Soundness, consumption growth and interest in the wine world: the 2024 of fine wine is rosy

Despite the fact that the secondary market is experiencing a long period of downturn, linked to the difficulties encountered by the global economy, and witnessed by the performance of the main “stock market” indexes, starting with the Liv-ex, a certain optimism is returning around fine wines. That filters from 85% of the judgments of the 965 experts in the world of fine wines - Masters of Wine, Master Sommeliers, wine merchants, producers, distributors, journalists, collectors, restaurateurs - involved in the “2023 Gérard Basset Global Fine Wine Report - Finger on the pulse” by Liquid Icons, the soul of “The Golden Vines Awards”, given in recent days in Paris, according to which, in 2024, the market will continue to grow. For 60% of the experts, the forecast is positive, and for 25% even very positive. Surprisingly, as noted in 2022 and 2021, only 8% of the responses indicate stability, and “negative” sentiment is present in the remaining 7% of the responses, with no “very negative” forecast, despite the prevailing great geopolitical and macroeconomic uncertainty we are going through.

Underpinning the optimism of industry players is first of all the overall strength of the fine wine segment (29%), supported by the continued growth in the participation of loyal and passionate high-spending consumers, the growing interest in fine wines as an investment, as well as the building of private fine wine collections, but also the scarcity of labels, and the premiumization of consumption, including in fine wine, in emerging economies. The second important aspect is the growth in global demand for fine wine (20%), linked to restaurant and bar reassortments, the upswing in consumption and spending sustained by savings accumulated by higher income groups, the general trend to spend more on a bottle as well as to consume more, the worldwide spread of the "wine bug," i.e., the deep intellectual interest in wine culture, higher levels of domestic consumption, and the increased levels of appreciation of good wine, good food, relationships, and shared moments in the months of lockdowns.

The third key point is the increased knowledge and experience of fine wine drinkers (18%), as a result of the growing interest in fine wines globally, as evidenced by the desire for experimentation and adventure, the desire for healthy living and wellness, the growing number of qualified sommeliers, the increasing availability of time devoted to learning at home, as well as a growing interest in wine education worldwide. Another positive factor is the normalization of the global epidemiological situation, and the related economic recovery worldwide (15%), which has brought with it optimism and a hedonistic and joie de vivre climate, positive results with most borders reopened and the resumption of international travel and tourism, revitalization of commercial establishments, such as restaurants and bars, fueled by increased spending from accumulated savings and the global economic recovery, thus including increased spending, consumption and investment in fine wines.

Among the reasons that support a positive outlook, for fine wines, in 2024 is the unprecedented level of interest in fine wines created by a new generation of winemakers (3%), who are taking new paths: artisanal and local wines, from a single vineyard or from lesser-known and emerging regions, including those from the New World, made by younger vignerons; produced from indigenous grape varieties, often fresher and with less alcohol and calories, less use of oak and less tannin, which can be characterized as more fruity, acidic and elegant. Included in this trend are organic, natural, biodynamic and orange wines, produced using transparent, sustainable, environmentally friendly and low-impact ethical farming practices, such as alternative packaging. These wines-especially when marketed with a compelling story-are especially popular among younger drinkers and Millennials, who are finally entering the world of fine wines.

Thus, there are positive effects related to the digitization and innovation of the sector (4%) to be recorded, such as increased penetration of the internet and digital skills, online sales and e-marketing, online tastings with wine makers, increased availability of educational material on the web and social media. The quality of fine wines consumed around the world is also increasing, both due to increased consumer knowledge and for health reasons. Levels of investment in fine wine are growing, whether for speculative reasons, for the creation of private collections or for reasons of long-term capital protection. Finally, positive factors include the continued increase in interest and demand for fine wine in emerging markets-especially China and other Asian countries, as well as technological innovations applied to the sector, such as the rise of Nft.

Reasons that, on the contrary, justify some pessimism, thus supporting the (few) negative outlooks, include the slow post-pandemic economic recovery due to the weakening global economy, lower levels of disposable income in the general population, and fiscal issues decided by governments to address the global epidemiological and macroeconomic situation. Thus, evidently, an unfavorable global geopolitical environment and a difficult macroeconomic environment, associated with an increasing number of military conflicts around the world, with negative global macroeconomic consequences, a growth in global hunger and inter- and intra-continental migration flows. The negative effects of global warming continue, such as the destruction of vineyards and the subsequent reduction in harvests due to wildfires. Finally, rising energy prices worldwide, including oil and gas, resulting in a slowdown or halt in industrial production, especially in Europe.

Focus - Regions with the greatest potential for growth in 2024

For the third year in a row, Champagne is again at the top in the “2023 Gérard Basset Global Fine Wine Report”, with 21% of responses predicting that the region will experience the most significant rise of any wine region globally, mainly due to the huge interest in “Prestige Cuvées”. Just as in 2022, Piedmont and Burgundy are neck and neck with 17% and 14% of responses each, completing the podium. Tuscany (10%), California (9%), Australian wine territories (8%) and Bordeaux (8%) conclude the “team” of regions expected to show solid performance in 2024, with the remaining 13% shared by other wine regions and countries around the world.

Focus - Regions with the worst potential for growth in 2024

Although 8% of professionals indicated Bordeaux as one of the territories destined for growth, on the contrary, 24% of responses indicate Bordeaux itself as the Region with the greatest downward risk compared to any other fine wine-producing region in the world. Behind it, 18% of responses indicate that Burgundy is on a downward trajectory, followed by California (18%) and Australian wine regions (17%). Champagne (7%), Tuscany (6%) and Piedmont (5%) follow in the list of regions likely to experience downward pressure on prices, while the remaining 5% is shared by other wine regions and countries around the world.