On Course – Big Challenges
- Vineyard area (ha): USA: 420,000; California: 256,975
- Winegrowing enterprises: USA: 11,000; California: 4,700
- Production volume 2021 (mill. hl): USA: 29.26; California: 24.58
- Export volume 2021 (mill. hl): 3.38
California accounts for around 80% of U.S. wine production. In addition, growing regions such as Washington State are also becoming increasingly interesting for foreign investors. Nevertheless, the Golden State remains the epicenter of the wine industry.
In 2021, 3.61 mill. tons of grapes were harvested. That's slightly more than the previous year (3.4 mill. tons), when growers had to contend with numerous fires, but it doesn't come close to 2018's record harvest of 4.28 mill. tons. A total of 238 mill. 9-liter cases of California wine were sold in 2021, or about 2.856 bill. bottles of wine. That's slightly more than the previous year (2.796 billion) and about the same as in 2019, flushing $44 billion into winemaker and winery coffers.
The "US Wine Industry Report" of Silicon Valley Bank, which has been published annually for more than 20 years, sees 2021 as a good year for the wine industry in the USA, one in which the industry was able to recover somewhat from the (sales) difficulties caused by the Corona pandemic. However, the view into the future is rather pessimistic: Wine is losing its "coolness" among consumers, younger people are reaching for the wine bottle less frequently, while the average buyer is getting older. Last but not least, climate change poses major challenges for winegrowers, with a lack of water and the increasing risk of forest fires putting a strain on production in particular.
Sources: Wine Institute, Statista, Silicon Valley Bank US Wine Industry Report 2022
See also our interview with Rob McMillan of the Silicon Valley Bank: Future of the US Wine Industry
Bottled Exports up, Bulk Wine Down
- Area under vines 2020 (ha): 211,099 (incl. table grapes)
- Winegrowing enterprises: approx. 890
- Production volume 2022 (in mill. tons): 1.94
- Export volume 2021 (in mill. hl): 3.4
- Export value 2021 (in mill. $): 1,009 (817 for bottled wine)
- Per capita domestic consumption (litres per year): 22,5
Argentina remains in a difficult economic situation with high inflation rates and cost structures that are difficult to forecast. For example, although Argentina achieved a new record level of exports of bottled wines in 2021, exports of bulk wine fell by 40% due to significant price increases, so that total exports slumped by around 15% percent from the previous year's record level (3.9 mill. hl).
Malbec wines still account for two-thirds of bottled exports. The most important export countries are USA, United Kingdom, Brazil, Canada and The Netherlands.
The just-completed 2022 harvest was lower than the previous year due to a cool spring with late frosts. According to the wineries, however, it was one of the best harvests in the past 10 years in terms of quality.
Instituto Nacional de Vitivinicultura
Record Harvest, Decline in Vineyard Area
- Area under cultivation 2020 (ha): 136,200
- Winegrowing enterprises: approx. 360
- Production volume 2021 (mill. hl): 12.8
- Export volume 2021 (mill. hl): 8.7 (incl. must)
- Export value 2021 (mill. $): 1,969
- Per capita domestic consumption (litres per year): 15,7
Chile's wine production reached a new record of 12.8 mill. hl with the great harvest of 2021. Nevertheless, there is a reversal in the trend: After almost 30 years of almost continuous growth of vineyards in Chile, this process came to a halt. After reaching a peak in 2015, the area under vines intended for viticulture has actually decreased by about 5,800 hectares.
Chilean exports account for more than two-thirds of production. The main customer is China, ahead of the USA, Great Britain and Brazil. Exports to Germany, where bulk wine accounts for two-thirds of the volume, have been declining recently.
According to initial reports, the 2022 harvest is likely to be smaller again, mainly due to severe drought. However, the quality is generally reported to be very good.
Source: Wines of Chile
Harvest Volume up, Export Figures Suffer from China Crisis
- Area under vines 2021 (ha): 146,000
- Harvest volume 2021 (tonnes): 2,028,428 (+31%)
- Production volume 2021 (mill. hl): 14.8 (+34%)
- Export volume 2021 (mill. hl): 6.191 (-17%)
- Export value 2021 (billion €): 1.3338 (-29.8%, exchange rate 25.04.2022)
- Per capita domestic consumption (litres per year): 20.2
After the very low harvest volume in the previous year, yields have risen again by around a third. This should benefit buyers, as bulk wine prices are already starting to decline.
Exports have fallen significantly in 2021. While the export markets of Japan, South Korea and Denmark recorded visible growth, the slump in China, one of the most important export markets, is particularly painful. Partial compensation is to be achieved through a free trade agreement with India. Last year, Australia exported 86% less in volume and 81% percent less in value to China than in the previous year.
The main reason is undoubtedly the tariffs imposed by China: In March 2021, China had imposed anti-dumping duties ranging from 116.2% to 218.4% on Australian bottled wine imports (in containers of 2 liters or less) for five years. Australia has initiated dispute settlement proceedings at the World Trade Organization (WTO) to address this. It is very clearly hitting the value of exports, as higher priced wines have been the main exports to China, while the UK and EU countries tend to import lower priced wines from Australia. There were also fewer exports to other important markets such as the USA and Canada than before.
Wine Australia will not have its own ProWein stand in 2022.
Source: Wine Australia, The IWSR, Ciatti, OIV
A Sigh of Relief after a Normal Harvest
- Area under cultivation 2021 (ha): 40,343 (+0.97%)
- Production volume 2021 (mill. hl): 2.664 (-19%)
- Winegrowing enterprises:
- Export volume 2021 (mill. hl): 2.85 (-0.5%)
- Export value 2021 (bill. €): 1.14
- Domestic consumption per capita (litres per year): 9.6
Sauvignon Blanc was one of the most sought-after products worldwide in 2021. Sauvignon Blanc from New Zealand or Marlborough was even more difficult to source. The small crop hit New Zealand's winemakers during a boom period when no reserves from previous years were available.
Official figures for 2022 are not yet available, but the crop size appears to have returned to a normal range. However, this only slightly eases availability in the market. Whether the volume will be enough for a full year remains to be seen.
The New Zealand Winegrowers do not have their own ProWein booth in 2022.
Source: New Zealand Wine Growers
Normal Harvest Ensures Better Supply
- Area under vines 2021 (ha): 90,512 (-1.62%)
- Harvest volume 2021 (mill. tonnes): 1.46 (+8.9%)
- Production volume 2021 (billion litres): 11.4
- Domestic market volume 2021 (mill. hl): 3.94
- Export volume 2021 (mill. hl): 4.11 (+28.9%)
- Export value 2021 (mill. €): 617
2021 was a year of recovery for the South African wine industry after the horror year of 2020. In the wake of the Corona pandemic, the South African government repeatedly imposed sales bans on alcoholic beverages in order to relieve the pressure on hospitals. This led to a slump in consumption in the important domestic market. Logistics problems ensured that exports could barely compensate.
In 2021, the domestic market rebounded and exports also performed well. However, the structural problem of South African exports worsened in 2021. Barrel wine exports, which are not very profitable, increased by 45.5% to 2.66 mill. hl, and the average value of wines decreased.
Against a backdrop of poor profitability, vineyard acreage decreased again in 2021. In 2022, South Africans are expected to have harvested a normal crop.
Wines of South Africa will forego a ProWein joint stand in 2022.