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Wine, the ancient elixir enjoyed for thousands upon thousands of years, is more popular today than ever. And it’s a big business, too. In the United States alone, 2012 saw more than 360 million cases of wine sold (that’s nine liter/12 bottles per case) with a retail value estimated at just under $35 billion. And while America is currently the world’s largest marketplace for wine consumption, other countries, such as China are rapidly developing demand. Demand looks to have grown so high, in fact, that many industry watchers are now predicting a major global wine shortage.
5 China and the U.S. are Driving Demand
According to most wine industry analysts, two groups of consumers are largely to blame for the predicted coming wine shortage: the new middle class in China and the Millennial Generation in the United States. As China becomes an ever wealthier and more cosmopolitan country, the demand for wine there has grown by some 400% in just half a decade. In the U.S., demand has not accelerated quite so quickly, but among Millennials (those born between 1980 and 2000, roughly) wine is rapidly becoming the alcoholic beverage of choice.
4 European Wine Production Has Plummeted in Recent Years
Three European nations rank as the world’s most prodigious producers of wine—France, Spain and Italy. Over the past several years, however, all three countries have produced much less wine than usual. This can be traced to fewer acres being used to grow wine grapes and to less production from the land used for grapes due to poor growing conditions. This decreased production and increased demand may create a perfect storm of price hikes and shortages.
3 Technically, We are Already Experiencing a Shortage
Experts predict a coming wine shortage of some 300 million cases annually if demand remains robust and supply stays near current levels. But a closer examination of the data reveals that we are essentially already experiencing that much of a shortfall. Liter for liter, the current supply of wine can almost meet current demand, but not all wine already on hand will be used simply to fill retail wine bottles. Much of the wine produced each year goes to other uses, such as for making vermouth or other such mixers, for flavoring in vinegars or confections, and so on. In fact, the 300-million case gap may already be a reality.
2 Some Experts Say No Wine Gap Is Coming at All
Perhaps the industry watchers sounding alarm bells about a coming wine shortage have simply been swept up by sensation. At least a handful of wine experts dismiss all the talk of a wine gap out of hand, despite one of those sources sounding the alarms being a report from Morgan Stanley. When taking a longer view of the industry, some analysts say that worldwide wine production has grown so much in recent years that a few bad harvests in Europe and enhanced demand in the US and China simply can’t cause demand to outpace supply in the long run, especially as, by all accounts, 2013 looks like it will be a bumper year for wine growers the world over.
1 The Wine Shortage of the Late 90s Led to a Wine Glut
The potential coming wine shortage, should it materialize, will not be unprecedented. The years 1997 and 1998 also saw a global wine shortage; or at least they saw the potential for one that had industry watchers sounding the alarms. The perceived wine deficit of the late 90s saw a surge in planting and production at the turn of the century that led to a large surplus of wine available. This glut drove down prices, leading to staple bargain brands like “Two Buck Chuck” and may have inadvertently inspired the popularity of wine among youngsters that is leading to today’s greater demand and potential shortage.