Global wine consumption has been experiencing a steady decline in recent years, prompting significant changes in the wine industry. Amid growing health consciousness and rising inflation, consumers are increasingly opting for organic and orange wines, non-alcoholic alternatives, and premium fine wines.
According to the International Organization of Wine and Vine’s 2024 World Wine Production Outlook, global wine production dropped by approximately 2% in 2024, marking the lowest levels since 1961. The decrease in production was largely attributed to climate change and adverse weather events, with France being hit hardest by these challenges. The country’s output saw a drastic fall, which significantly impacted the global wine supply.
This decline in production mirrors the downturn in global wine consumption, which fell by 2.6% in 2023 compared to the previous year, a trend that followed years of low consumption rates. As Richard Halstead, COO of alcohol industry research firm IWSR, explained, people are increasingly making conscious decisions to reduce alcohol consumption. While spirits like cognac and whiskey remain popular for special occasions, wine and beer, once daily staples, are now being enjoyed less frequently.
This shift has led the wine industry to adjust its focus, moving away from everyday consumption to positioning wine as a more occasional luxury. Industry experts emphasize the growing interest in more specialized wines, including organic, low-intervention, and orange wines, which are often seen as more artisanal. “People are more interested in the product itself, rather than just as an alcohol delivery mechanism,” Halstead said.
The focus on specialized wines has sparked growth in niche areas of the wine market. A study by market research firm Horizon forecasts that the organic wine market will grow at a compound annual growth rate of 10.3% between 2024 and 2030, with Europe expected to generate the highest revenue. Similarly, orange wines, which are made by fermenting white wine grapes with their skins for longer, have seen significant growth.
Tatiana Fokina, CEO of Hedonism Wines, a Mayfair-based spirits shop known for its rare offerings, noted that wine consumers are becoming more educated about their choices. “People are developing more refined palates and are seeking out higher-quality wines, focusing on the production process and the origins of the wine they drink,” she said.
This trend has had a noticeable impact on the fine wine market, which saw an 11% drop in prices in 2024. Despite the downturn, experts predict a resurgence in the fine wine sector, particularly as younger buyers begin to enter the market. This demographic shift is supported by the growth of digital marketplaces, which are helping to broaden access to fine wines.
Fokina added that modern wine drinkers are now more inclined to spend money on one premium bottle of wine, rather than buying several bottles of lesser quality. There is also a growing interest in smaller portions, such as half-bottles, as consumers look for more flexible wine-drinking experiences.
Another key trend in the industry is the rise of low and non-alcoholic wines, driven by younger generations. Gen Z, which now accounts for 45% of all drinkers, is leading the charge, with health and wellness being key factors behind their preferences. Research from Mintel indicates that individuals aged 20-24 in the U.K. are half as likely to purchase alcoholic beverages compared to older generations.
The growing demand for non-alcoholic drinks, particularly in the wine sector, has been described as a transformative phase. The IWSR predicts that the alcohol-free drinks market will grow at a compound annual growth rate of around 12% between 2023 and 2027, a much higher rate compared to beer and cider. Michel Doukeris, CEO of AB InBev, the world’s largest brewer, emphasized the importance of non-alcoholic drinks in allowing consumers to maintain social connections without the need for alcohol, particularly when driving is a concern.
In conclusion, while global wine consumption has been on the decline, the industry is adapting to evolving consumer preferences, with growth seen in specialized wines and non-alcoholic options. As health-conscious consumers seek new ways to enjoy wine, these emerging trends are reshaping the future of the global wine market.
You Might Be Interested In:
