Global Wine Industry Faces Uncertainty as Harvests Shrink and Consumer Demand Stalls

Harvest season is underway across the Northern Hemisphere, but the global wine industry is facing a period of uncertainty. According to the latest Ciatti Global Market Report, only one of the major wine-producing regions—California, France, Spain, and Italy—is expected to reach its five-year average for crop size this year. The other regions are reporting smaller harvests, caused by a mix of adverse weather conditions and decisions to remove or mothball vineyards.

Despite these reduced yields, the bulk wine market has not seen significant movement. Inventories remain high, and both North American and European retail sales of wine continue to struggle. The report notes that even with less wine being produced, there is little urgency among buyers or sellers in the bulk market.

Industry experts point to several reasons for this stagnation. Inflation and higher living costs are again becoming central topics in industry discussions. While the sharpest price increases from the pandemic era have eased, grocery and energy costs are still much higher than they were three to five years ago. As a result, consumers are cutting back on discretionary spending, including wine.

Annual inflation rates are rising again in the United States, United Kingdom, and Eurozone. Political and economic uncertainty is also affecting many of the world’s largest wine-consuming and producing countries. Consumer confidence remains low. In the Eurozone, it has not been positive since June 2021. In the UK, market research firm GFK last recorded positive consumer confidence in March 2016.

The International Organisation of Vine & Wine’s recent report highlights another challenge: China is no longer driving global wine consumption growth as it did in previous years. This means that declining consumption in mature markets is no longer being offset by rapid growth elsewhere.

In Europe, bulk wine businesses are approaching the 2025 vintage campaign with caution. Even though harvests are smaller than usual, there is little optimism that this will boost prices or demand in the short term.

Some retailers are trying new strategies to address the current imbalance between supply and demand. A UK-based online wine retailer recently launched a “Crisis Deal” on wines from a specific region, framing it as an effort to help producers facing unprecedented challenges. The retailer is offering these wines at unusually low prices to attract consumers who might otherwise cut back on their purchases.

This approach reflects a broader trend in the market: both bulk and bottled wines now offer strong value for money as producers try to entice more consumers into the category. The Ciatti report suggests that there may be opportunities for buyers willing to take advantage of current pricing.

As harvests continue through September and into October, industry participants will be watching closely for any signs of change in consumer behavior or market dynamics. For now, however, long inventories and cautious spending continue to define the global wine market.