October 15, 2014

Higher end wines are gaining market share as sales volumes increase and the average price of wine sold in the U.S. is rising according to Rabobank’s latest fourth quarter global wine industry report for 2014.  Wines that diluted their brand’s value and discounted prices to gain in the short-term are finding the current market trends a challenge.  Most U.S. wineries are carrying over large inventories because of recent large crops, and in the first seven months of 2014 U.S. exports increased by 2%.  This year’s crop is expected to be 5% -10% smaller than last year’s crop but still larger than most crops prior to 2012. Overall 2014 wine production in the EU will decline significantly with notable declines in Spain and Italy, and the French champagne market will face setbacks due to austerity measures hampering the Chinese market.  In Oceania, Australia saw a 7% decline in its 2014 harvest while New Zealand’s harvest increased by 29% year on year setting a new record.  New Zealand also saw export growth for the year with shipments to Germany in particular increasing 41%.  Chilean wine production is down by 22.8% because of frost and exports are down also by 11.2% by volume however, held-over inventories are meeting demand.  South African wine exports have been down 19.1% this year because of high exports in 2013 causing tight inventories and a market flooded with bulk wine from Spain.  Argentina has seen an 8% drop in production this year, but exports grew 23.5% for sparkling wines and 16.2% for varietal wines.

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