Global wine production likely to touch a 62-year low, climate change is to blame

Winemakers of the world are not in the best of spirits. First, they were hit by a fall in demand – a fall from 241 million hectolitres (mhl) in 2018 to 232 mhl in 2022.

The France-based International Organisation of Vine and Wine (OIV) estimates that global wine production is likely to drop by 7% in 2023, from 2022 levels that were already below average. It will be somewhere between 241.7 and 246.6 million hectolitres across the 29 countries that account for 94% of total world wine production, this would be a 62-year low.

This, they blame on erratic weather patterns – from unseasonal rains to floods to drought to heatwaves – that have damaged crops.

Giorgio Delgrosso, Head of Statistics and Digital Transformation, OIV, said, “We expect very low production at the world level. This is the combination of an extremely low harvest in all the major Southern Hemisphere countries due to climatic variation. This has led to the lowest production levels at the world level in history. It is the lowest since 1961.”

Going by provisional numbers for 2023, top producers like Spain, Italy, Australia, Argentina, Chile, South Africa, and Brazil have seen wine production fall between 10% and 30%.

Meanwhile, Greece suffered the most from bad climatic conditions, with output falling by over 45%.

Only the US and a few EU countries experienced favourable climatic conditions resulting in average or above-average volumes.

But experts point to a strange silver lining. Delgrosso said, "We have seen a decline in wine consumption starting in 2018, more or less. So, it is true that a very low production this year is not good news, but at least it could bring some equilibrium to the world market." The industry has not been able to reach pre-COVID in consumption even now.

Delgrosso hopes in a few years (2-3 years if not less) the demand should pick pace. Any short-term demand revival will need a very unexpected event. He added it is difficult to forecast largely due to many economic and geopolitical uncertainties. “We expect some structural changes. Some of these changes in consumer preferences will probably stay.”

The industry is confident the role of Asia in the revival of the industry will be crucial. “Many growers look at South and East Asia, with great interest in countries and markets like India, Japan, South Korea and China. They have a huge potential.”

India represents 0.1% of the world's consumption and 18% of the world's population. Delgrosso stated, “So, you see that there is a huge potential for the one market development there.”

Even for Indian wine-makers the climate-induced fall in production is a concern.

Ashwin Rodrigues, secretary of WineGAI and founder of Good Drop Wine Cellars, said, “The variation in climate hasn't been so much as yet. However, there have been variations, especially with rains which have not followed the patterns."

For the Indian wine industry, however, there is still some time to make up when it comes to sales – because peak demand season is between November and December when the wedding and festive season hits fever pitch. But Indian wine-makers share the global industry's concerns when it comes to climate change – because erratic weather patterns are tough to predict, and the effects of such hits on harvest seasons could be felt for many years.