Greg Sherwood MW: Where are fine wine prices headed?

By , 6 February 2024



“A slightly slower, less frenzied Burgundy En primeur 2022 campaign this year” – Greg Sherwood MW.

When you work in the wine trade, it is hard not to look out over a wider society around you that is slowly and subtly becoming more and more hostile to alcohol consumption in the general sense. As a result, many a recent wine trade lunch has become consumed with discussions over the future of not only wine and spirits, but also the general lack of consumption amongst the younger 18- to 25-year-old generation, technically the wine trade’s future consumers. Of course, it’s hard to argue against the mantra of drinking less but better, indeed, this is partly the reason I wanted to focus on the “fine wine” end of the trade and not the mass market FMCG end when I decided to change careers nearly 30 years ago.

Anecdotally, it just feels like the mass market in the UK and the wider EU is drinking less and less wine as prices rise rapidly in the multiple supermarket channels where over 85% of all wine is purchased. Undoubtedly, some of these consumers will decide that the prices of average branded wine in supermarkets is now simply too expensive and they will opt to either shift consumption to beer and spirits, or perhaps, as is more common today, they’ll simply decide to follow a path of abstinence. Both seem an overreaction to me personally, but it’s just a simple fact that a lot of consumers have no historical vested interest in wine drinking… however strange that may seem to someone who lives and breathes the product daily.

I recently returned from several trips to Burgundy and Bordeaux and was fascinated to hear how quickly wine consumption was dropping in cultural heartlands like France, Spain and Italy, who also happen to be the three largest wine producing nations in the world. Whether sitting in a mouldy Burgundian vaulted cellar or in a polished mahogany tasting room in a Bordeaux chateau, the question of shrinking consumption, narrowing routes to market and the general inability to develop the next generation of consumers is generally met with a pronounced gallic shrug of the shoulders and a certain amount of quiet resignation.

One school of thought subscribes to the idea that due to the wider long-term cost of living crisis that is affecting everyone around the world, especially the younger generations who are consequently struggling to pay for expensive university education, get well paid jobs, leave home and buy properties, and generally get ahead in life, that this is one of the main causes wine and general alcohol consumption has stagnated or dropped. This school of thought also believes that given time, while slightly delayed, a sizable percentage of this new generation will eventually find a firmer footing and will also evolve into engaged wine consumers.

The danger in the above assumption lies in believing that everyone automatically wants to gradually buy more possessions, buy a bigger car, buy a bigger home, accumulate more possessions, and lead a lifestyle with a more impactful environmental footprint. Once again, many sociologists are predicting, to the contrary, that “lite living” without the burden of too many possessions and reduced consumerism will possibly be the way of the future generations, who may be equally happy to rent a home for life instead of buying and paying a 30- or 40-year mortgage, that may be unaffordable now in any case.

Without wanting to get bogged down in sociology models and hypotheses, this all points, at the very least, to a uncertain future for the wine industry as a whole. At the entry level FMCG end of production, it now seems there is simply too much wine being produced globally and not enough willing consumers. At the premium end of production, the general consumers of fine wines are definitely still there but are a fast ageing demographic that is not being replaced sufficiently by a newer generation of engaged collectors and connoisseurs eager to follow in the predecessors’ footsteps.

On a recent trip to Burgundy, arguably one of the most intricate, high quality but also expensive collectable fine wine regions on the planet, even here, I started to hear more and more murmurings from growers about the unsustainability of the current price trends of recent times. Believe me, it’s an incredibly hard thing for producers to criticise and question the direction of the market when it has also been the goose that has laid many golden eggs and has been a veritable path to considerable wealth creation. But even the Burgundians are now realising that perhaps the market is overheating and the end to perpetual price rises is in sight.

Undoubtedly, inflation rates in the UK and the wider EU of 5% to 8% still make it incredibly difficult for producers to avoid raising prices yet further as they release their 2022/3 vintages. Indeed, it has reached a point where Burgundian producers simply deciding to maintain their 2021 prices for a consecutive vintage release, equates, at least in their mind if not in reality, to a price reduction – something that is quite simply unheard of in Burgundy.

Ironically, it was the thought of Burgundy turning into another Bordeaux-styled marketplace with unsustainable new price releases every year that has seen many Burgundy growers start calling for a slower, more conservative and sustainable approach to long-term pricing.

For many premium producers however, the real game changer will come when the newest generation of affluent Asian wine consumers, who are responsible for actually drinking, and not simply collecting, all the iconic highly priced Bordeaux and Burgundy wine brands, start to push back and feel that prices are becoming unaffordable. This is after all, an Asian generation that has consumed expensive fine wine willingly from day one because they never knew a time when first growth Claret was sub-£50 per bottle and Grand Cru Burgundies were substantially less. Until then, those of us in the wine trade will all keep calm and carry on while constantly monitoring emerging trends…

  • Greg Sherwood was born in Pretoria, South Africa, and as the son of a career diplomat, spent his first 21 years traveling the globe with his parents. With a Business Management and Marketing degree from Webster University, St. Louis, Missouri, USA, Sherwood began his working career as a commodity trader. In 2000, he decided to make more of a long-held interest in wine taking a position at Handford Wines in South Kensington, London, working his way up to the position of Senior Wine Buyer. Earlier this year, he moved across to South African specialist merchant Museum Wines to become the Fine Wine Director. He qualified as a Master of Wine in 2007.


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