Bordeaux struggles

With red wine consumption dropping, the region’s producers face tough challenges.

With global consumption decreasing in volume terms, according to IWSR Drinks Market Analysis, French wine is a category currently facing challenges, particularly those from the region of Bordeaux. Global consumption of Bordeaux wine decreased at a CAGR of 4% between 2016 and 2021, with more than 50% of 2021 volumes consumed domestically in France.

Why Bordeaux?

Selling 559 million bottles in 2021, for a value of €4bn according to Vins de Bordeaux, Bordeaux wine is highly sought after, with 18 bottles from the region sold every second around the world. But why are these wines so popular? According to Wine Intelligence 2019, “Bordeaux is the wine region that best meets the key expectations of French consumers,” as they are “very good quality wines” that “inspire confidence” and “people are proud to taste”.

Looking broadly, Bordeaux makes a “huge volume of inexpensive red wine using standard winemaking processes, which include mechanical harvesting and ageing the wine for a short time in stainless tanks” (WSET report ‘What makes high-quality Bordeaux wine?’).

To make the wine, many factors come into play, such as geographical positioning, weather and soil, with the best wines coming from years with optimal weather conditions. This “entails gentle heat throughout the growing season, sufficient rainfall, and fine, relatively dry and warm autumns that allow for steady and complete ripening”, according to the WSET report.

Bordeaux sits in the south west of France at around 45º latitude, with suitable conditions for a vineyard being between 30º and 50º. This places the vineyards closer to the equator, with the warmer conditions meaning they require cooling from sea breezes or altitude to create optimal acidity in the grapes. Bordeaux is classed as having a moderate maritime climate due to its close proximity to the Atlantic Ocean, with the Garonne and the Dordogne rivers, which merge into the Gironde estuary, dividing the region into the Left Bank area, which includes the Médoc and Graves, and the Right Bank area, which includes the Libournais and Entre-Deux-Mers.

Current challenges

However, despite this the region is currently struggling with declining exports, falling consumption and red tape, as winemakers are also waiting on a government decision to let them uproot 9% of vines. With its past popularity, Bordeaux winemakers now have more vines than needed due to these difficulties, meaning wine is being sold cheaply to generate some cash as they struggle in the current climate. However, this still isn’t enough as Christophe Chateau, director of communication at the Conseil Interprofessionnel du Vin de Bordeaux (CIVB), says: “Consumption of red wine in the entry-level, the cheapest red wine, has no more market because people are drinking less but better quality, more expensive wine. Our red wine, from classified growers, is doing very well. Last year it had a €1.3bn turnover, which is the biggest ever made. In the UK in 2022, volume Bordeaux sales have decreased 11% when value has increased 9%, so that shows people are drinking less but better quality.”

Additionally, those facing retirement aren’t seeing demand for their vineyards, making leaving the trade all the more difficult. However, they can’t simply abandon the vines either as this causes problems because pests and disease can spread to other vineyards, so they are forced to cultivate or grub up the vineyard, which costs €2,000 per hectare. An impossible sum for wineries that are already struggling.

Chateau adds: “Countries from southern Europe are decreasing in consumption of wine and increasing in beer and spirits; northern Europe is decreasing in beer and increasing in spirits and wine; and eastern Europe is decreasing in spirits and increasing in beer and wine. France is the biggest market for Bordeaux, it’s 55% of our volume and this market is getting smaller and smaller every year.

“Consumption of red is decreasing faster than white, rosé and sparkling, and this is because of food change. Traditional meals that we used to have included starters, main dish, cheese and dessert and were two times a day, seven days a week. Now this may be two or three times a week because people are eating fast food or having an aperitif and the consumption of meat is also decreasing. We drink more red wine when we are eating meat, so consumption of red wine is decreasing as the consumption of meat is decreasing, so this decrease is slow but will continue long term.

“On the other hand, our other big market is China, and over the past few years because of Covid and the economic crisis it has also decreased. So nowadays we are producing more wine than we are selling. The point is to get an equilibrium between production and sales.”

As a result, a protest was called by a winegrowers’ union in early December last year, supported by the CIVB, which wants to see a €10,000 subsidy from the government per hectare to uproot vines, to cover the grubbing up, physical work and reconversion costs.

“We are to reduce our production by pulling out vines, maybe 8-10% of our production, in order to get the equilibrium between production and demand. We also have to try to find new markets in order to make sales, regarding what we are losing in France. We are looking at Southeast Asia which is increasing, Vietnam, Thailand, South Korea and Taiwan are doing very well. We are also looking at South America, Brazil is doing quite well and also looking at Africa, which we think is going to be a big market for Bordeaux in the next 10 or 20 years,” Chateau continues.

The uprooting may affect around 9,000 of the 100,000ha in the Bordeaux-regulated region, but the challenges faced by smaller, less well-known wineries and vineyards are not felt by top producers in the region that sell more expensive wines, as they remain unaffected.