This year was a rollercoaster for the wine industry. Natural disasters obliterated vineyards, large companies experienced major turnover, and scammers perpetuated distrust in wine retailers. But even as producers faced one of the most devastating harvests in recent history and drinking data continuously suggested that the industry was in decline, winemakers pushed through and looked toward the future.
The heavy investment in wineries this year signals that the industry’s major players aren’t losing faith in wine. In fact, some are willing to bet a billion dollars that certain California brands will continue to grow. It was also a big year for white wine, with several acquisitions of white wine-focused producers suggesting that the category might be the future of the industry.
Beyond the mergers and acquisitions, wine had some interesting run-ins with AI outwitting somms, and even a bizarre case of missing wines found in the basement of a TGI Friday’s. Read on to uncover eight of the biggest wine moments of 2023.
World wine production hit new lows
The climate crisis continues to pose a threat to the wine industry, and the extreme weather events this year pushed many regions to the edge. Chile had a particularly tumultuous year, with brutal wildfires sweeping through wine regions right before harvest in February. The fires impacted over 100,000 hectares of land, and caused irreparable harm to prized old vines in the Itata and Biobío regions. Italy also faced challenging weather in 2023, with rain, fire, and surging temperatures all contributing to a cut in production volume. Winemakers were reporting that they expected 2023’s harvest to be up to 14 percent smaller than the previous year.
Beyond the devastation in Chile and Italy, other regions also faced difficulties, from unprecedented frosts in the Finger Lakes to mildew in Bordeaux. Cumulatively, these conditions led to projections that global wine production in 2023 would be the lowest it’s been since 1961 — with total volume decreasing a whopping 7 percent from 2022 numbers.
Treasury Wine Estates made money moves
Treasury Wine Estates (TWE) made its 2023 intentions clear, with several closures and acquisitions signaling the company’s move away from the bargain wine market to expand its luxury portfolio. This move kicked off in July when TWE announced plans to close Australia’s Karadoc winery in 2024. The Victoria-based operation was one of the wineries that produced 19 Crimes, a decision no doubt connected to the decreasing global demand for lower-end wines.
Then in October, TWE said it agreed to purchase the popular California winery DAOU Vineyards in a deal worth up to $1 billion. The purchase is expected to help grow TWE’s high-end wine segment, as well as drive growth in key markets, including the U.S. and China. We shared our initial thoughts on the acquisition on the VinePair Podcast, and are anxious to see how it plays out.
Gallo bet big on white wine
E. & J. Gallo Winery made a statement with back-to-back purchases of prolific white wine producers this summer. On Aug. 29, the company acquired California Chardonnay powerhouse Rombauer Vineyards. Then, just one week later, E. & J. Gallo’s Luxury Wine Group disclosed plans to purchase Massican, an Italian-inspired winery based in Napa Valley. Since launching in 2009, Massican’s founder Dan Petroski has stood out among local winemakers for his exclusive production of white wines, a rarity in the Cabernet-focused region. As data shows that white wine is experiencing a resurgence, we can’t help but applaud Gallo’s well-timed efforts in this segment.
… and so did Duckhorn
The Duckhorn Portfolio Inc. followed suit in November, and reached an agreement to acquire Sonoma-Cutrer Vineyards — the third-largest luxury Chardonnay brand in the U.S. — from Brown-Forman. This purchase is set to help The Duckhorn Portfolio expand its luxury portfolio, and strengthen its white wine offerings as well. This further points to a developing trend toward high-end white wine in the industry.
High-volume regions cut back on wine production
As the popularity of cocktails and RTDs continued to soar, wine’s inability to connect with younger consumers dominated the conversation in 2023. The market’s withering enthusiasm toward bargain wines caused many high-volume wine producers to suffer, most notably Washington’s Chateau Ste. Michelle Wine Estates. Known for its large-scale production of wines in the $10–$15 range, Chateau Ste. Michelle has long been a key driver of the overall Washington wine economy. So when the company announced its decision to reduce grape purchases from growers by over 40 percent over the next five years, it had major implications for winegrowers across the state. As the largest winery in the Pacific Northwest, this decrease in production is sure to be a blow to Washington’s wine market.
Similarly, regions in the south of France had to cut back in production, and the country’s government even spent 200 million euros funding the destruction of surplus wine. Additionally, Bordeaux received 57 million euros to pull up 23,475 acres of vines in the region, offering to pay growers for the land they uprooted.
Wine still has a serious fraud problem
In 2023, widely-known wine counterfeiter Rudy Kurniawan staged a comeback to the wine industry. After being convicted for wine fraud and serving seven years in prison, Kurniawan is using his, uh, talents to recreate “fake” wines that can convincingly taste like real prestigious bottles for clients who wanted to try a Rudy Kurniawan original. Even though one of wine’s biggest scammers has allegedly gone straight, this year served to remind us that wine fraud is certainly alive and well.
Perhaps the most ridiculous scheme of them all was “luxury” wine company Ocean Fathoms, which claimed to have aged bottles of high-end wines and Champagnes under water for years off the Santa Barbara coast, and were selling them for a premium. But the Santa Barbara District Attorney charged the company for operating without a license to sell alcohol or permission to discharge products into U.S. waters early this year. Founders Emanuele Azzaretto and Todd Hahn pleaded guilty to misdemeanor charges for these actions as well as investor fraud, and the plea agreement called for the destruction of the bottles in question. This led to 2,000 bottles, valued at hundreds of thousands of dollars, to be destroyed in August.
And maybe even more concerning than the ridiculous ocean-aged wine scam was the takedown of one of New York’s preeminent luxury wine purveyors, Sherry-Lehmann. In May, news broke that the wine shop had allegedly failed to deliver $1 million in paid inventory to customers. This story came to a crescendo in July, when the FBI and New York City Police Department raided the store as part of an ongoing criminal investigation. In addition to the missing wines, Sherry-Lehmann owed the state $2.8 million in unpaid sales taxes.
Unfortunately, this pattern of fraud is becoming common among luxury retailers, as recently another story of missing bottles unfolded. It was reported that the Chelsea Wine Storage facility failed to deliver several orders, which resulted in severely distraught customers. Over $300,000 worth of bottles of Burgundy were reported missing, and in an odd development, some of the wines in question were found stashed in the basement of the Times Square TGI Friday’s.
AI came for somm jobs
AI left no industry untouched in 2023, as ChatGPT and similar machine learning programs boomed in popularity. In two interesting instances this year, it was reported that AI could pass three levels of the master sommelier exam, and could even guess prestigious Bordeaux producers with 100 percent accuracy based on chemical composition alone. Even though we’re pretty sure you won’t be seeing robot somms on restaurant floors anytime soon, some of these new technologies could be applied to detecting wine fraud in the future.
‘Brangelina’ took the fun out of rosé
This year we got an inside look at the unraveling of Brad Pitt and Angelina Jolie’s relationship via their battle over Château Miraval, the former couple’s Provence estate renowned for its pale pink rosé. The ongoing legal dispute heated up in July when Jolie’s former investment company, Nouvel, filed a claim that Pitt refused to treat it as an “equal partner” in decisions over the winery, and requested at least $350 million in damages. The company also called Pitt a “petulant child” and accused him of stripping and looting the winery’s assets to gain better control of the estate. This is why we can’t have nice things.
*Image retrieved from laplateresca via stock.adobe.com
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