Habits are changing and people drink less, but better. Winemakers produce less but it’s seemingly still too much. And why does any of this have to do with kombucha, flying doctors, hail storms and trams in South Australia? Read on.
Last year, the world population drank 214 million hectolitres of wine. It’s hard to imagine what that number represents: it equals 28.5 billion bottles with almost 1000 being emptied every second. You would have to stand on Paris’ Pont Alexandre III for some twelve hours to see that much liquid rushing down the River Seine – even with the Place de la Concorde and the Eiffel Tower as backdrop, it might get a bit boring.
However, this is still the lowest global wine consumption level since 1961. After a sharp increase beginning in the 1980s, the figure has been on a downwards trend since 2016. For a number of unfortunate, concurrent reasons.
Less wine – but why ?
Most people are worried about the economy in one way or another; the cost of living is rising but wages aren’t. Under constrained budgets, wine becomes a dispensable item.
Geopolitics are another factor. Ongoing conflicts – most obviously in Ukraine and the Middle East – have disrupted supply chains, created instability and sped up inflation in already volatile markets.
The many tariffs promised or implemented by the second Trump administration have only added to an already complex mix.
Meanwhile, Gen Z is drinking less alcohol in all forms, and if they do, not necessarily the oaked cab that their Gen X parents consider the ultimate wisdom; instead they’re seeking low- and no-alcohol wines. They also pick from a large choice of RTDs, Kombucha, teas and ever growing options of mixed drinks.
But lowering consumption is not limited to youngsters: consumers of all ages are cutting down on their alcohol intake, often cheered on by aggressive anti-alcohol lobbies influencing lawmakers. The Australian Cancer Council plastered a message that alcohol causes cancer, across the sides of trams, illustrated with red wine glasses.
Slump in worldwide consumption
These concurrent factors help to explain why consumption has gone down in 15 of the 20 leading wine-drinking countries last year. According to John Barker, Director of the International Vine and Wine Organisation, they are ‘saturated’. Not least the USA – the world’s biggest wine market that slurps up 16% of the world production for some of the highest prices – where consumption has slowed down.
Some smaller markets seem to be taking a roller coaster ride. Seen as a shooting star in the last decade, Brasil has had a slump of 10% in consumption in 2024. Argentina used to be world champion of per capita consumption with 80% of the demand met by domestic wines. Consumption has halved since 2014. Stocks have been dangerously accumulating and a glut of grapes in the 2025 harvest delivered an oversupply of several harvests.
Winemakers around the world have 1.2 billion litres of wine in stock (about 30 minutes on the Seine), putting severe downward pressure on prices. The small 2024 harvest helped slightly. But not enough.
On the other hand, “wine has never been so widely consumed worldwide,” Barker insists. It is now “consumed in 195 countries”, some with a large population and “strong overall consumption […] still offer significant growth potential.”
Southeast Asia (excluding China), is one the few regions forecast to see some growth. High hopes are pinned on India. Consumption in Vietnam or Malaysia is growing but starts from a very low baseline.
Rising production costs
Across production lines the cost of making wine has consistently increased in recent years, both to environmental and socioeconomic factors: more irrigation needed, higher costs of labour, steeping prices for energy, machinery and, crucially, glass bottles, of which Ukraine used to be a main supplier.
This has added pressure to an industry already very much at the mercy of nature’s whims.
Spring frosts kill buds; hail can destroy complete crops in seconds; severe heat and drought put vines under extreme stress, reducing yields or simply making it impossible to mature with balance. France lost 22% of the harvest in 2024. Spain’s Priorat saw yields drop up to 50% in recent harvests.
Many winemakers found it increasingly difficult to make a living under current conditions “and simply left their grapes unpicked”, said Barker. Even Torres, sustainability trailblazers – having committed 11% of annual profits to the mitigation and adaptation to climate change – and one of the world’s most admired wine brands, has announced they might be abandoning the 1000-hectare famous Priorat-soils in their home Catalonia in 20 or 30 years. “Because traditional winemaking here may not be viable”, laments 83-year-old patriarch Miguel Torres.
Vineyards under threat
For four consecutive years, the global vineyard area has shrunk to 7.1 million hectares in 2024 – 9% less than 2002’s 7.8%.
The outlook is not promising. According to a study conducted by research agency IWSR, yields will keep decreasing for years. The value will slightly rise, but most on the account of premium wines. In other words: solvent premium drinkers will play a more important role and support higher-shelf producers while winemakers at the other end of the spectrum won’t get enough to make a livelihood.
In Australia, for example, where wine is the most popular tipple, growers of premium wine get four times more for their grapes than producers of cheap grapes.
Even winemakers in historic Rutherglen are uprooting vines. Experts estimate Australia – fifth-largest wine producing country with an industry worth € 25 billion – needs to cut its vineyard area by 30% under the economic conditions.
On the other side of the globe, Bordeaux has been struggling with over production for years. Some local stakeholders think the classical wine style as well as their marketing are lagging behind local trends and marketing dynamics. Winemakers in the entire southwest and the Rhône valley are also affected. Last year, 5418 growers applied to clear 27,461ha of vines, accepting a government compensation of €4000 per hectare – €110 million from the tax payers pocket.
It’s estimated that 100,000ha of the Grande Nation’s 789,000ha under vine might need to be cleared to balance supply and demand.
Meanwhile, 1300 growes completely gave up farming, sending the property prices plummeting when putting their land on the market. Côtes de Bordeaux-soil lost 60% in value. Even top appellations like the Médoc and Pauillac fell -17% resp. -7%, which still leaves the sellers with € 2.5 million/ha.
Current challenges also lead to serious mental health struggles. In Australia, France, Germany and other wine-producing countries doctors report increased mental health crises among farmers. “A farmer dies by suicide every 10 days,” warns Dr Tim Driscoll, the Queensland State Manager for Mental Health at the Royal Flying Doctor Service.
It must be sold
Europe produces 61% of wine worldwide, but European countries just drink 48% of global production. Wine no longer is the drink with every meal in Spain, France or Italy, the countries that account for 50% of wine produced.
It might sound reassuring, therefore, that every second bottle of wine gets opened in another country where consumers pay more than in most countries of origin. But export markets are tricky, too. Inflation, taxes and tariffs drive the prices up (especially if compared to times before the Covid pandemic) in many countries – foremost the US, the biggest and one of the highest-priced wine markets globally. One third of all EU wine exports travel across the pond.
In view of all difficulties, the French government granted an aid programme worth € 5 billion to help exporters ship large stocks to the USA before the new tariffs come into force.
The pandemic affected prices as well as drinking habits. In 2024 China’s imports rose 14% in volume and 38% in value. But consumption fell by 19% and, now with the third biggest vineyard surface in the world, China is seeing a growing trend towards drinking domestic.
Russians zipped 2% more wine despite an international boycott and enlarged their vineyards by 2.2% to a total 108,000ha, many of which may be on Ukrainian soil. Yet another challenge for international winemakers to contend with.