The pending wine-pocalypse
It's a recipe for disaster: global wine consumption is up, but global wine production is down. That's the problem in a nutshell, and it's not hard to see where things are going.
Morgan Stanley Research conducted a recent survey which found that the global wine trade is currently undersupplied by nearly 300 million cases of wine a year. This, even though there are over one million wine producers globally. Most of the world's wine is produced in Europe, although America and Australia also contribute to the global pool of wine.
Wine production has been steadily falling since 2004. However, last year was particularly bad, with global production down by 5%, thanks mainly to bad weather events in France and Argentina. Production in Europe alone fell 10%. Last year's wine production rates were the lowest since 1960, which is a problem, since wine consumption continued to grow globally by 1%.
What does this mean? First of all, it means that you might want to think about starting your own vineyard! The basic laws of supply and demand mean that the price will rise, which could make this a lucrative time to start producing your own vintage.
Second, it means we should all brace ourselves for higher wine prices. As demand rises and supply falls, the scarcity will drive up the price significantly. How long will Trader Joe's "two buck Chuck" be able to hold out? Probably not much longer. Within a few years, it could be more like "ten buck Chuck."
And third, if you are interested in collecting wine, this is clearly the time to do it. Prices will go up, which means that if you want to buy wine, you should do it now while it's still (relatively) cheap.
Wine consumption worldwide is highest in France, with America coming in second. Third, but rising quickly to the top, is China.
Image courtesy Flickr/Tobyotter