The Northern Hemisphere harvests are complete and all have come in lighter than average to varying extents. This has ensured 2021 global wine production will be – according to the OIV – “extremely low” at 247.1-253.5 million hectolitres, down 4% from 2020 and down 7% from the 20-year average.
However, the shortfall is mainly concentrated in France where the crop is projected to be down 25% versus the five-year average – Italy and Spain are both forecast to see crops down only 9%. Also, the OIV identified the Southern Hemisphere as having had a “record-high” crop in 2021, up 19% versus 2020, with only New Zealand registering a shortfall.
This, combined with cautious buying activity due to a lack of visibility on future sales, means we do not see a big bulk wine shortage from a global standpoint, with supply struggling to meet demand only on specific items such as – but not exclusively – Chardonnay, Sauvignon Blanc, high colour/high alcohol reds, Pinot Noir in some instances, and Italy’s Prosecco and Pinot Grigio. Global availability of red wines and generic wines appears sufficient, with Argentina, Australia and Spain possessing sizeable inventories of reds, so too France despite this year’s short crop – both Australia and France are seeking to use the greater demand for whites to shift red wines via package deals.
The world is currently in a novel position – emerging from a global pandemic – so making future sales projections is highly difficult. Could the rapid economic bounce-back we are seeing in many countries be, in 2022, the very thing that harms wine sales, as supply chains struggle to meet demand and inflation, in turn, stagnates consumer spending?
Like every industry using sea-freight, the wine industry has seen its ability to ship goods greatly affected by soaring transport costs and plunging shipping reliability. Each of our offices around the world continues to highlight shipping container shortages as a big headache, with evidence that protracted shipping speeds are now slowing the marketplace and scuppering bulk wine deals.
For instance, even this far out from Chinese New Year on 1st February 2022, wines from France require immediate loading in order to have a good chance of arriving in time. Chile’s 2022 grape market, meanwhile, has slowed in the past 2-3 months in light of the shipping delays, with wineries only willing to acquire more grapes if there is a specific wine contract in place: buying grapes on spec is now seen as a risk by these wineries, as they foresee shipping issues potentially harming international buyer demand for trans-ocean bulk wine in 2022.
There is no quick fix for these logistics issues and it is widely assumed they will be a feature of the next year at least. We have managed to mitigate some of the impact by encouraging open, daily communication between buyers, suppliers, freight-forwarders, shipping agents and ourselves at Ciatti. The message is: don’t leave things to their own devices. We have found those suppliers/buyers attentive in keeping tabs on their shipments have been the most successful in getting them to where they need to be in the best possible time.
Ciatti is available for anyone who requires help and advice regarding this issue and to assist with all grape and bulk wine needs. Click here for more reports and information.