8.1 million hectoliters sold, a sharp drop from the 8.467 million hectoliters recorded the previous year. In monetary terms, the industry saw a reduction in revenue to €4.453 billion, down from €4.533 billion. These figures paint a clear picture of a market in retreat, with consumers purchasing less wine despite a more stable economic environment.

The decline has been widespread, affecting both traditional bottle formats and bag-in-box (Bib) options. Bottled wine sales fell by 4.5% in volume, while Bib formats, often favored for their convenience and affordability, saw a 3.7% decrease. This suggests that the decline is not merely a matter of consumers opting for different packaging but reflects an overall reduction in consumption.

When dissecting the decline across wine categories, red wines bore the brunt of the downturn, with a steep 7.2% drop in volume. Rosé wines followed with a 3.4% decline, while white wines remained relatively stable with only a 0.2% decrease. Interestingly, despite the decline in volume, white wines were the only category to see an increase in consumer spending, up by 2.6%. This suggests a shift in consumer preference toward higher-quality or more premium white wines, even as overall consumption falls. In contrast, spending on red and rosé wines fell by 4.4% and 1.4%, respectively, indicating a more pronounced shift away from these categories.

The downturn has not spared any market segment. Wines with Protected Designation of Origin (AOP) experienced a 5.4% decrease in sales volume, while wines with Protected Geographical Indication (IGP) that include a grape variety saw a 4.5% drop. Standard IGP wines declined by 2.1%, and even wines classified simply as "Vins de France" without geographical indication saw a slight 0.3% decrease. These figures underscore a broad-based retreat across different wine classifications, indicating that the decline is not isolated to any one segment of the market.

Borgogne Bucks the Trend

While the overall picture is one of decline, regional differences tell a more nuanced story. Burgundy (Bourgogne) stands out as the only major wine region to record an increase in sales, with a modest 0.8% rise in the number of bottles sold. This increase suggests a continued strong demand for Burgundy wines, likely driven by their global reputation and perceived quality.

In stark contrast, other regions suffered significant losses. The Languedoc-Roussillon region, traditionally a powerhouse of French wine production, saw sales plummet by 8.1%. Beaujolais and Bordeaux followed closely, with declines of 7.9% and 7.1%, respectively. Even well-known regions such as Alsace, Provence, and the Loire Valley were not spared, with reductions ranging from 4% to 6.2%. The Rhone Valley and Corsica also recorded a 3.9% drop in sales. These regional disparities highlight the varying impact of the sales decline, with some regions faring far worse than others.

Implications for the French Wine Industry

The decline in still wine sales in France raises important questions for the future of the industry. While the reasons behind this downturn are multifaceted, including changing consumer preferences, economic factors, and possibly even shifts in cultural habits, the overall trend suggests a need for adaptation within the industry. Producers and distributors may need to rethink their strategies, focusing on innovation, quality, and perhaps new ways to engage with consumers who are increasingly selective in their wine purchases.

Moreover, the success of Burgundy in bucking the trend could offer valuable lessons for other regions. Whether through marketing, maintaining high standards, or capitalizing on the global appeal of their wines, Burgundy's experience might provide a blueprint for other regions to stabilize or even grow their market share in challenging times.

As the French wine industry grapples with these shifts, the decline in still wine sales from 2023 to 2024 serves as a stark reminder of the changing dynamics within this historically significant sector. While some regions and categories have managed to weather the storm better than others, the overall decline underscores the need for a strategic reassessment to ensure the long-term vitality of the French wine market. The coming years will be crucial as the industry adapts to these new realities, striving to maintain its revered position both domestically and globally.