Every day, the men and women who make Bordeaux wines write new pages in the history of the Bordeaux wine region. Today, 5,300 wineries and more than 300 wine merchants give life to the Gironde region, generating 60,000 direct and indirect jobs.
THE LARGEST APPELLATION VINEYARD IN FRANCE
With 108,000 hectares, Bordeaux is the largest appellation vineyard in France, representing 15% of the national wine-growing area. Confined to the Gironde department, it covers almost 10% of the department’s surface area.
Bordeaux vineyards specialized in the production of appellation wines in the 1970s and 1980s, reaching a surface area of over 120,000 hectares under appellation in the mid-2000s. This was followed by a gradual reduction in surface area.
Figure 1 – Surface area harvested in Gironde (Source: Customs)
With its rich diversity of terroirs, the vineyard offers a wide variety of appellations, colors (red, rosé, dry, sweet and syrupy white wines) and sparkling wine – Crémant de Bordeaux. Although the share of white wines is limited today (11% of surface area) and Bordeaux vineyards are often associated with red wines, the weight of colors has greatly evolved over time, to the detriment of white wines, which were in the majority until the late 1970s.
The grape varieties used are in keeping with long-standing Bordeaux traditions. In reds, Merlot remains the most represented grape variety (66%), ahead of Cabernet Sauvignon (22%) and Cabernet Franc (9%). For whites, Sauvignon (47%) has become the most widespread grape variety, ahead of Sémillon (45%), the latter being more widespread in sweet wine-producing regions. Muscadelle (5%) comes third.
Faced with climate change, which until now has favored the ripening of Bordeaux grape varieties, the vineyard is anticipating and adapting.
The choice of planting material is becoming strategic, giving priority to older, later-ripening varieties (Petit Verdot, for example), new Vitis vinifera varieties for adaptation (VIFAs, such as Arinarnoa, Castets, Marselan and Liliorila) and rootstocks more resistant to water stress. Agronomic practices are evolving: delaying the pruning date to delay the vegetative cycle and limit the impact of spring frosts, limiting leaf thinning to protect grapes from the sun’s rays, favoring grass cover to avoid evapotranspiration, adapting the sun exposure of newly planted vines and bringing forward the harvest date.
Despite these efforts, the vineyards have been affected by climatic hazards in recent years: harvests have plateaued at less than 5 million hectolitres, and average annual yields have been limited. These yield reductions have had an impact on winegrowers’ incomes.
Figure 2- Trends in harvest volumes and yields (Source: Customs)
A CHANGING VITICULTURE
As in many other sectors, the concentration of production companies continues. The number of winegrowing farms has been divided by 6 in 50 years, and the average farm size has increased. While the average Bordeaux vineyard covers an area of 20 hectares in appellation, its size is diversified, with more than a quarter of all vineyards having an area of less than 5 hectares. Winegrowing businesses are often family-run, with 56% sole proprietors. The cooperative movement, which brings together 30 cooperative wineries in Bordeaux (mostly grouped into 6 cooperative unions), represents almost 40% of Bordeaux’s winegrowers.
Faced with environmental, economic and social challenges, winegrowers have been changing their practices for over 25 years to reduce their ecological footprint. By 2022, more than 75% of the vineyard’s surface area is certified by an environmental approach (Agriculture Biologique, HVE, Demeter, Terra Vitis, etc.). The common objective is to reduce the ecological footprint and greenhouse gas emissions, and preserve biodiversity, while ensuring the production of quality wines.
A TRADE AT THE HEART OF THE BORDEAUX WINE INDUSTRY
The majority of Bordeaux wine volumes (70%) are sold by Bordeaux wine merchants. Estimated to number around 300 in the Gironde region, wine merchants have been an economic and commercial force for several centuries, helping to make Bordeaux wines known the world over (exported to over 180 countries).
The wine trade is versatile, combining technical expertise, market knowledge, marketing and logistical capabilities. Whether selecting products to make wines under brand names or distributing wines from châteaux, the activities are specific to each trading company, and one out of two also owns vineyards. The Gironde wine trade also plays a key role in the primeur market, as it is the financial backer of the stocks of wines from the latest vintage of Crus Classés and similar wines, which will be aged in the châteaux for 18 to 24 months.
Brokers are invaluable intermediaries in bringing winegrowers and merchants together. Their role is to bring together supply and demand, and to guarantee the smooth running of a transaction while respecting both parties.
MARKETING IMPACTED IN FRANCE BY THE “LESS BUT BETTER” TREND
In France, Bordeaux wines benefit from a strong domestic market of nearly 40 million wine consumers. The French still have a strong cultural attachment to wine. 55% of Bordeaux wines are sold in France, almost half of them in supermarkets.
However, like many wine-producing (and traditionally wine-consuming) countries, France has seen a long erosion in wine consumption. From 140 liters of wine in 1950, the French have reduced their consumption to around 40 liters a year today.
French drinking habits are undergoing profound changes, reducing the opportunities to drink wine, and red wine in particular. Meals are more unstructured, and wine no longer accompanies all meals, leaving less room for meat, traditionally accompanied by red wine. Drinking occasions are concentrated on weekends and are more informal, with the aperitif benefiting from beers, chilled wines, cocktails, spirits and effervescents.
With each generation, the frequency of wine consumption decreases, limiting the volumes consumed and giving the opportunity to spend more. As a result, the average purchase price in stores has risen (from €5 to €6.5 on average for Bordeaux wines in hypermarkets in 10 years), illustrating the trend towards “less but better”.
As early as the 12th century, Bordeaux wines were exported beyond Aquitaine to England, then in the 17th century to the Netherlands. The range of destinations has expanded steadily over time, creating the magnificent reputation of Bordeaux wines around the world.
In 2022, 1.8 million hectolitres (240 million bottles) were exported worldwide, worth 2.3 billion euros. In the Gironde region, the wine industry accounts for around 30% of export value. It is the leading export sector, ahead of aeronautics.
Over the past decade, several events – production hazards, a contraction in the Chinese market and a health crisis – have penalized the business. The crop failures of 2013 and 2017 led to a significant drop in Bordeaux exports in the years that followed.
The development of the Chinese market for Bordeaux wines really took off at the end of the 2000s, reaching its peak in 2017 with 630,000 hectolitres. These purchases proved to be disproportionate to the reality of the Chinese market. At the same time, competition from Australian and Chilean wines took hold in China.
In 2020, the Covid crisis turned the world economy upside down. China chose to apply a very strict management of the epidemic, closing its borders and applying very restrictive procedures to each identified case. These measures had a major impact on the wine industry, with the closure of bars and restaurants limiting consumption and reinforcing patriotic sentiment in favor of Chinese wines.
At the end of 2022, Bordeaux exports to mainland China (262,000 hectolitres year-on-year) remained disappointingly low, still limited by measures linked to the Covid crisis, although the Chinese market remained the leading market for Bordeaux wines. At the beginning of 2023, China suspended the restrictions put in place to contain the Covid epidemic, and the beginnings of a recovery are being felt.
In Hong Kong, social and political tensions have weakened the economy, and wine imports have fallen sharply in recent years. Singapore is positioning itself as the new platform for fine wines in Asia.
The United States ranks second with 230,000 hectolitres by 2022, and is a very attractive market in terms of value for Bordeaux wines.
Figure 3- All Bordeaux wines – Distribution of exports by country – 12-month rolling total to end October 2022 (Source : Customs)
Volume: 1.77 million hl
Value: 2.33 billion euros
As far as Europe is concerned, volumes are steadily declining, against a backdrop of mature consumption and highly concentrated distribution, exacerbating competition between different suppliers, both European and from the New World. While the top six destinations account for 65% of Bordeaux wine exports, this figure rose to 181 countries in 2021. In 2022, the diversification of destinations led to significant growth in exports to Africa (Ivory Coast, Cameroon, Gabon, Nigeria), Asia (Taiwan, Vietnam, Thailand) and Europe (Sweden, Ireland, Austria).
Barely two years after the Covid epidemic, which brought global economic activity to a halt and led to erratic restarts, the war in the Ukraine unleashed by Russia in February 2022 led to further geopolitical and economic disruption, with energy and commodity prices soaring and inflation taking hold in Europe and other countries around the world.
After two major economic shocks, and faced with structural changes in consumption and climate change, the Bordeaux wine industry is adapting. From the vine to the cellar, Bordeaux winegrowers and merchants continue to innovate, while at the same time making the most of their ancestral know-how. Perpetual reinvention is what makes Bordeaux wines so unique.
