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Summary of our market study
The global wine market, with a valuation of $489.3 billion in 2021, is projected to grow at a 6.1% CAGR from 2022 to 2030. European wines dominate the sector, accounting for 45% of worldwide sales. Burgundy, a prime region in France, witnessed a surge in demand, with exports growing by 12.6% in 2022 compared to the previous year, although volumes dipped by 10.2%. The region, known for its quality wines, predominantly white (60%) and red (30%), faces a challenge with younger consumers showing reduced interest, especially in red wines like Bordeaux, which saw significant consumption decreases (7% drop between 2011 and 2021).
Burgundy wine production plays a significant economic role, contributing 2.8% to the regional GDP and accounting for 7% of employment. Despite representing only 4% of French vineyards, production reached 205.8 million bottles in 2022, with nearly half exported, generating significant value (€1.1 billion) given its 2.9% share of the global wine trade. Internally, the French market saw 76% wine purchases in supermarkets, and Burgundy wines maintained a strong preference at 36%.
The industry is subject to stringent regulations pertaining to labeling and exporting, ensuring authenticity and quality control. Burgundy remains a sought-after region, with wines like the Leroy Musigny 2006 auctioned for €33,000, and the export market continues to demand high prices, underscoring the region's prestigious standing in the global market.
Evolving French Market for Burgundy Wines: A Detailed Analysis
The French market has historically maintained an intimate connection with its wines, and Burgundy wines, known for their distinction and quality, represent a significant portion of this cultural heritage. Wine consumption in France is deeply embedded within its culture, and despite facing a myriad of challenges such as US tariffs, Brexit complications, the global pandemic, and changing internal consumer habits, the industry has shown resilience. The wine market is expected to have surpassed the threshold of between 30 and 40 billion euros in 2021, illustrating the sector's robustness and importance within the French economy.
Burgundy wines, which are strictly French in terms of origin, have approximately half of their production consumed within the national borders. In terms of volume, an estimated 205.8 million bottles made their way to various distribution channels in 2022, with an overall value amounting to 2 billion euros. It is crucial to note that the domestic market holds a substantial volume share of between 50 and 60 percent in bottle sales, adding up to between 100 and 120 million bottles.
When it comes to value, the French market's share is slightly less prominent, accounting for nearly half of the total sales, which is between 0.8 and 1 billion euros. Demand in the French market is experiencing a transformative phase. Younger consumers are gravitating away from wine, with only between 25 and 30 percent expressing a preference for wine over other beverages. Red wine consumption is particularly affected by this trend, showcasing a downward trend in its dominance.
White and rosé wines are gaining traction, finding a special place during apéritif times and in settings that value lighter and fresher options. This shift is seen impacting regions like Bordeaux, with sales dropping significantly—highlighting that a change in consumption habits is leading towards moderation.
Supermarkets remain the primary point of purchase for wine, with between 75 and 80 percent of French people indicating this preference. The region of origin holds significant sway in the choice of wine, right after price considerations, indicating a strong regional loyalty and recognition of quality associated with specific appellations.
Regarding grape variety, Chardonnay and Pinot Noir are the important players for white and red wines, respectively.
Key Players Shaping the Burgundy Wine Market Landscape
The Burgundy wine market is a complex system with numerous influential entities contributing to its unique dynamism. The region itself is a tapestry of renowned winegrowers, cooperative wineries, merchants, and specialist retailers who continue to shape its legacy, maintain its esteemed reputation, and meet the diverse preferences of wine aficionados.
- Winegrowers
At the forefront of the Burgundy wine landscape are the distinguished winegrowers:
- Domaine de la Romanée Conti stands as a beacon of prestige, its name synonymous with exclusivity and exceptional quality in the world of fine wines.
- Maison Joseph Drouhin, another major player, has a rich history and dedication to producing quality wines that encapsulate the heart of Burgundy's terroir.
- Maison Jean Loron and Maison M. Chapoutier also contribute significantly to the wine production of the region, bringing traditional expertise and innovative methods to their vineyards and bottling processes.
- Cooperative Wineries
- Wine cooperatives are critical components of the Burgundy wine sector, with Cave des Vignerons de Mancey, Tournus and Les Vignerons d'Igé allowing local winegrowers to pool their resources for production and distribution.
- Similarly, Cave Bailly Lapierre, Cave Henry de Vezelay, and Cave des Grands Crus Blancs play an important role in bolstering the strength of Burgundy wines through their collective efforts in winemaking and marketing.
- Merchants and Negociants
Moving along the value chain, we encounter merchants who serve as vital intermediaries between winegrowers and consumers. Les Grands Chais de France is one of these heavyweights, acting as both a producer and distributor with an extensive portfolio that navigates across market segments. Their influence not only resides internally but also stretches across global markets where they export a significant quantity of wine.
- Specialist Retailers and Pure Players
Specialist retailers like Nicolas and wine merchant societies such as Caves de Rauzan offer curated wine selections and expert guidance to a discerning clientele. Moreover, Cavavin and Pure Player Inter Caves diversify the distribution channels with their physical stores and digital platforms, making Burgundy wines accessible to a broader audience.
- Supermarkets and Hypermarkets
Not to be overlooked, supermarkets like Carrefour France and the Auchan Group are critical in making Burgundy wines widely available.
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Summary and extracts
1 Market overview
1.1 Definition and presentation
Burgundy is a region in central-eastern France, world-famous for the quality of its wines, and comprises the departments of Yonne (89), Côte-d'Or (21), Nièvre (58) and Saône-et-Loire (71). What's more, the climats of the Burgundy vineyards became a UNESCO World Heritage Site in 2015, putting the products in the spotlight.
With over 30 thousand hectares of production area in 2021, the Burgundy Region represents 4% of French vineyards, 3% of national wine production and 0.5% of world production.
Burgundy wines are 60% dry white and 30% red. Rosé and sparkling wines are rarer, but still present. The majority are made from two grape varieties: Chardonnay for white wines and Pinot Noir for reds. Other main grape varieties include aligoté, gamay, sauvignon and césar.
Burgundy wine production is a major contributor to the region's economic dynamism: in 2021, the industry will account for 2.8% of the GDP of Burgundy Franche-Comté, and will generate over 45,000 jobs, or 7% of the region's total employment.
There are a total of 84 Appellations d'Origine Contrôlée (AOC ). In Burgundy wine production, regional AOCs account for over 50% of total production, while communal AOCs account for over 30%. Next come the premiers crus (10% of the total), followed by the grands crus (between 1 and 2%). The 6 regional AOCs are as follows:
- Bourgogne
- Bourgogne aligoté
- Bourgogne Mousseux
- Côteaux Bourguignons
- Bourgogne passe-tout-grains
- Crémant de Bourgogne
There are also 44 communal AOCs, distributed among the following 5 vineyards:
- Basse-Bourgogne vineyards
- Côte de Nuits vineyards
- Côte de Beaune vineyards
- Côte Chalonnaise vineyards
- Mâconnais vineyards
1.2 The global market
The global wine market
According to a report by Acumen Research & Consulting, the global wine market is estimated to be worth $***.* billion in ****, and is expected to grow at a CAGR of *.*% between **** and ****. This gives the following estimates:
World wine market World, ****-****, in billions of dollars Source: ****
With regard to the geographical breakdown of the market, the report highlights that European wines account for **% of the global wine market.
Burgundy wines worldwide :
On the export front, sales continue to grow(***). Exports, however, remain higher than in the pre-Covid period: +*.*% in **** versus ****.
* bottle in * is exported(***). Leading export markets: **% United States, **% Great Britain, *% Belgium, *% Canada, *% Japan, which account for almost two-thirds of exports.
Main export markets for Burgundy wines France, ****, in Source : Dico du vin Production is ***.* million bottles marketed, **% of which are exported, generating **% of total sales of * billion euros for Burgundy wines. The global market for Burgundy wines therefore represents **.* million bottles for sales of *.* billion euros. Finally, Burgundy wines account for *.*% of world wine trade in value, for *.*% of production , and **% of French AOC export sales, for *. *% of production [***].
1.3 The French market
The national wine market
Wine occupies a special place in French culture. According to Insee industry figures, the French wine market is expected to exceed ** billion euros in ****.
French wine market size France, ****-****, € billion Source: ****
However, the challenges facing the wine industry are multiplying. The US surtax on wine, along with Brexit and the coronavirus crisis, are all threats to the wine sector. As for threats from within the market, the decline in wine consumption in France is accompanied by a transformation in consumer habits, to which industry professionals are being forced to adapt.
The French market for Burgundy wines
By their very nature, Burgundy wines are entirely French in origin, with around half of production destined for the national market. In total, the equivalent of ***.* million bottles were sold in ****, worth * billion euros [***]. In ****, the industry's sales in France are estimated at **% of bottles produced, for **% of total sales. In other words, the French market represents a value of *.* billion euros for ***.* million bottles sold .
French market share of Burgundy wine sales by volume France, ****, in Source: ****
French market share of Burgundy wine sales by value France, ****, in Source: ****
2 Demand analysis
2.1 Consumer profile
According to the Cavissima **** annual barometer conducted by Ifop on "Les Français et le vin", **% of French people say they drink wine, and **% say they buy it. A total of *.*% say they "consume wine frequently".
French wine consumption frequency France, ****, in Source: ****
According to a Wine Intelligence study also published in ****, **% of wine is consumed by the over-**s, and only **% by the **-**s.
Share of wine consumed by age group France, ****, in Source: ****
Red wine is France's favorite wine, the first choice of **% of French people. It is even more popular with men, as well as with the over-**s, who in each of these categories prefer it to white, rosé and other wines by **%.
Types of wine preferred by the French France, ****, in Source : Ifop Bordeaux wines top the list of French wine preferences by wine-growing region, with **% of respondents, closely followed by Burgundy wines (***). In particular, they are preferred by **% of men, **% of the over **s, and **% of respondents from the South-West region.
Types of wine preferred by the French, by wine-growing region France, ****, in Source: ****
2.2 French consumer habits
By the end of ****, **% of French people will say they buy wine in supermarkets. This figure rises to **% among **-** year-olds. Supermarkets are the primary place of purchase for **% of respondents of all ages, while **% prefer to buy wine directly from a winery, and **% from an independent wine merchant.
Place of wine purchase France, ****, in Source: ****
As we saw in section *.*, the wine preferred by **% of French consumers is Burgundy. Region of origin is the second most important criterion for wine consumers, directly after price, but ahead of label, vintage or reputation.
Wine choice criteria France, ****, in % Source: ****
2.3 Demand affected by changes in wine consumption
Young people turning away from wine
A Kantar study reveals that young people seem to have little interest in wine compared to their elders. The **-** age group accounts for just **% of all wine consumed, and their consumption has been falling in recent years. Between **** and ****, consumption is expected to fall by *%. Wine Intelligence reveals that **% of **-** year-olds prefer another beverage than wine, and only **% claim to like the taste of wine. [***]
Red wine is particularly affected by this decline in interest, and is also facing a trend towards white and rosé wines. Consumers are drinking less and less, especially during everyday meals. On the other hand, they do like to enjoy a glass of wine as an aperitif, and prefer to drink white and rosé wines, considered to be fresh and "safe values" when you're not a fan of fine wines.
Bordeaux red wines are likely to suffer the most from these changes in consumption patterns. Bernard Farges, president of the CIVB (***) of changing consumption patterns."[***] The CIVB's Bilan **** reveals that, according to a Kantar study, it is Bordeaux red wines between €* and €* that are most affected by the population's moderation in relation to alcohol consumption. Out of *** units ...
3 Market structure
3.1 Value chain
The wine market is divided into several types of players involved in the various stages leading up to the marketing of wine. Production leads either to direct sales on the estate, or to sales to intermediaries who in turn sell the wine to retailers. Finally, the wine is either sold to professionals in the CHD (***) market, such as restaurants or bars, and then consumed by individuals, or sold directly to households via distributors.
Source: ****
3.2 Burgundy wine production
there are several types of wine producers who fall into three main categories[***] :
Harvesting winegrowers, who vinify their own harvest Négociants vignificateurs, who buy grapes from winegrowers for vinification Caves coopératives, which are groups of winegrowers who produce and sell wine made from the grapes of their members.
There are some *,*** wine estates in the Burgundy region (***). The average size of an estate is *.** hectares. Total production in **** was *.** million hectolitres, including *.** million in AOC [***].
This represents *% of French vineyards in terms of surface area, and *.*% of French AOC production. However, it represents only *% of French production and *.*% of world production.
The vast majority of wines produced in Burgundy are white (***), but the region also produces **% of red wines and **% of Crémant de Bourgogne.
Distribution of Burgundy wines, by type of wine France, ****, in Source: ****
We'll come back to appellations later in the study, but the main ones are: regional appellations(***). Figures are given in % of surface area by appellation group.
Area in production by appellation group France, ****, in Source : Vins-Bourgogne The distribution of production is slightly different from the surface area. For example, regional appellations account for **% of production, compared with just **% for Côte de Beaune. Breakdown ...
3.3 Distribution of Burgundy wines
Distribution of Burgundy wines sometimes involves specialized market players. It can be carried out by négociants, who then sell to distributors such as supermarkets and hypermarkets, or to CHD professionals such as restaurants and hotels. There are *** négociants selling Burgundy wines, and ** cooperatives.
Distribution now also goes through specialized websites such as Millésima or Wineandco.
Between winegrowers and merchants, brokers may intervene, selecting wines by giving an impartial opinion on the quality of the harvest, and offering them to the trade. There are some ** wine brokers in Burgundy, accounting for **% of all bulk, must, grape and unopened bottle transactions in Burgundy [***].
In terms of volume, **% of Burgundy wine distribution in **** will be exported, **% in traditional channels (***), and **% in supermarkets.
Distribution of Burgundy wine by volume World, ****, in Source : Vins-Bourgogne In terms of value, **% of Burgundy wine distribution in **** will be exported, **% in traditional channels (***), and **% in supermarkets. Breakdown of Burgundy wine distribution by value World, ****, in Source: ****
4 Offer analysis
4.1 Burgundy wine prices
A vineyard whose prices can soar:
The iDealwine **** Barometer presents a detailed analysis of the **** auction sales recorded on the iDealwine platform. The data highlights the scarcity of wines, particularly in Burgundy. Indeed, Burgundy stands out as having the highest average price for a **cl bottle of wine traded on the secondary market, with an average of €*** (***). Not surprisingly, it is in this region that we find, year after year, the most expensive bottle sold at auction at €**,*** in **** for a bottle of Leroy Musigny **** [***].
Recent increase :
In ****, price increases ranged from **% to **% depending on the appellation [***]. But why have prices increased so much recently?
Firstly, there has been an increase in the cost of raw materials used in bottle production, such as corks and glass. However, this increase remains relatively moderate and is not the main reason for the surge in prices.
Secondly, the decline in harvests in recent years has had a significant impact. You have to go back to **** to find a year of abundant harvests. This scarcity of harvests led to an increase in prices. In ****, significant losses were recorded, leading winegrowers to pass on these losses to the purchase price and, consequently, to selling prices.
Finally, ...
4.2 Types of offer: wines and varietals
Most Burgundy wines are white (***). White wines are growing in popularity, as they are easily consumed chilled for lunch or as an aperitif. In France as a whole, dry whites are expected to grow by **. *% in ****, and sweet whites by **.*% , according to Nielsen IQ. Crémants de Bourgogne, which are benefiting from the same trend for fresh wines to be shared in convivial moments, are not to be outdone, with **.* million bottles produced in **** [***].
In Burgundy, unlike in other regions, no blending of grape varieties takes place during the wine-making process. For white wines, the grape varieties used are Chardonnay and Aligoté, which account for **% and *% of all grape varieties respectively. For red wines, Pinot Noir and Gamay account for **.*% and *.*% respectively. Finally, there are other grape varieties that we find more marginally, such as Sauvignon, César, Pinot Beurot, Sacy and Melon, accounting for *% of the total.
Distribution of grape varieties in Burgundy vineyards France, ****, as % of total Source : Vins-Bourgogne Distribution of grape varieties in Burgundy vineyards - White wines France, ****, % of total Source : Vins-Bourguignon Distribution of grape varieties in Burgundy vineyards - Red wines France, ****, in % Source: ****
4.3 Appellations and geographical distribution of Burgundy wines
The Burgundy region is distinguished by its geographical diversity, divided into four distinct areas. The Chablis region is renowned for its elegant dry white wines, characterized by their distinctive minerality. The Côte de Nuits, stretching from Marsannay to Corgoloin, is mainly planted with Pinot Noir and boasts some ** appellations. It includes villages of unrivalled prestige such as Gevrey-Chambertin, Vosne-Romanée, Nuits-Saint-Georges, Chambolle-Musigny and Vougeot, as well as illustrious crus such as Romanée-Conti, Chambertin and Musigny.
The Côte de Beaune, stretching from Ladoix-Serrigny in the north to Chagny in the south, is renowned for its "grands blancs", with famous crus such as Corton-Charlemagne, Meursault and Montrachet. However, it also offers superb red wines, in particular the grand crus of Corton, Pommard and Volnay. The Côte Chalonnaise, stretching from Chagny to Saint-Gengoux-le-National, offers top-quality red and white wines, including Rully, Mercurey, Givry and Montagny. Finally, the Mâconnais, between Tournus and Mâcon, is renowned mainly for its Chardonnay-based whites, in particular the famous Pouilly-Fuissé.
When it comes to the hierarchy of Burgundy wines, there are four distinct levels. at the base are the regional appellations, which encompass wines from vineyards throughout Burgundy, such as AOC Bourgogne, Bourgogne-Aligoté, Crémant-de-Bourgogne ...
5 Regulations
5.1 Regulations
The label
Wine labels must include * compulsory statements:
the sales name wines with a geographical indication (***) actual alcoholic strength by volume origin nominal volume name of bottler batch number allergens
For sparkling wines, the sugar content is added, and for wines with a GI, the requirements may vary.
There are also regulated and unregulated optional indications.
[***]
The expressions traditionally used in Burgundy (***) may only be used under the conditions laid down by national and/or European law. They may be used anywhere on the label.
Exports
Wine exports are strictly controlled, and regulations on this subject are based on ** main points:
approved warehousekeepers approved exporter status approved economic operator status circulation of wines destined for foreign markets declaration of exchange of goods suspensive export tax regime customs warehousing tariff species origin value / Incoterms
[***]
The "Bourgogne" Appellation d'Origine Contrôlée (***)
Only wines meeting the fixed conditions detailed in an INAO (***) document can benefit from the "Bourgogne" AOC, recognized by the decree of November **, ****. It goes on to detail the precise geographical areas in which wines may be produced to qualify for the appellation, the grape varieties from which they may be made, and the rules governing vineyard management, grape ...
6 Positioning the players
6.1 Segmentation
- Maison Jean Loron
- Maison Joseph Drouhin
- Domaine de la Romanée Conti
- Maison M Chapoutier
- Veuve Ambal (Piffaut)
- Famille Piffaut
- Mercurey Vins de Bourgogne
- Les Grands Chais de France
- Nicolas (Castel Groupe)
- cavavin
- Caves de Rauzan
- Inter Caves
- Les Vignerons d'Igé
- Les Vignerons de Mancey
- Bailly Lapierre
- Cave Henry de Vezelay
- Cave des Grands Crus Blancs
- Albert Bichot Maison - Hospices de Beaune
- Cité des Climats et des Vins de Bourgogne
- Cadus Tonnellerie
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