Global Demand Grows as Supply Stalls

Global Demand Grows as Supply Stalls

The world’s thirst for wine continues to grow, even as weather affects production.
By Wine-Searcher staff | Posted Thursday, 13-Apr-2017

There is less wine in the world and more people are going to be drinking it, according to reports released this week by three major agribusiness organizations.

Global wine production fell by 3.2 percent last year, from 276 million hectoliters (7.3 billion gallons) to 267m hL, according to the International Organisation of Vine and Wine’s (OIV’s) most recent report, with just a handful of producing countries posting an increase. The United States was the winner there, with a 10 percent jump on 2015 production. Australia wasn’t far behind with an increase of 9 percent, and Spain managed to boost its total output by 4 percent.

Several of the topics addressed included how the experiential cannabis category is becoming more high-end and accessible for different celebrations and consumers than it has ever been. They also touched on how the business and consumers’ perspectives on weed are changing. Another topic included how end-users might be able to best enjoy both wine and weed in the course of a single evening, perhaps both to a lesser degree than they might normally.

The new experience

Marketing executives in the weed business are trying to upscale the journey and adventure while making it seem less psychoactive. “The idea is to enjoy its benefits without getting high,” says Alicia Rose, founder and president of the Marin County-based HerbaBuena Cannabis Company, which grows and produces weed-based products.

She notes that cannabis usage has long been recommended for all types of physical aliments – from anxiety and arthritis to cancer – as well as making the body more open to unique sensory experiences. Her interest in its usage stems from positive experiences it has had on sick family members, including her mother.

She adds that the industry, over the past years, has introduced myriad new and different ways to enjoy the cannabis experience. They include topicals, vaporizers, edibles and whole-herb extractions at very low doses.

CANNACraft business development officer Nicky Blaufarb also notes that some of the best examples of what is grown in California can be offered to consumers in delivery vehicles such as chocolate-covered strawberries, although “diehards are always going to want to smoke flower [actual cannabis plant]”. For those looking for a higher-end experience, she notes that: “Chocolate and vape pens go well with concerts.”

Rose adds that cannabis-delivery vehicles are being rolled out in new formats not only for their sensory appeal but because “there was a need for someone who could provide the same quality and purity in cannabis as we’ve come to expect in our organic food and fine wine”.

The wine overlap

Many in the wine business have long been wondering if the new cannabis luxury experience will soon come paired with a glass of expensive Cabernet Sauvignon. Perhaps the future of wine, food and high-end tourism will involve a truffle, a glass of Pinot and a delicately rolled spliff, all presented on one tasting plate at some of the best wineries in the Napa Valley.

Rose says that that experience is already happening. It is only logical since “they’re both highly regulated and highly prized agricultural products that, in their highest form, have the ability to provide joy and elevate the human experience”.

Italy remains the world’s largest producer of wine, with 50.9m hL flowing from its wineries in 2016, comfortably ahead of France (43.5m hL), Spain (39.3m hL) and the US (23.9m hL)

The big losers were Argentina and Chile, who saw falls in production of 29 and 21 percent, respectively. French production fell 7 percent and South Africa’s by 6 percent. In the minor wine-producing countries, Brazil’s production fell an astonishing 55 percent, while Hungary saw a drop of 38 percent. Much of the global drop-off was down to adverse weather conditions.

The report also predicted a slight rise in consumption for 2016, to 242m hL, which would be the highest level since 2013, but still well below the historic highs of 2007/08, when consumption hit the 250m hL mark.

While the OIV was making its cautious predictions in Paris, Italy’s ISMEA was playing a more jaunty tune at Vinitaly, according to the Italy24 news channel.

The agricultural research and funding institute predicted growth in consumption of 4.3 percent over the next four years, with China once again leading the pack as the fastest-growing market, with consumption predicted to jump 21.6 percent. Russia (6.1 percent) and the US (5.7 percent) are also set to grow, ISMEA general manager Raffaele Borriello told the Vinitaly international trade show in Verona.

Fittingly, given the audience, ISMEA predicted that Italy would be the main beneficiary of this renewed thirst for wine – Borriello said Italy could expect a 10 percent increase in global sales by value through to 2020, heading off France and Chile (6.1 percent growth) and the US (4.3 percent).

Meanwhile, a third report this week showed that the US thirst for wine seems unquenchable, with imports from the rest of the world increased by 3 percent in volume and 2 percent in value.

The Rabobank wine quarterly report revealed that Italy was still the biggest exporter of wine to the US, but growth was being driven by sparkling wines, which increased by 20 percent in volume in the first eight months of 2016, reflecting the world’s current love affair with Prosecco.

The star performers in the US import market also included Australia. Despite a fall in export volumes, export values rose by 7.3 percent, boosted by a sharp rise in the US market.

New Zealand export growth was also impressive, with a volume boost of 6.9 percent and a value lift of 5.3 percent. The UK briefly regained its position as New Zealand’s main market by volume, but US growth is expected to change that, as consumer growth flourishes and currency crosses favor New Zealand producers.

UK Agora
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