Wine Industry News Round-Up for the Week Ending 12/22/23

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

Table of Contents

Mexico’s wine industry is flourishing, with domestic consumption tripling over the last two decades. Efforts are underway to increase the market share of Mexican wines, targeting younger demographics with innovations like organic wines and alternative packaging. Quality improvements are evident, but challenges remain, including competition from international producers. In Valle de Guadalupe, young winemakers are revitalizing the region with diverse, quality-centric approaches. Globally, Australia anticipates the lifting of China’s wine tariffs by 2024, potentially reinvigorating a key export market. The direct-to-consumer alcohol shipping sector is expanding rapidly, driven by technological advancements and consumer demand. Meanwhile, the U.S. domestic wine market has seen a slight decline in off-premise sales. Advances in science, like using AI to identify Bordeaux wine terroirs, are notable. Lastly, in luxury wine trends, the high cost of Burgundy is driving interest towards Champagne as a viable alternative in markets like Hong Kong.

Wine Trends in Baja’s Valle de Guadalupe

Mexicans Are Consuming More Wine — And Planting More Vines | Meininger’s International

Mexico’s wine industry has seen a remarkable surge, marked by a threefold increase in domestic wine consumption over two decades, now reaching 1.3 liters per capita. Salomón Abedrop, head of the Mexican Wine Council, aims for Mexican wines to represent 50% of the national market. The industry targets younger consumers, especially women, encouraging innovation in products like organic and natural wines, bag-in-box, and canned options. Quality improvements in Mexican wines have garnered attention, with efforts to establish geographic indications for regions like Querétaro and Baja California. However, challenges persist, including tax issues and stiff competition from other wine-producing countries like Spain, Argentina, and Chile, prompting a focus on elevating quality to stand out in the global market.

Valle de Guadalupe’s Groundbreaking Winemakers Are Passing the Baton | SevenFifty Daily

In Valle de Guadalupe, a historic winemaking region in Mexico’s Baja, a new generation of winemakers is redefining the area’s identity. Rooted in tradition yet embracing innovation, these young vintners have revitalized winemaking after a decline, now propelling the region forward with their diverse, quality-focused approach. With figures like Natalia Badán, Juan Carlos Bravo, Pedro Poncelis Raygoza, and others, the baton is passing to a new wave eager to experiment and honor the land. Their commitment to unique varietals, vermouth, pét-nats, and redefining winemaking methods showcases a vibrant energy and determination to shape the future of Mexican wine culture, despite facing misconceptions and challenges from within and outside the industry. For those of us that love visiting Valle de Guadalupe wineries, this is excellent news.  

Wine Industry Economic Trends

Australia confident of end to China wine tariffs early in 2024 | Reuters

Australia anticipates the end of China’s punitive tariffs on its wine early in 2024, with Trade Minister Don Farrell expressing confidence in a positive outcome from Chinese authorities. The expectation follows an agreement reached in October to settle a World Trade Organisation dispute regarding Australian wine, leading to a review of anti-dumping tariffs previously set to last until 2026. These tariffs, imposed in 2021, significantly impacted Australia’s top wine export market, but recent developments indicate a potential shift in strained relations between the two nations, marked by the easing of trade blocks on most Australian exports by China.

Consumer Demand Drives Alcohol Shipping Growth | Beverage Dynamics

The alcohol industry’s direct-to-consumer (DTC) shipping has surged, driven by consumer demand and accelerated by the pandemic. This growth includes both legal and illegal shipping practices. Part one of the series focused on illegal methods, including shipping beyond legal limits and operating unregulated shipping warehouses. Part two explores compliant shipping within state and federal laws, showcasing the faces of a rapidly expanding DTC industry. Tech companies like ReserveBar connect consumers to licensed retailers for lawful purchases, emphasizing a platform for exposure and learning without direct shipping. Despite concerns about potential illegal shipments by retailers, ReserveBar asserts commercial agreements with reputable retailers and advocates for law enforcement. Sovos ShipCompliant leads in compliance tools for alcohol producers selling directly to consumers, marking a significant advancement in this evolving industry.

Off-Premise Sales Value Down 2%

Off-premise sales of domestic table and sparkling wines in NIQ outlets experienced a 2% decline in value, nearing $887 million, over a four-week period ending Nov. 4. Volume also dropped 5% to 8.3 million cases, with table wine and sparkling wine sales both falling by over 2% and 3%, respectively. In a year-long span, domestic wine sales saw a 2% decrease to $12 billion, with a 6% drop in volumes totaling 111.3 million cases. On-premise spending for the 52 weeks up to Sept. 9 remained unchanged at $14.9 billion, with gains in white and sparkling wines offsetting declines in other categories, notably pink wines, which experienced an 8% decrease to $834 million in sales.

Science & Technology

Scientists Use Artificial Intelligence to Identify Bordeaux Wine Terroir

A neuroscientist and enologist collaborated, using machine learning and gas chromatography to identify the origins of 80 wines, confirming the concept of terroir. They mapped the wines’ chemical signatures, correctly clustering them according to Left and Right Bank origins in Bordeaux. This research validated terroir and holds broader implications. By reducing complex wine chromatograms to XY coordinates, they recreated Bordeaux’s geography, suggesting a chemical similarity between wines from closer areas. The study opens possibilities for fraud detection, adapting to climate change, and expanding research to global wines, underscoring the potential of this breakthrough in wine chemistry and machine learning.

Luxury Wine Market Trends

Ginsberg+Chan: Champagne ‘compelling’ with Burgundy prices still high

Ginsberg+Chan, a Hong Kong wine merchant, has expanded its portfolio with two Champagne producers, Alexandre Grimée and Crété Chamberlin, in response to escalating Burgundy prices. They note the shift in Champagne from a celebratory drink to a prominent dinner wine, paralleling the complexity of top-tier Burgundies. These producers represent a young, ambitious wave in winemaking. As Burgundy’s costs soar, Champagne emerges as an economically viable alternative with terroir-driven complexity. The merchant emphasizes the importance of a diverse Champagne selection, showcasing its versatility, quality, and comparative value against renowned Chardonnay and Pinot Noir regions, aligning with Asian markets’ preference for structured wines.

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