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French wine production falls in 2024: Investment implications

Maison Louis Latour wine harvest
  • The 2024 French wine harvest is shaping up to be one of the smallest of the century so far.
  • Burgundy’s 2024 vintage is estimated to be 25% lower than 2023, with scarcity being a key price driver for the region’s wines.
  • Bordeaux is also facing declines, reaching its lowest volume since 2017. 

The 2024 French wine harvest is shaping up to be one of the smallest of the century so far, with regions like Burgundy and Bordeaux hit particularly hard by adverse weather conditions. According to forecasts from France’s Agreste statistics unit, overall national production may decline by up to 18%, with mildew, poor fruit set, and frost reducing output in key regions. 

What are the implications for the secondary market, especially considering the recent market downturn? This article explores how smaller volumes in 2024 could impact prices in Burgundy and Bordeaux, drawing on learnings from past vintages.

Scarcity in Burgundy

The 2024 vintage in Burgundy is being described as one of the most challenging in the past 50 years, according to Florent Latour from Maison Louis Latour. The Bureau Interprofessionnel des Vins de Bourgogne (BIVB) estimates harvest yields to be up to 25% lower than in 2023. The region has faced intense mildew pressure and adverse weather during flowering, resulting in poor fruit set.

Historically, supply constraints in Burgundy have driven price increases in the secondary market, as scarcity heightens demand among collectors. For example, the 2021 vintage, severely impacted by frost, saw a surge in auction prices for marquee producers like Domaine de la Romanée-Conti and Armand Rousseau. The same pattern could play out in 2024, as the prospect of another small vintage heightens the allure of top Burgundian wines.

However, this vintage presents complexities. While the scarcity narrative could support price gains, the current economic downturn might temper buying enthusiasm. Additionally, the challenging growing season could lead to quality variation across producers, making selectivity crucial for those looking to invest. 

Bordeaux market implications

In 2024, Bordeaux is reportedly facing a 10% decline, reaching its lowest volume since 2017. The Conseil Interprofessionnel du Vin de Bordeaux (CIVB) has described the 2024 harvest as “historically low,” with output expected to fall below the already reduced 3.8 million hectoliters of 2023. This is due to a combination of adverse weather conditions, including downy mildew and rain during harvest, as well as a reduction in vineyard areas through a government-supported grubbing-up plan.

Despite the challenges, smaller harvests can still support price stability for Bordeaux’s top-tier wines. In 2024, the scarcity of high-quality offerings might provide an opportunity for investment-grade wines, particularly from classified growths. Investors seeking value could focus on estates with a strong track record of producing excellent wines in challenging years. Yet, the broader market downturn might limit the extent of price recovery, especially for mid-tier labels that lack the same scarcity appeal as Burgundy.

Learning from past vintages

Looking back at smaller harvests like 2017 and 2021 gives an insight into what to expect from 2024. Both years saw production levels dip below 40 million hectolitres due to extreme weather events, leading to temporary price spikes in Burgundy’s secondary market. The 2017 vintage, for instance, saw price rises for top Burgundy wines, driven by fears of limited availability. In 2021, the impact of frost once again drove auction interest, with investors flocking to secure allocations. 

However, the 2024 market environment is different. With inflation and economic uncertainties weighing on consumer confidence, investors may be more selective, focusing on wines that promise both rarity and quality. Burgundy’s high starting prices could limit the scope of further price increases, while Bordeaux’s historically low output might stabilise prices for premium labels without igniting a full-fledged price surge.

The market environment

The 2024 vintage may not replicate the price exuberance of past short harvests, but it represents a moment of adjustment in the wine investment market. For Burgundy and Bordeaux, the interplay between reduced volumes, economic pressures, and strategic opportunities will shape the outlook. The true impact will become clearer once the wines are made, critics taste them, and the release prices are set, providing a more concrete sense of quality and investment potential.

WineCap’s independent market analysis showcases the value of portfolio diversification and the stability offered by investing in wine. Speak to one of our wine investment experts and start building your portfolio. Schedule your free consultation today.

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2023 harvest forecasts for France and Italy: a balancing act

Harvest
  • France’s 2023 wine harvest projects between 44-47 million hectolitres, benefiting from potentially strong yields in Champagne and Burgundy.
  • Italy anticipates up to 14% reduction in its 2023 harvest due to extreme weather, marking it among its smallest harvests.
  • Historical trends showcase climatic vulnerabilities, emphasising the need for sustainable viticulture practices.

As harvest time approaches, we take a look at forecasts for the 2023 vintage in France and Italy. While France appears to be set for a stable year – in line with the five-year average, Italy’s harvest might shrink as a result of extreme weather, as climate change continues to leave its mark.

French wine regions face diverse conditions

According to the French agriculture ministry, France’s wine harvest in 2023 looks promising, with estimates suggesting a national production between 44 million and 47 million hectolitres. This figure nudges slightly ahead of the previous year’s 45.4 million hectolitres. One reason for optimism is the performance in regions like Champagne and Burgundy, which is expected to offset challenges in Bordeaux.

Indeed, Bordeaux has not had it easy. Consecutive thunderstorms, high temperatures, and downy mildew have plagued the region. Notably, Gironde’s chamber of agriculture reported that a whopping 90% of vines have been affected by downy mildew. Languedoc and Roussillon have also been suffering from persistent drought.

Meanwhile, Champagne and Burgundy are set for an above-average harvest. Champagne has successfully averted frost and hail damage and diseases have been contained. Similarly, Burgundy looks poised for grape production higher than the five-year average. The situation in neighbouring Beaujolais is also looking better than last year.

If projections hold, France may place as Europe’s largest wine producer in 2023, especially given the challenging outlook for Italy.

Italy’s climate woes

Italy is staring at a potentially reduced harvest in 2023. From searing heatwaves to devastating floods, the nation’s vintners have confronted multiple challenges. Extreme weather events could result in a harvest that is up to 14% smaller than in 2022. If this forecast proves accurate, 2023 could rank with years like 1948, 2007, and 2017 as one of Italy’s smallest harvests on record.

However, while the national outlook seems daunting, the situation varies by region. The north, including areas like Piedmont, Lombardy, and Veneto, has remained relatively stable despite recent fierce hailstorms. By contrast, southern and central Italy might see significant drops in production, with Sicily in particularly struggling with wildfires, heat, and mildew. Still, the Assovini Sicilia wine association noted that grape quality remains intact for 2023.

Historical context

France and Italy have witnessed harvest highs and lows over the decades. Historically, France’s most significant harvest was in 2004 with a record 58.3 million hectolitres. In contrast, 2017 saw a decline of almost 20% due to weather adversities.

Italy’s bumper harvest year was 1982, with a record production of 65 million hectolitres. The country’s most challenging years have been spaced apart, with significant lows in 1948, 2007, and potentially 2023.

In conclusion, the 2023 harvest projections for France and Italy offer a revealing snapshot into the challenges and opportunities presented by the ever-shifting climate. While France gears up for a potentially favorable yield, owing largely to robust performances in regions like Champagne and Burgundy, Italy grapples with the stark realities of climate change, which threatens to render 2023 one of its leanest harvests. These trends not only highlight the adaptability of the wine industry but also underscore the urgent need for sustainable practices and proactive measures to mitigate the impacts of adverse weather patterns on viticulture. As the historical data indicates, while wine-producing regions have faced fluctuations in the past, the growing unpredictability of climate patterns demands heightened vigilance and innovation in the realm of winemaking.

WineCap’s independent market analysis showcases the value of portfolio diversification and the stability offered by investing in wine. Speak to one of our wine investment experts and start building your portfolio. Schedule your free consultation today.

 

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The 2022 Burgundy Wines’ Real Potential

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The Burgundy Wine Board (BIVB) announced that the wines from the 2022 Burgundy harvest have real ‘potential’. This vintage will be dedicated to Louis Fabrice Latour, the former president of the trade association, who passed away earlier this month.

Commenting on the recent harvest, the BIVB said that it had been ‘a pleasant surprise’ and that it was ‘a vintage of the kind we were all hoping for.’ Despite cold temperatures and frosts, the board is happy with both the quantity of grapes that will go into this year’s wines as well as their quality.

The 2022 Burgundy Vintage

The growing season began at the start of April having experienced a milder winter with less rain than usual. Temperatures dropped mid-April and two snaps of frost followed. Fortunately, budburst hadn’t taken place completely and buds were not fully exposed to the frosts, although some areas did experience small amounts of damage. 

Spring arrived and brought excellent conditions with it. Flowering took place two weeks earlier than usual which led to many commentators suggesting that the 2022 vintage could be one of the earliest ever. Thunderstorms in late June refreshed the vines but also brought some hailstorms which caused ‘significant damage’ in some areas.

Contrary to the belief that the harvest would start earlier than normal, pickers started harvesting Chardonnay on the 20th of August which is in line with previous years. It was a prolonged harvest due to the good weather which helped produce optimally-ripe grapes. 

The board agreed that this year’s grapes are ‘balanced with controlled degrees of alcohol and good acidity.’ It found that the compounds in the red grapes were ‘excellent’ which are needed for long-term ageing. The BIVB also commented that the musts of the whites and reds were ‘highly aromatic’ which is another positive sign. 

This year’s harvest is what the Burgundians had hoped for, as the 2021 vintage suffered very low yields and in turn triggered higher prices. However, 2022’s yields were still down on average.

Find out more about our initial thoughts on the Burgundy 2022 vintage in this article.

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Bordeaux’s ‘Earliest Ever’ Harvest

Bordeaux vineyard at sunrise

Producers in Bordeaux welcomed the rain and cooler temperatures that arrived at the start of August with open arms. After six weeks of no rain, and with a prolonged heatwave, July of 2022 was announced as the driest on record since 1959.

The first white grapes of one of the key varietals that makes up the Bordeaux Blanc blend – Sauvignon Blanc – began arriving at wineries in the communes of Entre deux Mers, Graves and Pessac-Léognan from the 16th of August. The 2003 harvest that was previously considered very early, began on the 18th of August, making 2022 now the earliest ever vintage.       

The president of the Pessac-Léognan syndicate, Jacques Lurton, commented on this ‘earliest ever harvest,’ to French press agency AFP. He said that it was caused by ‘the exceptional conditions of the year that have speeded up ripening. Right now the aromatics are high in Sauvignon Blanc, making it the perfect moment to start bringing them in’.

Yields are expected to come in slightly under the 50-year average and are predicted to be between 13-21% higher than the 2021 harvest that was severely affected by frost. While there was a summer drought this year, both flowering and fruit set took place at the perfect time which meant that yields weren’t impacted too much.

The recent rain, up to 20mm in the majority of communes, has helped refresh soils and vines, as well as increasing the size of the grapes which are reportedly still some 30% smaller than usual.  

However, Bordeaux hasn’t been the only French wine region to have begun harvesting grapes early this year. The Rhône began on the 22nd of August: eight days earlier than last year. Roussillon also started picking grapes as early as the 3rd of August. Producers in both regions have expressed that, while the production levels may be down on average, they’re hopeful that great quality wines will be made.

Read more about the small but exceptional Port vintage expected in the Douro here.