With an overall 2016 harvest expected to be at least 12% down on average, and up to 40% or more in some areas, it is not going to be as easy to get your hands on affordable, value for money French wines in the year ahead as normal. Richard Siddle looks at the 2016 figures in more depth and plots a way forward for UK wine buyers.
Consumer demand for French wine is as high as ever. The challenge for the trade is to make sure it has enough to keep them happy.
News last week that virtually all (94%) buyers surveyed across importers, distributors, wholesalers and distributors around the world see France as a must stock wine country did not come as a big surprise such is the esteem that it has in the global wine industry. But it will also come to some comfort for so many French grape growers, wineries and producers that have struggled with one of the most difficult French harvest in years.
The difficulty for France in 2016 is that it is not just one region that has taken a hit from the weather, but the majority of its major growing regions have been battered at some stage or another by frosts, storms, floods, and rains.
These have not only collectively damaged the actual fruit and quality of the grapes, but the persistent cold weather that has come with it has seriously limited flowering and maturing times for grapes right across the country. Followed by a heatwave, with Bordeaux seeing its hottest August on record.
The concern, however, for French producers, and buyers alike, going in to 2017 is that on reading this report, released by Sopexa the French communications and marketing agency for food and drink, is whether they will be enough wine to go around to meet all the demand from around the world. Never mind the UK.
“All that was missing was a plague of frogs,” was how Antoine Robert, son of Jean-Jacques and owner of organic winery, Domaine Robert-Denogent in Burgundy, which lost up to three quarters of its crop from frost and bad weather. “It’s a catastrophe, the worst harvest for 30 or 40 years,” added Jean-Jacques.
“Every grape counts,” is how Burgundy’s generic body, the BIVB, described this year’s harvest. But it could easily have been talking about most other regions in the country.
At least 12% down
With the final grapes still being picked we will have to wait for the final overall tally for the 2016 French vintage. But the latest estimates, released at the end of October by International Organisation of Vine and Wine (OIV), put total French wine production down 12% than in 2015.
It puts total production at 41.9m hectolitres (hl), down from last year’s 47.8m hl. Figures released in August, from France’s agriculture ministry’s Agreste data service, showed the 2016 harvest was also 7% down on the 2011-2015 average of 46.1m hl. But it is the regional breakdowns that are most worrying for buyers of French wine around the world. The Agreste figures show that the harvest is expected to be:
– Up to third lower in the Loire overall with some regions facing losses of up to 80%.
– Up to 27% less in Burgundy, with some growers facing no crops at all after disastrous frost and storm damage, the worst in the region since 1981. There have even been reports of grape thefts such is the pressure on stocks this year.
– 27% lower in Bourgogne/Beaujolais.
– A 7% smaller harvest is also expected in the Languedoc-Roussillon, but there could reportedly be up to 40% less rosé and Chardonnay wines as a result.
– Whilst Champagne is expected to be 37% down. All of which means with less grapes to go around and demand as high as ever that French wine prices, which had started to lower, will be, at worst, stabilising, if not going up.
Do French wines add up?
Not necessarily good news for French producers considering how their average grape prices are, in the main, more expensive than their closest competitors in Italy and, in particular, Spain.
France’s generic red and white wines are coming in at €0.5 and €0.6 per litre, compared to €0.25 and €0.35 in Spain and €0.32 and €0.35 in Italy. Which, in turn, is likely to see French retailers and wholesalers look to bring in cheaper table wines from these more competitive overseas countries, like Spain.
The OIV has also reported that Italy should expect the world’s biggest vintage of 48.8m hl in 2016, down 2% on last year, with Spain coming in at 37.8m hl, 1% up. Italy will certainly be hit by what could be a 15% drop in its Pinot Grigio volumes.
One thing is for sure is that if France has the wine to sell, it is ready and waiting to dip in to its well protected 2014 and 2015 reserves, then there will be buyers around the world queuing up to buy it.
Noticeably the Sopexa report shows that only 76% of international buyers consider Spain as a must have for their lists, rising a little to 80% for Italian wines. But still well behind France’s dominant 94%.
Difficulty for UK buyers
But what about the UK? The unknown factor for UK wine buyers going in 2017 is at what price they will be paying for the wines they can find. Importing French wine under the current sterling levels is already pushing 15% more expensive than what is was earlier in the year. With less wine to sell the French will understandably be putting the base costs of their wines up in 2017 and 2018 meaning buyers are going to have to think twice before even committing to buying an average bottle of French wine, never mind the expensive stuff.
The quality of the 2015 harvest in many regions of France, particularly Bordeaux, means those wines coming on to the market next year will be carrying a higher price point regardless of the rate of sterling.
Bordeaux is one of the few major regions that looks like it is going to come out of 2016 smiling as well. Its hottest August on record, followed by rains in September, saved the harvest to produce what is expected to be another good quality vintage.
Not so natural
There is also likely to be a shortage of the on trend natural and organic wines coming out of some areas of France. Those natural winemakers hit by floods and frost who stuck to their principles had to watch as their vines gave way to disease and mildew. Others who were forced in to using sprays will have lost their organic and natural wine status.
Vincent Dureuil-Janthial from Rully in Burgundy who was forced to use sprays told the AFP news agency that: “It’s the most difficult decision I have ever taken.” It has meant losing the organic certification he has had held for a decade. “It felt like a personal failure,” but with six employees to pay, he added: “I had to take a decision as a business owner to save what little of the crop was left to save.”
You only have to look at how well most of the French wine regions are performing in the super competitive UK wine market to see that the consumer demand is there. Take Beaujolais. Over the last 12 months its Beaujolais-Villages AOC wines have gone up by 15.7% in volume and 10% in value. Crus wines were up 53.3% in volume and a 46% in value.
Elsewhere in France there was also good news for Burgundy, which saw export sales to the UK up 16.83% in volume and 13.3% in value, and Provence, up 16.2% in volume, and an impressive 30% in value. The Loire also saw a 20.24% jump in value.
It has been a challenging year for many of the world’s major wine producing countries. With crops and vintages down all over the world. But none more or so than in France.
How it reacts and trades across the coming months will be of great interest to international buyers and potentially a benchmark for many other countries to follow.
* This is an adapted version of an article that first appeared on VINEX, the global trading site for bulk wine.