2024-09-25
The Spanish wine sector is navigating through turbulent times as the latest report from the Observatorio Español del Mercado del Vino (OeMv) outlines a decline in both the value and volume of wine exports during the 2023/24 campaign. The report indicates a challenging environment for Spanish winemakers, with notable decreases in several key metrics, despite some encouraging signs in certain categories.
Between July 2023 and July 2024, Spain's wine exports fell by 1.1% in value, down to €2.94 billion, and by 2.6% in volume, totaling 2.02 billion liters. These figures reflect a loss of €32 million and 54.7 million liters compared to the previous campaign. The overall downward trend highlights the pressures facing Spanish wine producers, particularly in the highly competitive global market, where supply chain disruptions, inflation, and shifting consumer preferences are playing a significant role.
The decline was more pronounced in certain segments, especially for vinos envasados (bottled wines), which traditionally form the backbone of Spain's export market. Exports of these wines dropped by 2.5% in value and by a more significant 7% in volume. This resulted in 66.1 million fewer liters exported, which translated into a revenue loss of €62.2 million.
The Spanish wine sector has traditionally leaned heavily on bottled wine for export value. However, the 2023/24 campaign saw notable weaknesses in this category. Bottled wine exports, including popular styles like tintos (reds), blancos (whites), and rosados (rosés), faced a particularly tough market. While volume suffered, the average price per liter for bottled wine increased by 4.9%, reaching €2.75 per liter, suggesting that producers have been able to command slightly higher prices, though not enough to offset the volume losses.
In contrast, vinos a granel (bulk wines), which often hold less value per liter but command larger volumes, performed better. Bulk wine exports rose by 5.9% in value and 1% in volume, with a total of 1.15 billion liters exported. This modest growth helped temper the broader downturn, and the average price of bulk wine increased by 4.8%, reaching €0.47 per liter. While bulk wine contributed to stabilizing the sector, its performance was not strong enough to reverse the overall decline.
The Spanish sparkling wine market showed a combination of stability and volatility, with overall value increasing by a marginal 0.4%, reaching €508.7 million. However, volume decreased by 5.8%, with 163.6 million liters exported during the campaign. The average price of sparkling wine grew by 6.6%, reaching €3.11 per liter, an encouraging sign of the category's resilience.
Within the sparkling wine category, Cava, Spain's flagship sparkling wine, encountered a more challenging landscape. Exports of Cava dropped by 1.5% in value and 10.1% in volume, with significant losses seen across major markets. Despite these setbacks, Cava's average price per liter rose by 9.5%, indicating that while fewer bottles are being sold, producers are successfully leveraging premiumization to drive higher per-unit revenues.
The U.S. remains the largest market for Spanish sparkling wines, with exports totaling €76.7 million, up 2% from the previous year. Germany, a crucial volume importer, saw a sharp drop of 9.6% in value, although it remains the largest buyer of Spanish sparkling wines in terms of volume.
Wines with Denominations of Origin (DOP) continue to represent a significant portion of Spain's export profile, yet this category saw some of the largest declines in the 2023/24 campaign. Exports of DOP wines fell by 4.4% in value, amounting to €1.23 billion, and by 8.8% in volume, equating to 245.9 million liters. This segment, representing some of the highest-quality wines, saw a sharp drop in exports, particularly to established markets such as the U.S. and the UK. However, the average price of DOP wines rose by 5%, reaching nearly €5 per liter, underlining the continued demand for quality over quantity in premium segments.
Similarly, wines with Protected Geographical Indication (IGP) also faced declines, with value dropping by 3.3% and volume by 4.2%. These wines, typically positioned between everyday table wines and DOP-level wines, suffered from both volume and value erosion during the campaign.
On a more positive note, varietal wines—those labeled by grape variety rather than region—experienced a notable rise in value, growing by 7.4%, indicating that consumers are increasingly attracted to these specific grape-driven wines.
One area of growth came from Bag-in-Box wines (packaging that ranges between 2 to 10 liters), which saw a 2.5% increase in value and a slight 0.4% rise in volume. Bag-in-Box wines are typically associated with lower-cost bulk offerings but have grown in popularity for their convenience and environmentally-friendly packaging. Germany, Sweden, and Japan remained key markets for this category, with Japan showing a significant 23% increase in value.
While the Spanish wine sector faced a difficult year, there are several nuanced takeaways. The rise in average prices across most categories indicates that, despite the decline in volume, there is potential for Spanish producers to position themselves in premium segments. This trend toward higher price points is critical for offsetting volume losses, especially as global consumers show a growing interest in quality and sustainability.
The report from the OeMv suggests that while external challenges persist, such as economic uncertainty and changing market dynamics, the resilience of Spanish wine lies in its ability to adapt. Producers must continue to innovate, particularly in higher-value segments like DOP wines and Cava, while exploring growth opportunities in underdeveloped markets like Mexico and the Dominican Republic, which posted strong export gains.
The 2023/24 campaign reflects a complex landscape for Spanish wine exports, with declines in key categories but also some areas of growth that could offer a path forward. Strategic adjustments, coupled with a focus on premiumization, will be critical for the Spanish wine sector as it seeks to recover and strengthen its position in the global market.
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