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Red alert for wine consumption outside the home: -39% at the end of 2020, a ruinous December (-87%)

TradeLab estimates for Federvini. Boscaini said, “We need a “Marshall Plan” for the sector”. Mastroberardino: “an abyss is looming”
COVID, crisis, FEDERVINI, WINE, News
Federvini’s red alert on consumption away from home: -39% at the end of the year

End of year sales have always been worth more or less a third of the turnover for Italian wineries. This year, in the midst of a pandemic, forecasts for December 2020 are the worst they could possibly be. Out of home consumption is estimated at -87% for wine and -93% for spirits. December is usually the “salvific” month and this year instead, it seems destined to aggravate the already challenging situation. The end of the year loss is predicted at -39% for out-of-home consumption of wine, and -43% for liqueurs and the like. In addition, it should be emphasized that the out of the home channel is vital for most Italian producers, especially for the small and medium-sized companies. Plus, it is the channel where a large portion of higher quality and greater added value wines are consumed. This, then, is the very gloomy picture that emerged from the study TradeLab carried out for the wine federation, Federvini. According to TradeLab, “the previous semi-lockdown had given the final blow to the wines and spirits sector, the flagship of “Made in Italy” food, which almost halved their values in their main outlet: outside the home”.

The total value of out-of-home consumption for the wine sector in 2019 was over 2.3 billion euros, while this year the slowdown reduced that figure to 1.4 billion euro, or nearly -40%. Things have gone even worse for spirits, as the value in 2019 was 960 million euros and will be just over 540 million euros in 2020 (-43%). “These data make it clear that two of the sectors that have the highest added value of "Made in Italy" products, are on their knees”, said Sandro Boscaini, president of Federvini. “There are two entire production sectors at stake that need to be re-launched utilizing serious and wide-ranging policies. We need to start with streamlining bureaucracy and then consider a sort of “Marshall Plan” that will provide massive structural investments for digitalization and promotion. This is not the moment for individualism. Companies and political decision-makers have to team up to save an entire sector”, concluded Boscaini.

The study further revealed that the dramatic situation is very evident, considering the last two months in 2020. In November, wine sales will close at a loss of -84% and in December 2020, even -87%, while for spirits we are talking about -91% and -93%. “Wine, traditionally linked to conviviality and accompaniment to good food, has been negatively affected due to restaurants closing in the evenings, and more in general, due to restrictions placed on sociability and movement. The data speak for themselves, and the year-end projections are very troubling, especially in view of a particularly important moment such as Christmas holidays, which represent an opportunity for consumption, par excellence”, pointed out Piero Mastroberardino, head of Mastroberardino winery and president of Federvini’s Wines Group.

“There will undoubtedly be companies more or less penalized by this scenario, due to different business formulas. However, overall, for the entire wine sector, projecting a drop equal to -40%, means that there is an abyss looming, and that a more serious and consistent reactive strategy is required”, stressed Mastroberardino, “focused on two main tracks; that is, short-term interventions able to support companies in the most explosive contingency of the crisis, and medium-long term structural measures aimed at laying down the basis to re-launch and recover competition in the supply chain. It is essential that the institutions listen more attentively in order to maintain a deeply rooted and widely branched sector in the national community, and throughout the country”.
Significant differences exist between region and region. For instance, wines range from -42% a year in Lombardy to -34% in Molise, while for spirits, Lombardy is still the most penalized at -48% and the least is Apulia, settling at -38%.

“It is, undoubtedly, a very serious scenario that also severely affects the sector of aperitifs and spirits in the Italian tradition. These products are mainly consumed outside the home channel, for obvious reasons, at a reduced rate”, stated Marco Ferrari, CEO of Gruppo Montenegro. “The impact Tradelab has estimated, in other words, a plunge in value equal to -43%, involves unprecedented systemic damage. Our sector and the companies that represent it are proud of the role they play to create economic and financial value in the territories and in the connected supply chains. In order for them to be able to keep this role alive, we would need to intervene urgently and concretely by significantly reducing excise duties and eliminating unnecessary administrative burdens, including the tax stamp”.

It is the whole away from home world - the so-called HORECA (hotels, bars, restaurants) - that is in a profound crisis, from where it is very challenging to be optimistic. In this case, too, the TradeLab study numbers are self-explanatory. Compared to 2019, the so-called “Away From Home” channel has literally collapsed by over 40%, from 85 billion down to 50 billion euros in 2020.

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