November 23, 2018 / 11:07 AM / 23 days ago

Organic wine market growing fast but to remain niche: study

PARIS (Reuters) - The market for organic wine will grow rapidly in the next five years as environmentally-conscious consumers increasingly favor pesticide-free wines, but their market share will remain relatively small globally, a study showed.

FILE PHOTO: Organic wines for sales are seen in a wine rack at Moevenpick Weinkeller wine shop in Berlin, Germany, October 15, 2018. REUTERS/Fabrizio Bensch/File Photo

In a report released on Friday, wine and spirits consultancy IWSR forecast global sales of organic still wine will top 1 billion bottles by 2022, up from 676 million last year and nearly three times the 349 million bottles sold in 2012.

Growth in the five year period from 2017 to 2022 will be driven by the United States with a more than 14 percent rise followed by South Africa and Norway at 13.5 percent.

The share of organic wines - those produced on vineyards cultivated without chemical pesticides or fertilizers - of the global wine market would remain relatively low at 3.6 percent, compared with 2.4 percent in 2017, IWSR said.

“There is a big margin for organic wine to keep rising,” Jose Luis Hermoso, research director at IWSR told Reuters.

This is good news at a time when global wine consumption is stagnating, even declining in key markets such as France and Spain, he said.

Nearly four bottles out of every five of organic wine sold last year were in Europe, with the three leaders Germany, France and the UK accounting for 50 percent of the market, IWSR said.

In France, the surge in organic wine sales is particularly strong, with the market share seen reaching 7.7 percent by 2022.

Chateau Latour, one of the most prestigious Pauillac chateaux in the Bordeaux region, property of French billionaire Francois Pinault since 1993, obtained its certification as organic wine last month.

But other producers have abandoned their organic projects, often discouraged by growing criticism of the use of alternative pesticides such as copper and sulfur, permitted under organic farming rules, or after their unprotected vineyards were damaged by fungi attacks.

Hermoso said there was uncertainty among European producers about whether to continue using sulfur and he added that mildew did significant damage to the harvest in some regions.

Conversions of vineyards to organic wine in the main producing countries has slowed down recently and IWSR estimates that in 2022 there will be 545,000 hectares dedicated to organic wine in the world, compared to 408,000 hectares in 2017 and 284,000 in 2012.

Editing by Alexandra Hudson

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