Winescape: Spring 2024

Published four times a year, “Winescape” offers comprehensive analysis of the wine and grape markets as well as trending topics. Download current and previous issues of “Winescape” at winescape.terrainag.com.

In the Spring 2024 issue of “Winescape,” a new wine industry report series from Terrain and American AgCredit, author Chris Bitter:

• Dissects crucial data from 2023
• Unpacks the preliminary California Grape Crush Report, and
• Makes his case for why the grape market is structurally oversupplied — and what can be done about it

In the Market Happenings section, Chris looks at key datapoints for 2023 that reveal the persistence of wine’s post-pandemic funk.

“2023 was not the turnaround year for wine,” he writes. “Sales fell in volume terms across channels and price segments but held up better in dollars. The decline has been relatively steady over the past 12 months, with few signs of either improvement or deterioration.”

He continues, “I do not expect to see a major shift in the trajectory of overall wine sales by volume in 2024, though I do see the potential for some stabilization (a slower rate of decline) in demand later in the year, assuming the soft-landing economic scenario pans out.”

In the Trending Topic section, Chris examines the grape market’s structural supply-demand imbalance, pointing to 2023’s below-average grape crush as an important indicator.

“The recent surge in bulk wine available for sale and limited activity on uncontracted grapes for the 2024 vintage make it clear that even 3.7 million tons [of grapes crushed] was more than enough to satisfy demand,” he writes.

He continues, “To restore the balance between supply and demand, either wine shipments must improve or acreage must be removed. Given the muted outlook for wine sales in the near to medium term, an increase in demand alone is not likely to solve the problem. Acreage will almost certainly need to be removed. The question is not if, but what and where.”

The Spring 2024 issue is available to read in full here: Winescape.terrainag.com.