Wine: domestic market slows down large-scale distribution (-7% in volume and -3.5% in value)

As widely predicted, the slowdown in wine sales in Italian large-scale retail continues. But it no longer depends only on the recovery of out of home after the pandemic, which had shifted some of the consumption. Now the weight of inflation is also beginning to be felt. And so, according to the Uiv-Ismea Wine Observatory on Ismea-Nielsen data, in the first 9 months of 2022, purchases on the shelves of large-scale distribution and retail, over the same period of 2021, fell in volume by -6.9% (to 5.6 million hectoliters, below even pre-Covid levels), the equivalent of 55 million fewer bottles. The value balance is also down (-3.5% to 2 billion euros), despite the fact that the average price gradually rose by +7% in the second and third quarters. “And it is precisely this price growth, dictated exclusively by an inflationary push, however, still underestimated compared to the real cost surplus charged by wine businesses, that - according to the Observatory - is ballasting sales, in anticipation of an even more difficult autumn-winter for Italians”. And if then until now the restaurant segment, with the boom in tourism from abroad, has also managed to drive the wine market, the off trade, according to the Uiv-Ismea Wine Observatory, is beginning to show the first signs of difficulty, starting with its most representative wine products.
Going into detail, sales in large-scale distribution show a drop in volume for all types of wines, with still wines at -7.5% while sparkling wines pay less (-2.2%) thanks to double-digit growth in the increasingly significant segment of “low cost” dry sparkling wines, which maintained an average price 30% lower than the category average. Among still wines, Uiv-Ismea elaborations show negative volume peaks for reds (-9.2%), while whites stopped at -6% and rosés at -3.8%. Those most affected by consumption reductions are PDO wines, which close the first nine months at -8.7% (which becomes -11.5% for reds), compared with -8.1% for IGTs, while ordinary wines close the balance at -6%. Very few green-lighted appellations among volume sales, not surprisingly those that kept their prices substantially unchanged or even decreased (Castelli Romani, Oltrepò Pavese, Barbera, Nobile di Montepulciano, Vermentino di Sardegna). Above-average drops, however, on sales volumes for some of Italy's most important appellations, such as Prosecco (-8.5%), Metodo classico sparkling wines (-10.4%), Chianti Docg (-11.5%), Montepulciano d’Abruzzo (-9.7%), Barbera (-15.9%) and Lambrusco. Among Typical Geographical Indications, significant reductions also for Puglia Igt, Terre Siciliane, Lambrusco Emilia, Rubicone Trebbiano.
Also down is the niche of organic wines (they account for just over 1% of the total in volume), not only in terms of bottles consumed (-2.3%), but especially in value generated (-5.9%), despite a 4% list price filing (€5.19 per liter). Also down was e-commerce, whose momentum stalled in both volumes (-15%) and values (-23%, to 34.7 million euros).
“The sales data”, stressed Fabio Del Bravo, Ismea’s Rural Development Services Manager, “tell us that the responsiveness of wine purchases to price has become high, while the sentiment surveyed by Ismea as part of the quarterly survey on the climate of confidence among operators in the wine supply chain shows a worsening of judgments on the future evolution of the economy and also on the tightness of future orders. If the pressure on the cost side does not ease, in the impossibility of transferring price increases downstream, the supply chain could for the first time in years enter difficulties on the domestic front”. “So far, the supply chain has managed to keep price dynamics under control as far as possible”, said Unione Italiana Vini - UIV secretary general Paolo Castelletti, “and it should be acknowledged that distribution has done its part. It would be more desirable than ever to keep price lists in balance even in the coming months, when the purchasing power of families will be further reduced due to energy costs, food and basic necessities”.