The value of wine exports

I have written before about the relationship between the volume of wine exports and the monetary value of those exports, with regard to particular countries. Clearly, some exports are worth a lot more money, per liter, than are others. I thought that it might be worth looking at the current top export countries, to see how these differences come about.

The first lot of data to be discussed come from the Organisation Internationale de la Vigne et du Vin (via VinEx), for the year 2020. The graph below shows us both the volume (horizontally) and the value (vertically) of the wine exports for the top 11 wine-exporting countries, with each point representing one country.

Clearly, there are three (named) countries that stand out from the rest, plus another two (Chile and Australia) that produce more than the main bunch (which includes, in decreasing order of volume: Argentina, United States, South Africa, Germany, Portugal, New Zealand).

In order to understand the way in which the top three export countries differ from each other, I have added a dashed line that summarizes the relationship between volume and value for the other eight countries (those at the left of the graph). This line reveals that 63% of the variation in value (among countries) is related solely to export volume. It is thus the other 37% that is of interest — why do the countries vary?

Of especial interest to us in this post, Spain is below this line, indicating that its Euro / Liter price is less than the average for the other countries. Italy, on the other hand, is above the line, indicating a better-than-average export price for its wine. France is way above the line, indicating that it is doing much better than any other country — it is getting much more money per liter than the others.

To look at why France might be different, we could look at some data from the Fédération des Exportateurs de Vins & Spiritueux de France (also via VinEx). These data break down the French 2020 export volume and value by type of wine quality. The following table shows the Euros / HectoLiter values for five French categories:

Champagne Still wines AOC Still wines IGP Varietal without GI Other wines without GI

2,347 773 223 216 138

As expected, the values are different for the different wine-quality categories, with the upper Appellation d’Origine Contrôlée (AOC) wines being worth, on average, 3.5 times as much as the more basic Indication Géographique Protégée (IGP) wines. However, the real sting is that the Champagne wines are worth 3 times as much as the other AOC wines, on average. This is why France stands out so strongly in the graph above — not for still wines but for its prestige sparkling wines (whose premium value is based very much on customer perception).

So, French wine export value relies heavily on the sparkling wines of Champagne (not Coteaux Champenois!). Some data from the Comité Champagne, via the AAWE, for the main Champagne markets in 2020 show the following destinations, in millions of bottles:

France United Kingdom United States Japan Germany Belgium Australia Italy Switzerland China

113.3 21.3 20.8 10.8 10.1 9.0 8.5 6.9 4.9 3.5

Interestingly, another set of Comité Champagne data, also via the AAWE, shows that the percentage of Champagne exported has increased steadily since 2010 (from 42% to 53%), while the amount shipped within France has steadily fallen over that time (from 185.1 million bottles to 141.6 in 2019 and 113.3 in 2020). So, clearly the French wine exporters know which side their bread is buttered on.

We can compare this situation to that of the Italian wine exports. Some data from the Bulk Wine Club (via VinEx), break down the Italian wine exports for the first half of 2020. This next table shows the Euros / HectoLiter values for four categories of Italian wine exports:

Sparkling Bottled Bag-in-box   Bulk

348 351   205 72

As you can see, Italian sparkling wine does not do better than the still wines, in terms of value. The Italians are doing well in terms of value (as shown in the top graph); but they now know what they need to do to move further upwards — improve their sparkling wine’s image.

The Spaniards are in a somewhat different position, of course. It is well known that they are the world’s biggest bulk-wine exporters (Global bulk wine routes visualized); and the financial consequences of this have been discussed by several people before now (eg. Spain is world’s biggest wine exporter but why does it sell its vino so cheap?).

Spain does export more wine per capita than their competitors (2018: Spain 45.0 liters per person, Italy 32.7, France 25.1). However, this is not enough, and the Spanish sparkling-wine producers know it. High-quality Cava does exist (The search for high-quality Cava begins in Penedès); and there have recently been moves to improve the quality and image of Cava (Cava’s last shot at survival).

However, wine is not actually a particularly big part of Spain’s exports. In terms of value, automobiles are number 1, with automobile parts/accessories not far behind. Spain is a big producer of pharmaceuticals, and also of processed petroleum oils (import crude oil → export refined petroleum). Even swine meat, citrus fruit (fresh and dried), and olive oil out-export wine. Indeed, in Spain the vineyard share of the national agricultural crop area is less than Italy’s (2017: Spain 5.5% , Italy 7.6%, France 4.1%).

So, there are various inter-connected reasons for the differences in export value among the top wine-exporting nations. It would be boring if the world were too simple.