Global wine shortage replaces glut
A report out this week on the world's wine supply probably isn't drawing “cheers” from lovers of the fabulously popular fruity booze.
Global demand exceeded supply by 300 million cases in 2012, and the future could be bleaker, a Morgan Stanley Research report contends. The study blames the shortfall on increased demand — everyone will drink to that, apparently — bad weather and fewer vineyards.
“Data suggests there may be insufficient supply to meet demand in coming years, as current vintages are released,” the report says.
World production peaked in 2004, when the surplus reached 600 million cases. But the latest numbers represent the greatest shortfall in four decades.
Americans drink about 12 percent of the world's wine, and per capita consumption is booming. China, the world's fifth-largest importer, has quadrupled its consumption in the past five years.
Production capacity is down 10 percent in Europe from 2005, with big producer nations such as France, Italy and Spain hardest-hit. Add to that a poor wine weather year in 2012, and you get a wine shortage.
Not all wineys are whining. The shortage is good news for some areas still awash in the stuff. The lack of production elsewhere is opening the door for wineries in Washington state to enter thirsty markets such as China. Woodinville's Chateau Ste. Michelle is the biggest winery in Washington and is hard pressed to meet the demand, king5.com in Seattle reports.
“We're making it as fast as we can grow the grapes,” CEO Ted Baseler told the website. “Right now, we have about 50,000 acres in the state. I can foresee that we could have as much as 150,000 or more.”
Doug Caskey, executive director of the Colorado Wine Industry Develment Board, told KUSA-TV in Denver that the shortage is most likely to affect cheaper wines.
And not every expert is buying the dire wine predictions.
“I can't say we've felt any shortage,” wine buyer Mulan Chan-Randel told the San Francisco Chronicle. Chan Randel buys Rhone varietals and wines from southern France for K&L Wine Merchants in San Francisco.
“We may not be having as many closeout specials as we had during the recession, but I don't see anyone ratcheting up the prices, either,” Chan-Randel said. “We definitely felt an increase in consumption, especially with Millennials. But we've been able to keep up.”