French wines facing challenges to growth, new report warns

The future growth of French wine is facing challenges, a new survey by Sopexa, presented at Wine Paris this week, has revealed, with many in the international trade claiming it has lost momentum in key export markets, notably China and the USA.

The Pont de pierre or Stone Bridge in Bordeaux, France. Composite photo

While France remained the top country of origin for wine lists, ahead of Italy and Spain, the outlook for future growth was challenging, the survey found, compared to the potential for countries including Italy, Australia and Chile.

Although France remained the top all round performer in terms of reputation and French wines have lost momentum in Belgium, China, Hong Kong and the US, it said, with Australia and to a lesser extent Chile and Italy, set to be the big winner in the lucrative China market.

Rob Bevis, senior business development director Greater China at East Meets West Fine Wines, was quoted as saying this had largely come of the back of a concerted effort by the Australian government to support growth in China, facilitated by trade agreements that slashed duties for Australian wine and a developed marketing and communications strategy. Growth was also likely to be boosted by the overall strength of branded Australian wines in a country where consumers looked to brands for reassurance, he noted.

The survey noted that Italian wines were clearly benefiting from the psychological impact of the announced increase in customs duty on French wines in the US, which was announced last October. Meanwhile the likely beneficiaries of Brexit are predominantly countries in the Southern hemisphere, such as Chile, Australia and Argentina, respondents agreed.

Regional French growth

Drilling down, the survey anticipated growth for four of France’s red wine regions, which dominated the red list – namely Bordeaux, Languedoc, Bourgogne and the Rhône, on the back of popularity in Asia and Europe. The Languedoc is set to perform well in Germany, Belgium and Japan, while the Loire was seen to have a positive outlook in the USA for white wine, even if growth potential has fallen slightly compared to previous years, with Marlborough set to continue to dominate white wines.

Provence rose was also seen as a strong area for growth, with 67% of industry professionals putting it as the top performers for rosé, followed by the Languedoc (particularly in the UK) and Italy – although growth is thought to have peaked in the US market.

Prosecco continued to dominate the sparkling sector, although growth is anticipated for Champagne in China and Hong Kong, Cava in Japan and the US, and Cremant in Germany and the UK, while English sparkling wines is anticipated to see “healthy growth” in the UK and the US in the next two years.

The report surveyed 984 wholesalers, importers and retailers, the survey covers seven countries, the UK, Germany, Belgium, China, Hong Kong, Japan and the US.

Organic and biodynamic wines are also predicted to do well as part of a wider trend around food, climate change, the environment and globalization, with around 42% of professionals surveyed, calling it the ‘buzz category’ for the next two years, particularly in the UK and US, well ahead of regional wines (28%).