Hey, wine drinkers, you better get stocked up on your favorite bottles — it's likely there is going to be a major wine shortage around the world in the very near future. Because of extreme weather in Europe and the devastating California wildfires, global production is expected to drop 8.2 percent in 2018 as compared with 2016. And not only will there be less wine in the coming year, but prices are already going up.
"We still foresee a dramatic decline in wine availability going into 2018," Stephen Rannekleiv, a global beverages strategist at Rabobank, told CNNMoney. "We expect the decline [in consumption] to be felt most tangibly in the lower-priced tiers."
Combined, the European countries of Spain, Italy and France produce more than half the world's wine, and this year weather conditions in those regions were not favorable for grapes. According to data from the Global Economic Vitiviniculture, production levels were at an all-time low in Italy, France, Spain and Germany. Early in the spring, vineyards in certain parts of Europe were hit with heavy hailstorms and frosts, while other parts of the continent experienced unusually warm weather and droughts later in the summer.
CNNMoney explains that unusually warm weather causes grapes to ripen earlier than usual, which causes the fruit to end up smaller than average. "It has not been uncommon for one of these three producers [Italy, Spain and France] to have an off year, but rarely have we seen such poor harvests for all three simultaneously," added Rannekleiv.
"Everyone is harvesting early this year, which usually leads to lower yield," Richard Halstead, co-founder of Wine Intelligence, a market research firm and consultancy, told the website. And a lower yield results in price increases, with some varieties going up by as much as 10 percent. "The rise in Italian and Spanish bulk wine prices is particularly noticeable, and it started as early as May, when the first threats to production materialized," Rannekleiv explained.
What happened in the United States, the fourth largest producer in the world, has not helped to make the situation any better: California, home of many internationally acclaimed vineyards, can't really help to make up the shortages, and the situation is made much more dire because of the catastrophic wildfires wreaking havoc on Northern California's wine country in October. Though 90 percent of the grapes had already been harvested in Northern California when the devastating fires occurred, it is quite possible the remaining grapes could suffer smoke damage.
And the news gets even more dismal. While it's likely you will still be able to get your favorite Napa Valley or Sonoma pinot noir next year, it is possible that future crops will be negatively impacted by the disaster. Explains Michael Kaiser, vice president of WineAmerica: "The real danger is the potential loss of damage to the vines for future years. We are a long way from knowing what that could mean for wineries."
Additionally, 2016 wasn't a great year for wine either, with global warming hitting the industry hard. South American countries like Argentina, Chile and Brazil experienced a 21 to 50 percent decrease in production due to a "super El Nino" pattern.
The good news is that many global producers prepare for disastrous years like this by maintaining a surplus (in other words, they make more wine than is consumed every year). CNN reports that the International Organisation of Vine and Wine estimates the surplus was around 2 billion liters in 2016.
But because prices of wine have historically increased during shortages, you might want to squirrel away a few cases of your go-to vinos as soon as possible, just to be safe. Having a personal surplus of wine never hurt anyone!
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What Do YOU Think?
Are you surprised that weather conditions can have such a large negative impact on the wine industry? Will you pay more money for your favorite wines, or will you switch to a less expensive kind if the price increases? Do you think 2018 will follow the same trend? Let us your thoughts in the comments section!