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New producers, new consumers: The revolution of the global wine market

The top 5 key trends in today’s global wine market:

•        Exports have doubled over the past 20 years: with Europe maintaining its position as the global leader, exporting 58% of its annual production

•        The newer wine-producing countries (New Zealand, Chile, Australia and South Africa) have increased their export volume by 370%

•        The United States has overtaken France as the world’s foremost wine consumer, with average annual consumption of 12 litres per person

•        Europe still accounts for 50% of wine consumption worldwide

•        84 of the 100 most famous wine brands in the world are French

For over 15 years, Agrifrance, a specialist division of BNP Paribas Wealth Management, has published an annual report on France’s rural economic situation, providing insights into rural property investment.

This year’s report focuses on the major changes that have taken place in the global wine market over the past 20 years such as the arrival of wines from the New World and the rise of new consumers.

“The wine market has become a real global market. Despite increasing competition, very few brands have succeeded in really imposing themselves at international level, and growth prospects in the ‘premium’ segment are very good,” underlined Benoit Léchenault, Head of Agrifrance, adding: “While the vineyard real estate market is still the province of an experienced clientele, it remains a highly attractive refuge value both for French and foreign investors.”

60 wine-producing and 242 wine-consuming countries

  • Highly concentrated production

The 12 leading wine-growing countries account for 84% of worldwide production, estimated at 247 million hectolitres (equivalent to 37.2 billion bottles), a rise of just 2.2% over 20 years.

While wine production in Europe (in the lead with 59% of worldwide production) has stabilised at 146.6 million hectolitres, the newer wine-growing countries have increased their total volume by 48% over the same period. Chile, Australia and New Zealand have even seen their wine production rise by between 100% and 300%

Despite the tough competition that American, Argentinian, South African, Chilean, Australian and, Chinese wine growers have been creating for Europe, the traditional wine producing countries still remain the largest suppliers.

France, Italy and Spain have been alternating in first place, together accounting for some 47% of world wine production. In 2014, France regained world’s top spot in terms of production volume and maintained its position as world leader for value.

According to the British Liv-ex Fine Wine Index, 84 of the world’s 100 most famous wine brands are French. Given the rich diversity of its soil-types, climate and grapes, France is able to produce truly unique wines.

  • Consumption: Americans become the leading wine-drinkers

World wine consumption has fallen by 13.8% since 1980, to stabilise at 239 million hectolitres in 2013.

Europeans still account for over 50% of world consumption but new consumers have appeared on the scene to ensure the continuing popularity of wine-drinking.  Per capita, the United States has now overtaken France as the world’s leading wine market: where the average consumption is 12 litres per person per year.

The economic crisis and the rising price of wine have had a strong impact on wine consumption in Europe, prompting European wine growers to adopt a more global strategy of targeting other continents, mainly Asia and North America.

  • Exports: increase in value rather than volume

Wine exports, which account for 35% of all production worldwide, have almost doubled during the last 20 years. The rise in export value over this period (+87%) has outpaced the increase in volume (+63%).

Europe still maintains its positions as global leader, exporting 58% of its total wine production.

Meanwhile the new wine producing countries – New Zealand, Chile, Australia and South Africa – have oriented their sales strategy strongly towards world markets and currently export over 50% of their total production volumes.

The upmarket segment continues to have the most promising export prospects for French producers. American consumers are becoming the leading customers for French wines in value terms, now accounting for some 20% of France’s market for wines and spirits.

While the average world price for exported wines was EUR2.62 per litre in 2011, French wines command an average price of EUR7 per litre, with Bordeaux wines selling at EUR9.7, Burgundy wines at EUR10.6 and wines from the Champagne region at around EUR15 per litre.

For more key figures or to visualize the key findings, consult our website.

About Agrifrance

Agrifrance is the specialist rural property section of BNP Paribas Wealth Management, offering clients seeking the right investment and wealth management solutions the benefit of its over 40-year experience in the viticulture, farming, forestry and prestigious homes markets. With its network of recognised professionals, Agrifrance is also able to provide complementary services such as expertise in and management of rural properties.

About BNP Paribas Wealth Management

BNP Paribas Wealth Management is the sixth largest Private Bank in the world, with a presence in some 30 countries. Over 6,000 Wealth Management professionals located across all major world financial centres provide private investors with a wide range of tailored solutions in order to manage their assets for optimal results. At end-2014, BNP Paribas Wealth Management had €305 billion worth of assets under management.