The global wine industry is grappling with an unprecedented downturn, marked by the steepest decline in consumption in four years and the lowest production levels in over six decades, according to a report by Elara Capital. In 2024, global wine consumption fell by 3.6% year-on-year to 214 million hectolitres (mhl), while production dropped to just 226 mhl—a 4.8% decline from the previous year and the lowest output since the 1960s. This simultaneous fall in both demand and supply underscores a structural malaise, as major markets retreat and climate-related challenges disrupt production.
China, once the most promising growth market for global wineries, has seen its wine consumption contract at a staggering compound annual rate of 18.2% since 2019, falling from 15.0 mhl to 5.5 mhl in just five years. Its share of global wine consumption has collapsed from 13% to a mere 5%. Persistent COVID-19 aftershocks, a sluggish real estate market, and shifting preferences toward beer and spirits have all contributed to the erosion.
Meanwhile, mature markets such as the United States, France, Italy, Germany, and the United Kingdom, which collectively account for over half of the world’s wine consumption, also registered a 3.3% drop in volumes. Even demographically attractive regions like Brazil were not spared, with consumption falling 11.4% year-on-year.
On the supply side, the challenges are equally stark. Vineyard areas have been shrinking globally at a 1% CAGR over the past five years. Production in key wine-producing nations has taken a hit due to extreme weather patterns and crop diseases. France and the United States, for instance, witnessed year-on-year production declines of 23.5% and 17.3%, respectively. The top five wine-producing nations, which account for 63% of global output, have together recorded a 2.6% CAGR decline in production since 2019.
Interestingly, the narrowing gap between supply and demand—just 11.6 mhl in 2024, the second-lowest in the past two decades—has offered some short-term stability in pricing. However, this balance is fragile. If demand recovers while production remains constrained, prices could surge further, exacerbating existing inflationary pressures.
Export volumes have also suffered. Over the past five years, global trade volumes have declined nearly 10%, despite the average export price rising at a 6.8% CAGR. In 2024, global wine exports stood at €35.9 billion, registering a marginal decline of 0.3% year-on-year.
In contrast to global trends, India has quietly expanded its footprint in viticulture. The country now holds a 2.6% share of global vineyard area, according to the International Organisation of Vine and Wine (OIV), thanks to a 4.1% CAGR in vineyard expansion over the last five years, against a global contraction of 0.8%. Domestic players like Sula Vineyards, which earns 99% of its revenue from the Indian market, are expected to benefit from a projected 15% industry volume growth in the near term. But such growth should be viewed in context: wine accounts for less than 1% of India’s overall alcohol consumption. Without bold adaptation strategies and a rethinking of how and where wine is produced and consumed, the sector risks losing its place at the world’s table.