Wine Industry News Round-Up for the Week Ending 1/12/24

A look back at the events of the wine industry from the previous week.

Table of Contents

The global wine culture is evolving, with France’s historical dominance challenged by emerging wine regions and changing consumer preferences. The U.S. alcohol industry faced its worst year since 1991, with declines in wine and beer sales, counterbalanced by the rise of ready-to-drink cocktails and a societal shift towards moderation. Direct-to-consumer (DtC) shipments are becoming increasingly vital for wineries, adapting to changing market trends and consumer health consciousness. Thailand’s wine tax reform, reducing import tariffs and excise taxes, could open opportunities for Australian winemakers. In Washington, the wine industry is undergoing a transformation, seen not as a crisis but as a chance for growth, with a focus on premium offerings and direct-to-consumer sales. The wine industry is also adapting to new labeling laws in the EU and the US, aiming for greater transparency. In sustainability, Bundschu Co has achieved Regenerative Organic Certified® status, demonstrating a commitment to environmental and social integrity. Lastly, Oregon State University is developing AI-powered robots for eco-friendly pest control in vineyards, showcasing technological innovation in sustainable viticulture.

Cultural Wine Trends

France No Longer Defines Global Wine Culture. Can It Adapt? | VinePair

France, historically the epitome of wine culture and a benchmark for quality winemaking, is grappling with a pivotal shift in global wine dynamics. The nation’s long standing dominance in wine is being challenged by emerging wine regions, changing consumer preferences for novelty, and an increasingly competitive international market. In response, French wine culture is at a juncture where it must pivot and adapt. The recent crisis in the French wine industry has prompted actions ranging from protests against cheap imports to government aid for vintners to destroy wine and uproot vines. French wine education is also evolving, with students seeking inspiration abroad in wine regions like Napa Valley to bring new perspectives home. The wine industry in France now confronts the reality of a global marketplace where tradition alone no longer guarantees success and adaptation is imperative for maintaining relevance and competitiveness.

Wine Industry Economic Trends

US Alcohol Industry’s Worst Year Since 1991 | Wine-Searcher News & Features

In 2023, the U.S. alcohol industry experienced its worst year since 1991, with significant declines in wine and beer distribution, despite a rise in the sale of ready-to-drink cocktails. Analyst Jon Moramarco reports a decrease across the board except for these cocktails, attributing the slump to fewer equivalent alcohol servings consumed per person. However, inventory reductions across the supply chain may skew the figures, potentially indicating a recovery next year. Notably, the industry is facing generational shifts in consumer preferences, as younger people are drinking less and showing interest in alternative substances for relaxation, aligning with health concerns. Although consumer spending on alcohol has risen slightly due to inflation and higher restaurant margins, this has not translated into increased volume sales, highlighting a concerning trend for the industry that may reflect a broader societal shift in attitudes towards alcohol.

DtC Shipments a Bright Spot for Wineries in Evolving Market

The wine industry is facing a crucial period of adaptation with direct-to-consumer (DtC) sales becoming a key revenue stream, countering a general decline in alcohol distribution volumes. Despite a smaller volume, DtC shipments represent a significant portion of wine revenue, highlighting its growing importance to winemakers. The market is contending with a complex blend of inventory cuts and shifting consumer trends, including a move towards premium products and an increasing health consciousness among younger consumers that perceive alcohol as a risk. Wineries are now challenged to find innovative ways to appeal to new consumers and align their offerings with contemporary lifestyles.

Thailand’s wine tax reform could be opportune for Aussie winemakers | Retail News Asia

Thailand’s new wine tax regime has reduced import tariffs and excise taxes on wines, potentially boosting Australian wine exports and opening the Thai market to more affordable imported wines. This follows a relaxation in liquor sales, including lifting a ban on afternoon sales and extending operation hours for entertainment venues, intended to promote tourism. The significant tax reductions—from an average of 250% to much lower rates—are designed to support small-scale producers and stimulate the economy, although they may also lead to a decrease in government revenue from the alcohol sector. These changes are set to take effect soon, marking a notable shift in Thailand’s approach to alcohol taxation.

Is Washington Wine in Crisis?

The Washington wine industry is experiencing a period of change, with the state’s largest winery, Ste. Michelle Wine Estates, drastically cutting back on grape purchases and implementing layoffs. However, industry experts see this not as a crisis but as an opportunity for growth and evolution. The state’s varied production presents challenges in establishing a clear identity among more than 80 grape varieties. Yet, despite these challenges, Washington wines—particularly premium offerings—are maintaining strong markets, with direct-to-consumer sales thriving and a consistent out-of-state shipment volume. The shift also opens up opportunities for other wineries to access quality vineyards and for the industry to explore and promote underappreciated varieties like Syrah. Optimism prevails amongst winemakers, suggesting that while the industry is in a state of transition, the potential for growth and quality remain strong.

Labeling Laws Another Challenge for Wine | Wine-Searcher News & Features

Recent changes to wine labeling laws in the EU and impending shifts in the US pose new challenges but also opportunities for transparency within the wine industry. Starting from December 2023, EU wineries must disclose ingredients, allergens, and nutritional information on their labels, with an alternative to provide this data via QR code or website link. While US changes are still theoretical, with no clear timeline, the industry anticipates similar requirements following consumer litigation. These adaptations are met with mixed reactions: some industry members see this as a move towards greater consumer awareness and are ready to comply, using technologies like digital labels and QR codes for compliance, whereas others express concerns about the implications of full disclosure of additives like Mega Purple, fearing it may deter wine consumption. Nonetheless, the industry acknowledges a growing consumer demand for product transparency.

Climate & Sustainability

From Dirt to Glass: Bundschu Co Achieves Regenerative Organic Certified® Status

Bundschu Co, a Sonoma County family-owned wine company known for its premium estate wines and involvement in music and arts in the region, has achieved the Regenerative Organic Certified® (ROC) status, underscoring its long-standing commitment to sustainable practices. This certification, which requires adherence to rigorous standards of soil health, animal welfare, and social fairness, builds on the company’s 165-year legacy of holistic farming. Emphasizing a science-based, outcome-driven approach, the ROC framework addresses the interconnectivity of land, animals, and people, striving for environmental and social integrity. As one of the first wineries to receive this distinction, Bundschu’s efforts reflect their dedication to climate stewardship and setting an example for sustainable practices in the wine industry, promoting a consumer shift toward environmentally and socially responsible products.

Technology Innovation in the Vineyard

Scientists Employ AI Robots Against Insects Threatening Vineyards

Oregon State University researchers are testing an AI-powered robot named “Pied Piper” to naturally disrupt pest mating using harmonic vibrations, offering an eco-friendly alternative to chemical pesticides. Integrated with organic and biodynamic farming practices at Stag Hollow Winery, the robot’s vibration mating disruption (VMD) technology jamming the mating communication of pests like treehoppers aims to protect vineyards from grapevine red blotch virus. The innovative robot, inspired by similar Italian research, represents a new frontier in sustainable pest management in viticulture.

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