Experts are predicting a wine shortage that could begin as soon as 2018.
Extreme weather conditions in Spain, Italy, and France have the trio of wine-producing countries facing a dip in production estimated at 8.2 percent of the typical yield.
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Let the panic begin.
Coupling the European dip with the fires in California — the fourth largest producer of wine in the world — could cause wine shortages as well as increased prices.
Stephen Rannekleiv, a global beverages strategist at Rabobank, told CNNMoney, that the dip could have the greatest impact on the more affordable options in the market.
“We still foresee a dramatic decline in wine availability going into 2018,” he said. “We expect the decline [in consumption] to be felt most tangibly in the lower-priced tiers.”
The yield on usable grapes have been reduced by a combination of cold weather producing hail as well as long periods of drought. It is causing experts to predict a historically low output for the 2017 growing season.
“It has not been uncommon for one of these three producers [Italy, Spain and France] to have an off year,” Rannekleiv added. “But rarely have we seen such poor harvests for all three simultaneously.”
The immediate market impact is a shift in pricing.
The wine varieties from those key countries have moved to an increase of about 10 percent — beginning in May, when growers began noticing the trend of poor harvest.
California growers do not have to deal with just the weather but also the smoke damage that could add additional down years to quality production.
Michael Kaiser, the vice president of WineAmerica, told CNNMoney that the future ramifications may be greater than the immediacy being reported on.
“The real danger is the potential loss of damage to the vines for future years,” he said. “We are a long way from knowing what that could mean for wineries.”
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