Changing tastes and a hotter climate have made the future of global vineyards uncertain and unpredictable, according to a new report.
With global wine consumption down 12 per cent from its 2007 peak and erratic weather making many sites untenable, few vineyards remain unscathed, according to Knight Frank’s annual wealth report.
In France, “only about five per cent of vineyards are doing okay. Thousands of hectares are being uprooted,” Nicolas Parmentier, head of vineyard transactions at Janssens Knight Frank said.
Producers in Chile’s Colchagua Valley have also been hit hard. “Over the past few years, grape prices have been horrific,” Matt Ridgway at Chile Investments said.
Global wine production fell by 9.6 per cent in 2023 year on year, according to the International Organisation of Vine and Wine (OIV).
But producers still have excess stock: wine consumption has also fallen and is expected to fall further, with two thirds of Gen Z actively moderating their alcohol intake.
In 2023, Nielsen data showed 45 per cent of Gen Z over 21 said they had never drunk alcohol.
The effect on wine prices has been significant: New Zealand’s Marlborough region saw vineyard values correct by as much as 33 per cent in 2024, the report found.
The thriving UK wine market
There is a surprising upside to the UK to the struggling wine market: wine producers in Essex and Kent are thriving.
The number of UK vineyards has boomed, exceeding 1,000 for the first time in 2023, according to the Food Standards Agency. The number of bottles produced shot up to 22m bottles in 2023, from 13m in 2018.
The number of bottles produced by Kent now totals the combined production of stalwarts Burgundy and Bordeaux in France, despite being a tenth of the price.
“[The UK’s] four major varieties – Chardonnay, Pinot Noir, Meunier, and Bacchus – can produce good yields, even in testing years,” WineGB’s Harvest Yield Survey author Stephen Skelton MW said.
There is also high demand for UK wine, with demand significantly outpacing global wine trends. Sales of English and Welsh wines rose by 10 per cent from 2022 to 2023, reaching 8.8 million bottles, according to WineGB.
Sparkling wine has become a particularly defining product, with sales up 187 per cent in the last seven years.
In its latest earnings report, CEO of UK producer Chapel Down, Andrew Carter, said there was “continued strong consumer demand” from UK customers.