Exploring the Downward Trend in Global Wine Consumption

Shrinking Wine Consumption

In 2023, worldwide wine consumption amounted to 221 million hectoliters (Mhl), showing a 10% drop from 2022's 231 Mhl (Figure 1). According to a wine economist, one reason for the recent decline is the increased health consciousness among consumers during the COVID-19 pandemic, which led to reduced alcohol intake. The consumption of wine, beer, and spirits decreased during this period, supporting this observation.

Figure 1. Global Wine Production and Consumption from 2013 to 2023

Analyzing the global wine consumption data per country, it is evident that consumption has generally declined since 2020, when COVID-19 became widespread. in the top five wine-consuming countries — the United States (US), France, Italy, the United Kingdom (UK), and Germany — ,there was a decline during the pandemic even in the two countries (the US and the UK) that have shown a consistent upward trend in wine consumption over the past 25 years, as shown in Figures 2 and 3.

Figure 2. Increasing Trend in Wine Consumption in the US and the UK from 1999 to 2023

Figure 3. Decreasing or Stable Trend in Wine Consumption in France, Italy, and Germany from 1999 to 2023

However, the recent decline in wine consumption could not be attributed solely to lifestyle changes due to COVID-19. Figure 1 indicates that the decrease in wine consumption began in 2017, before COVID-19. Moreover, a notable decrease in global wine production coincided with the drop in wine consumption post-pandemic. This implies that factors beyond lifestyle changes might influence wine consumption and that wine production could also impact consumption levels.

Relationship between Wine Production and Consumption

The "Analysis of Wine Consumer Behavior (2019)" research paper involved 1,500 wine consumers to explore the impact of variables like gender, age, education level, and income on wine consumption. The study found that gender and education level significantly impact wine consumption, with men and those with higher education levels consuming more wine. Although the study's sample size of 1,500 is not representative of all global consumers, it provides insight into the possibility that higher education levels could lead to increased wine consumption and could be used in expecting a future consumption trend.

As previously noted, wine consumption could be influenced not only by consumer lifestyles or preferences but also by production levels. Typically, in economics, an increase in demand prompts suppliers to raise supply to meet it, while an increase in supply tends to reduce prices, thus stimulating further demand. To verify this, Tridge examined the correlation between each country's wine consumption and global production for the top eight wine-consuming countries in 2023 (Figure 4).

Figure 4. Correlation Coefficient between Global Wine Production and Consumption by Country

The data used includes each country's wine consumption and global wine production from 1999 to 2023, covering 25 years. Global production data was chosen over country-specific data because wine production is a global commodity traded internationally rather than solely consumed domestically.

In Figure 4, the key points to note are the coefficients and p-values. The coefficient indicates the relationship between global wine production and each country's wine consumption; the closer it is to 1 or -1, the stronger the relationship. A value closer to 1 indicates a significant influence between the two. The p-value indicates whether the coefficient is statistically significant; a p-value higher than 0.05 means no statistical significance, while a p-value lower than 0.05 indicates statistical significance. Therefore, the coefficient data is meaningful only if the p-value is below 0.05.

The calculated values show that the coefficients are generally low for each country, indicating a relatively weak relationship between global wine production and each country's consumption. More importantly, all p-values are above 0.05, indicating no statistical significance.

Conclusion

The 2019 study mentioned above illustrated that gender and education level can impact wine consumption with statistical significance, although it has a limitation that the sample size may not have been sufficiently large to represent global consumers accurately.

Tridge explored the relationship between the simultaneous decline in consumption and production post-COVID-19 to determine whether production data could predict consumer consumption trends. The results showed that the correlation coefficients between global wine production and each country's consumption were not high, and more importantly, the statistical significance could not be established.

Additionally, Tridge conducted a regression analysis to examine the direct correlation between global grape production and wine production. However, this analysis also did not yield significant results. Wine suppliers should carefully approach markets like the US, where wine consumption has consistently increased (CAGR 1.89% during 25 years). Tridge recommends that wine suppliers consider factors such as education levels in each country in their market strategies.