From noble rot to bull’s blood: Wine in Hungary

A quick guide to Hungary’s viticulture sector

Picture of a vineyard in the Balaton region in Western Hungary.
©Zoltán Szászi
Vineyard in the Balaton region in Western Hungary. The period of transition that started with the end of socialism and the introduction of the free market was marked by the reappearance of small estates in Hungarian wine production.

The first weekend of October arrived with sunshine and pale blue skies. But a cool breeze blows in the rows upon rows of green grape vines stretching over hill sides, mounds, the foothills of mountains and the sides of dormant volcanoes all over Hungary as the work tirelessly continues in the vineyards. It’s grape harvest season and hundreds of thousands of tons of grapes are finding their way to press houses. The harvest, which started in August with the earliest ripening varieties will be mostly concluded in the coming weeks but some grapes will be still on the vines when the first frosts set in by the end of November.

Hungary’s viticulture, a source of national pride, started with (or maybe even before) the Roman Empire. The country’s most famous variety, Tokaji, an aszú (wine made from raisin-like, lately harvested grapes that already started turning with noble rot) was first attested in the 15th century as the drink of kings and queens. However, the destruction left by the two World Wars in the 20th century, and the subsequent collectivization in Socialist Hungary disrupted viticulture traditions in the country and since the 1990s, Hungary’s wine sector has been dominated by way-finding and tradition-building, domestic producers aiming to move from the low-quality production of state-owned collectivized companies to the knowledge-heavy, high added value production of small estates.

A map of Hungary's wine regions
©Tyk
Wine regions of Hungary: 1. Sopron 2. Nagy-Somló 3. Zala 4. Balaton Uplands 5. Badacsony 6. Balatonfüred-Csopak 7. Balatonboglár 8. Pannonhalma 9. Mór 10. Etyek-Buda 11. Ászár-Neszmély 12. Tolna 13. Szekszárd 14. Pécs 15. Villány 16. Hajós-Baja 17. Kunság 18. Csongrád 19. Mátra 20. Eger 21. Bükk 22. Tokaj-Hegyalja

Wine production – Basic figures and driving factors

Hungary has five major wine districts, sub-divided into various smaller traditional regions: These are the Balaton, Danube, Upper Hungary, Northern Pannon, Pannon (after the Roman province Pannonia which loosely translates to modern Transdanubia), and Tokaj regions. These wine regions greatly differ in size – The average size is 2900 hectares but with a +/- 43% standard deviation. Put together, this year the country is expected to produce 3.5-3.6 million q (hundredweight, 350-360 thousand tons) of grape produce and around 2.2-2.6 million hectoliters (220-260 million liters) of wine.

With the end of collectivization and the introduction of the market economy in the 1990s, the transition into small estate structure started. Various factors started driving innovation. One, the market started shifting, with the demand for quality wine increasing and two, wine tourism started to gain traction which led to the evolution of local tourism catering at traditional wine regions. Altogether, this increased competition within the sector but also with the industries of other alcoholic beverages (notably, beer).

In the 2000s decade, wine production went through a decade of decline, with a decrease in land area in cultivation and output figures. Since the 2010s, the annual amount of production has been increasing again, however, vineyard owners have to face various challenges due to the changing climate and other natural factors – Including plant diseases (more on this in our September 19 Newsflash) and pests (find out more in our August 28 Newsflash). A recurring challenge is the unpredictable and disastrous weather patterns brought about by climate change. Instead of a steady, gradually warming spring period, most seasons see major swings in temperatures and weather in the spring – Weeks of warm weather followed by spring frosts (see our article on this here). This year alone, 15-20% of the harvest has been lost to the mercurial weather.

White grapes Red grapes
Variety Area (ha) Ratio Variety Area (ha)
Bianca 4757 10,55% Blaufränkisch 7229 37,92%
Cserszegi fűszeres 4275 9,48% Cabernet Sauvignon 2690 14,11%
Welschriesling 3988 8,84% Merlot 1973 10,35%
Furmint 3883 8,61% Zweigelt 1744 9,15%
Chardonnay 2586 5,73% Cabernet Franc 1370 7,18%
Müller-Thurgau 1729 3,83% Pinot Noir 1094 5,74%
Hárslevelű 1610 3,57% Blauer Portugieser 1050 5,51%
Pinot Gris 1601 3,55% Blauburger 434 2,28%
Aletta 1550 3,44% Kadarka 371 1.95%
Irsai Olivér 1491 3,31% Syrah 214 1,12%
Total 45090 100% Total 19061 100%

Usually, around two-thirds of vineyards are planted with white varieties and only one-third with red grape. In recent years the most prominent white grape has been Bianca because of its high yield and simple production method requirements, followed by more traditional varieties like Cserszegi fűszeres, Welschriesling, Furmint and the globally recognized Chardonnay. The leading red variety is Blaufränkisch, which accounts for more than one-third of red grape plantations, followed by Cabernets, Zweigelt, Merlot and Pinot Noir.

A chart of total wine production figures in Hungary in the past decade.
©National Wine Community Council
Source: https://www.hnt.hu/statisztikak/

The structure of the domestic industry

At first glance, the wine sector in Hungary seems to be very concentrated as 68-70% of all wine is sold by the top 25 producers. However, the sector is in fact very deconcentrated. 49% of grape producers sell their produce directly instead of engaging in wine production. Small estates dominate cultivation, with the average parcel size being 0.48 ha, and 72.81% of vineyards directly used by the owners. Out of the total 58-61 thousand ha of land in wine grape cultivation, 46 thousand is used for commercial production (reselling). Interestingly, in when owners use their own produce in wine production, the average yields of vineyards are much higher (8.64 metric tons/ha), than in the case of vineyards harvested for reselling (6.6 t/ha).

In Hungary, the basic self-governing local unit of the wine sector is the “wine community”. (Hegyközség, literally: “hill community”) There are 104 wine communities throughout the six major districts, governed by region by 22 wine region community councils, which together make up the major domestic industrial alliance of the sector, the National Wine Community Council

A chart of the total area changes in grape cultivation in Hungary in the past decade.
©National Wine Community Council
Source: https://www.hnt.hu/statisztikak/

Aside from domestic consumption, the supply of the hotel and catering sector, and domestic and international tourism, the Hungarian wine industry’s other major source of income is international trade. Most of Hungary’s wine export goes to the neighboring countries in the region, but Hungarian wine is exported globally to markets ranging from the United States and Mexico through Nigeria to China. In 2019, Hungary exported ca. 1.108 million hectoliters of wine. In terms of quantity, the largest buyers were Slovakia (308.5 thousand hl), Germany (187 thousand hl), the Czech Republic (178.7 thousand hl), Lithuania (91.6 thousand hl), and the UK (70.5 thousand hl). In 2019, the domestic wine export balance was €86.8 million (€109.3 in wine export, €22.5 million in import).

The challenges that the sector is facing today affect the output of the industry as well. In recent years, the price of Hungarian export wine decreased and has fallen behind the prices of the products sold by the Austrian, Croatian and Slovenian competitors. The Ministry of Agriculture’s Digital Agriculture and Wine Sectoral Strategies provide governmental support for the further modernization of the industry. However, the challenge lies in increasing of the knowledge and technology level employed in wineries.

An area of potential development is the upgrading of plant protection materials employed in grape cultivation. New diseases like the Flavescence dorée, spread by the American grapevine leafhopper, can lead to crop damages up to 40-50%. This also opens up new opportunities for new kinds of equipment, pest control and monitoring technologies in the Hungarian market as producers are more and more forced to innovate.

Meanwhile, the National Wine Community Council has been putting into place stricter regulations in order for producers to invest in higher quality propagation materials and also to incentivize green solutions. According to professionals in the sector, grape propagation materials are in grave need of further development in Hungary. With consumers’ increasing demand of characteristic, diverse varieties and environmentally friendly products, a new generation of winemakers now need to increase the quality and improve the perception of their products. One possibility for this is to join the growing trend of organic wine production.

Photo of grapes on the vine.
©Matthias Böckel
In 2020, Hungary is expected to produce 220-260 million liters of wine - Grape crop losses caused by the spring frosts were 15-20% on average.

An area of potential development is the upgrading of plant protection materials employed in grape cultivation. New diseases like the Flavescence dorée, spread by the American grapevine leafhopper, can lead to crop damages up to 40-50%. This also opens up new opportunities for new kinds of equipment, pest control and monitoring technologies in the Hungarian market as producers are more and more forced to innovate.

Meanwhile, the National Wine Community Council has been putting into place stricter regulations in order for producers to invest in higher quality propagation materials and also to incentivize green solutions. According to professionals in the sector, grape propagation materials are in grave need of further development in Hungary. With consumers’ increasing demand of characteristic, diverse varieties and environmentally friendly products, a new generation of winemakers now need to increase the quality and improve the perception of their products. One possibility for this is to join the growing trend of organic wine production.

The domestic wine market

According to recent market studies, Hungarian domestic demand can be categorized into various groups according to consumer behavior. Gourmet consumers (18%) enjoy a high societal status, consume wine relatively frequently and demand higher quality products. Selective consumers (25%) also demand higher quality and are more experienced wine drinkers. Average consumers (32%) make up a heterogeneous group and the demand for higher quality and selection is low. Jaded consumers (26%) mostly have a demand for alcoholic beverages generally, and easily switch to substitute products.

Photo of glasses of rosé wine
©Karolina Grabowska
With the advent of e-commerce, Hungarian consumers are more and more willing to do their wine shopping online.

According to another study, consumers who regularly drink wine can also be divided into five behavioral groups which reliably follow societal patterns. Social novelty seekers (31%) usually have a high level of education, are interested in novelty products, and have a higher than average income and spending. Price sensitive consumers (27%) have a lower level of income. The major shaper for their choice is price and they often take advantage of sales. Foreign fans (3%) have a high level of income, and they generally have a negative attitude towards every domestic product. They have the highest level of spending and primarily favor Italian wines. Uninterested, skeptical (7%) consumers are not loyal wine enthusiasts, are rural, young to middle-aged, a high percentage of them are single, and have an average income. Novelty avoiders (31%) have a low level of consumption, are uninterested in wine culture, have a lower level of income and there is a higher concentration of senior citizens in this group.

Another development in the Hungarian wine market is the growing trend of online wine shopping, an adaptation to the current pandemic situation. Studies done in the first wave of the pandemic show that Hungarian consumers are overall comfortable with online shopping and with the expanding opportunities in online commerce, it is now possible for foreign wines to reach novelty-seeking consumers who are interested in gastro culture and wine specialties.

A bottle of Tokaji Aszú wine
©Zsanett Mezei
One of the best known Hungarian varieties, the Tokaji Aszú is a globally recognized brand - But it will take more than tradition and well-known names to keep Hungarian wines in the game in the future.

Conclusion

Hungarians are proud of their country’s historic wine traditions. The sector however, faces various challenges today. Viticulture in Hungary is still going through an era of way-finding and tradition-building after the disruptions of the last century. The changing weather and consumer attitudes domestically and internationally are also factors that the industry needs to adapt to.

The changing climate and environment, the incentives to move more towards green solutions and also changing consumer attitudes are now showing new avenues for innovation in the sector.

Investing in new plant growing technologies, fertilizers, specialized equipment and precision tech can be very costly, however, precision agriculture has been the buzzword in Hungarian agriculture in 2020 and because of the challenge to the sector posed by the COVID-19 pandemic, the government has allocated €6.1 million for temporary subsidies to aid the wine sector.

Hungarian wine production has well-established varieties and brands that are known and sought-after in the larger region. Tokaji is a globally recognized brand of dessert wine, and is similar to the well-loved varieties of ice wine. Bull’s Blood, a loose brand for typical red blends out of the Eger region is known for its robust character. While global varieties like Cabernets, Bianca, Chardonnay make up for a large portion of wine production in the country, uniquely Hungarian varieties like Cserszegi fűszeres, Ezerjó, Furmint are also favored.

Today, wine is irrevocably coupled with gastro culture, but also with rural and cultural tourism. Consumers are more and more demanding of environmentally friendly, organic products. As the sector in Hungary is still rebuilding, these changing times present challenges but also possibilities for innovation for Hungarian viticulture.

Picture credit:
“Wine regions Hungary” by Té y kritponita via Wikimedia
Wine production statistics: National Wine Community Council
“Tokaj” by Zsanett Mezei via Pixabay 
"Opening wine" by Karolina Grabowska via Pixabay
“Grapes" by Matthias Böckel via Pixabay