Transcript:
Hello, bonjour, and welcome to your new Bonner Private Wines video. Today for our first video of the New year, I want to discuss interesting trends that are taking place in the wine world. Most commonly here we discuss general or academic wine knowledge. The grapes, regions, winemaking, etc.. But every once in a while I like to talk with you about the wine industry as well, to give you an insider's perspective, and the start of 2024 seems like a good opportunity to do so.
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I hope you had a wonderful end of year celebrations in 2023 and I wish you all the best for the New year health, friendship, love. And of course, there will be some good wines too, as your are a club member yourself. I’ll hint on your upcoming wine collections as well here. Let's go. Following and understanding wine trends globally or even at the level of the entire United States is actually quite complicated.
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You might see headlines here and there, an article summarizing the wine trends for the new year is just a few key points. This wine is trendy, that wine is trendy, but it's much more complicated than that because the wine industry is so fragmented. Imagine a single French or Italian wine region like Bordeaux or the Rhone Valley, the Loire Valley, or the Italian Piedmont or Tuscany, just to name a few.
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Each of these count with thousands of individual producers. California also has thousands of wineries as well, and many more wine growers. Oregon has many hundreds as well. So aggregating all of these data to just extract two, three, four key trends would truthfully be virtually impossible. You can't just summarize it that way and no organization is actually capable of doing it reliably.
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But I have worked in the wine industry for over 20 years, and although I'm more of a winemaker than a wine trade expert, wine trade expert, here's what I could gather from following all the wine news and talking to wine professionals. Like pretty much all industries, the past few years have shaken the wine world significantly as well. The pandemic itself wasn't too much of a blow for the wine industry as people ordered online and looked for escapism, which often included some interesting foods and drinks to have at home with some delicious wines, of course.
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But post-pandemic home consumption has fallen recently. Although people do drink more in restaurants and bars as we've been able to attend those places again. The rising cost of energy inflation rates and interest rates are affecting growers and wineries just like everyone else. And overall, the cost of producing those delicious bottles is much higher now. So wine prices tend to go up and this trend will continue in 2024, unfortunately.
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Different market segments have responded differently to that trend, however. To counter the increase in production costs, cheaper wine producers and the large brands that you find in supermarkets, especially in the US, have consolidated to get more economy of scale. As a few examples, in the first half of 2023, the industry saw not less than 11 major deals.
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The second half brought Duckhorn’s 400 million dollar purchase of Sonoma-Cutrer, Treasury Wine Estates, a massive company, has made the acquisition of Daou for up to 1 billion, and California's giant Gallo got even bigger buying Rombauer and Massican brands. That's how some American producers can and will satisfy demand for affordable wines, consolidating, getting bigger. Smaller producers on the other hand have responded differently, mainly by increasing the quality of their products.
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The so-called premiumization of wine is an ongoing trend that will continue in 2024. Basically, every small wine producer has to find a different differentiating feature for their products. So here are a few more specific trends that we've noticed in 2023 that are bound to drive the markets and our wine drinking habits in 2024, More and more producers embrace eco friendly practices, as many wine consumers are prepared to pay a little more for a healthier drink that respects the environment.
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So sustainable viticulture, regenerative viticulture, organic, biodynamic, are all terms that you will continue to see more and more printed on wine labels. Although it somewhat contradicts, at least in appearance, the eco friendliness, more and more wineries use machines to harvest rather than hand picking, as labor shortage has also been real in many countries of Europe and even in the United States: essentially finding hordes, hundreds and hundreds and thousands of pickers during harvest season is increasingly difficult. It's a reality.
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For specific wine styles that are on the rise, I have noted a few as well. Yes, drinking rose all year is now a thing not restricted to summer anymore. People drink rosé all year. The sparkling wines continue to grow as well in popularity, which benefits more the alternatives to French champagne as consumers look for a cheaper entry point.
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So Italian prosecco, Spanish cava, for example, natural sparkling wines, also known as pet-nats from the French name petillant natural. So pet-nats or natural sparklings, sparkling that are made with really traditional techniques and hardly any chemicals. Those are really really hot to the all the hype in coastal cities and trendy wine bars in particular.
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So are orange wines. We've talked about orange wine before. If you were wondering what this is, some of those very niche products are definitely trending at the moment. Obscure grapes keep being brought up also to the forefront as producers bottle them on their own rather than blending them in their old traditional grape blends that they used to produce.
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That's particularly true for Italy because they have so many obscure grapes over the country. So more and more wine drinkers discover those new old grapes that are new to the consumer all around because you can find those variety of wines bottled on their own. Another way for producers to differentiate themselves and add value to their crops, the Portuguese Reds in particular, because they're so tasty and affordable at the same time, also made with unfamiliar grapes, are really new to the global market.
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Those are really trending at the moment. So are northern Italian red wines for some still whites. Well, South African Chenin Blanc is on the rise. In particular, it's traditional and an old classic style. If you know your global wines. But the world is waking up to it at the moment, it seems, giving it a renaissance. South African Chenin Blanc.
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Nonalcoholic wine, so the low alcohol wines is a segment that will also continue growing as it's conveniently aimed at the growing health conscious demographics. And those are essentially the main key drivers of the different trends that have taken place in 2023. And that will continue in 2024. You see, summarizing wine is not easy. I've tried to do my best here as we're talking about tens of thousands of industry players, big and small, dozens of different wine countries, hundreds of millions of consumers globally, each with their with their different ways, different budgets, different aspirations when they buy wine.
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And combined this with all the macro economic movements, the daily impact the industry as well is very difficult and the wine industry is very exposed to macro economics as well. Making wine takes quite a bit of energy to move the tractors in the vineyards and operate a winery for shipping heavy bottles all around the world as well. It's a capital intensive industry that employs a lot of people, that climate change is obviously a concern.
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So wine is basically deeply rooted in our landscapes, in our lives as well. You certainly feel it if you live in a wine country, especially like here in France or Italy, but even in California, Oregon, wine is everywhere. You got vineyards in many parts of the world. So it is impacted by every new change in society and of hope.
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I've somewhat demonstrated it here and giving you a few takeaway points as well for the trends of 2024. Be brave if you have to go back to work in the New Year in the coming few days, but enjoy nonetheless the beginning of 2024 and may your dreams become reality this year. I will see you soon in the wonderful world of wine.
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All year long we're going to be exploring more wine countries in delicious bottles. We're going to go to Argentina as it's a tradition for us with our next wine collection from the club. And after this, we're going to be exploring Spain with delicious wines. So get ready for those as well. I will see you soon. Cheers.
