December 20, 2024

Global Demand for Wine is Declining

Global wine consumption in 2023 was down 7% from its peak in 2017. In Australia, wine inventories have ballooned to record levels, and in France, the government is subsidizing the disposal of surplus wine. This is due to a loss of interest in alcohol among young people and an increased emphasis on quality, and producers are rushing to adapt to the new trends.

Consumption is sluggish in the world's largest consumer nations. The United States, the largest market, consumed 3.3 billion liters in 2023, a decrease of 1.6% in five years. France, in second place, decreased by 4.7%. The same is true of Germany and the UK.

In China, the world's seventh-largest country, where imported wine once boomed, consumption has almost halved in five years. The economic slowdown has cooled demand for high-end dining out and other services, and the national "luxury ban" movement has reduced purchases of gifts and entertainment.

In the US, the loss of interest in alcohol is most pronounced among Generation Z, which was born after the mid-1990s and represents 20% of the total population. They drink about 20% less alcohol per capita than millennials born between 1981 and 1996.

Generation Z receives a skeptical lifestyle that combines "Sober" and "Curious" and is skeptical of "sober curious" drinking. Non-alcoholic and "NoLo" beverages, meaning those with trace (low) content, are also popular.

In Europe, the consumption of red wine, which is often consumed with meat, is on the decline as vegans (complete vegetarians) and "flexitarians" (flexible vegetarians) who reduce their meat intake are on the rise.

In Australia, wine inventories have ballooned to 2 billion liters, equivalent to two years of production. One after another, heavy machinery has been used to crush vineyards and reduce cultivation.

The French government announced in August 2023 that it would spend 200 million euros (more than 30 billion yen) to dispose of surplus wine. Excess wine is distilled into ethanol for industrial use and converted into raw materials for perfume and rubbing alcohol. The country's Minister of Agriculture and Food, Feno, stressed "Winegrowers need to adapt to the changing consumer landscape."