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Agrifrance 2017 rural report: The US wine market

  • 03.05.2017

Agrifrance, a specialist division of BNP Paribas Wealth Management, publishes its 2017 conjuncture note: the wine market in the United States, a new eldorado for French producers

Agrifrance

For more than 17 years now, Agrifrance and BNP Paribas Wealth Management have been producing an annual report providing an overview of the French rural land sector.

With 40 years’ experience and know-how, Agrifrance offers you advice, services and transactions in rural and prestigious properties: vineyards, forests, farmland, country estates and hunting grounds in France.

Discover the highlights of the study

Firstly, panorama of the rural land market in 2016:  

  • Farmland: Historically low yields in France and global prices in decline (-16% agricultural income down)
  • Vineyards: Wine production is down, with sharp regional contrasts (43.2 million hectolitres produced in France in 2016 so -10% decline vs. 2015) 
  • Forests: Sluggish yet volatile markets (5.7 bn € export deficit in the french timber industry)

Secondly, the US wine market: a new eldorado for French wine  

The world’s two largest economies, the US and China, offer new highly-attractive prospects for the wine industry. The US is the main driver of this growth, with an increase in both volumes and prices. 

  • Consumption: Strong domestic demand has been on the rise for 25 years (The US has been the world’s top market for wine consumption since 2013. Sales reached 31 million hectolitres in 2015, the equivalent of 13% of world consumption).
  • US imports: As the third-largest market by volume, with 11 million hectolitres (10% of export volumes worldwide), the US was a major driver of global wine sales in 2015. 
  • French wine has an excellent reputation in the US:  French wine is still a reference at the top end of the market, particularly for serving at special occasions. With only 11.6% of volume sales, France ranks just behind Italy in second place, with a 29% market share by value. The United States is the first customer of Provence, from which they buy 36% of the wines exported.

Worldwide, one bottle of wine in four is consumed outside its country of origin, but – in contrast to New Zealand, Australia and Chile, countries which export 60% of their wine – the United States consumes 80% of its own production. Since 2013 the US has been the world’s leading wine-drinking country, consuming 31 million hectolitres in 2015, i.e. 13% of global consumption. Next comes France with 11%, followed by Italy and Germany, each with 9%, and China with 7%. 

“ The US is a market for both wine producers and consumers. With 419,000 hectares, it boasts the world’s fifth-largest vineyard area.With 22 million hectolitres, it is the fourth-biggest market by volume. THE PROSPECTS IN THE UNITED STATES ARE VERY FAVORABLE FOR FRENCH WINES WHICH REMAIN A REFERENCE ON THIS MARKET. COMPETITION IS RUDE, BUT THE FRENCH TERROIR HAS MANY ADVANTAGES. ”

Benoit Léchenault

Head of Agrifrance