The wine crisis is getting worse! Winemakers are launching a cry for help (here's why)
In the wine world, economic cycles fluctuate like the seasons. We are currently witnessing a paradoxical situation: despite a buoyant market, the wine crisis persists and calls for moderation remain unheeded. This phenomenon, observed in several French wine regions, deserves in-depth analysis.
The deep roots of the wine crisis
The crisis currently shaking the wine sector did not arise overnight. It has its roots in a combination of complex factors that have accumulated over the years. Chronic overproduction is one of the major problems facing many appellations.
In the 2000s, a global shortage of quality red wines led to a significant expansion of planted areas. This was due to the massive uprooting of American vines grafted onto the AXR1 rootstock, which was susceptible to phylloxera. In response, the Bordeaux vineyard obtained no less than 25,000 hectares of new planting rights . On the other hand, by 2008, the situation had reversed, requiring uprooting to balance supply and demand.
This experience reminds us that long-term management of plantations is vital to maintain the balance of the wine market. Unfortunately, history seems to be repeating itself, as evidenced by the current situation in the Cognac region.
The euphoria of the buoyant market: a fool's errand
When the market is booming, it becomes extremely difficult to temper the enthusiasm of winemakers. We see this reality regularly in our travels through the world's vineyards. The lure of immediate profit can often overshadow the need for long-term planning.
Here are some reasons that explain this difficulty in reasoning in good times:
- Excessive optimism about the duration of the boom period
- Financial pressure to quickly recoup investments
- Fear of missing out on a growth opportunity
- Lack of a global and long-term vision of the market
These factors contribute to creating a vicious circle where uncontrolled expansion inevitably leads to overproduction . This phenomenon is not new and has been observed in many wine regions throughout history.
The case of Cognac: from euphoria to overproduction
The recent example of the Cognac region perfectly illustrates this phenomenon. For years, the cognac market has experienced sustained growth, encouraging producers to increase their production areas. The large trading houses, with their influence, have supported requests for new planting rights from the administration.
However, this expansion has proven excessive. Today, the region is facing alarming overproduction , even though not all the vines from these new rights have yet entered production. This situation highlights the dangers of uncontrolled growth, even in a supposedly stable market like the spirits market.
The following table illustrates the evolution of Cognac production in recent years:
| Year | Production (in hectoliters of pure alcohol) | Evolution compared to the previous year |
|---|---|---|
| 2020 | 750,000 | - |
| 2021 | 830,000 | +10.7% |
| 2022 | 890,000 | +7.2% |
| 2023 | 950,000 | +6.7% |
| 2024 | 1,000,000 | +5.3% |
Towards more rational management of wine production
Faced with these recurring challenges, it is becoming imperative to rethink our approach to wine management. As wine professionals, we must promote a long-term vision that takes into account the natural cycles of the market. It is crucial to raise awareness among winegrowers of the risks of overproduction , even in times of prosperity.
Concrete measures can be considered to mitigate these boom-bust cycles:
- Implementation of stricter planting quotas
- Creation of interprofessional reserves to regulate supply
- Diversification of production to reduce dependence on a single market
- Investment in research and development of new products
It is also crucial to consider the social impact of these crises. As our recent article on the threat to 440,000 jobs in the wine sector highlights, the consequences of these fluctuations go far beyond production figures.
As wine enthusiasts and professionals, we have a responsibility to promote a sustainable approach to viticulture. Only by adopting a long-term vision and resisting the sirens of uncontrolled expansion can we ensure the sustainability and quality of our vineyards for future generations.
