Italian wine cooperatives and the future, including climate, costs, logistics and access to credit

It is not only the climate crisis and the change in consumption, first and foremost that of the new generations, that is worrying the world of wine because, the set of issues also includes determining factors such as rising raw materials and inflation that undermines the purchasing power of families. They speak of “a narrow path, from which to get out quickly”, the Italian Wine Cooperatives, which summarize in this way a complicated moment but which, at the same time, confirms all the importance they have in the market, just consider (see focus) that in the ranking of the main Italian wineries by turnover by journalist Anna di Martino, there are as many as 40 cooperatives (out of a total of 117) that invoice 3.7 billion euros. All this cannot hide, however, the critical issues that continue to undermine the competitiveness of companies and that risk, in the long run, having impacts on the sector’s supply chain as well. “The number one problem is called the cost of money, to which is added the soaring cost of raw materials, which is still not registering consistent reductions”, explained Luca Rigotti, president of the Wine sector of Confcooperative (and at the top of the Trentino Mezzacorona), today in Milan, at the conference organized by Confcooperative Fedagripesca, with Regione Lombardia. “On the budgets of companies”, Rigotti stressed, “still weigh the long wave of the increase in production costs, to which are added the inflationary effects and, above all, the rise in the cost of money that is also heavily impacting the spending power of families, a factor that also has negative repercussions on wine consumption”. For the president of Confcooperative’s Wine sector, the difficult scenario that wine is going through represents “a structural crisis, not a conjunctural one, with different impacts on products and production areas. Also weighing in are climate changes that make it increasingly difficult to do viticulture”.
The Censis study “Italian wine confronts a not easy conjuncture” was presented in Milan, where various aspects were put under the lens. Starting with the effects of raw material costs with the global logistics crisis that has created major delays in the supply of raw materials and semi-finished products, leading to soaring prices for many products. Between 2020 and 2023, for example, wood packaging for the wine sector rose 28.2%, cork 14.8%, and paper packaging 31.7%; the latter, along with wood packaging, initiated a price reduction between 2022 and 2023. Glass (and thus bottles), on the other hand, have followed an increasing trend since 2021: +20.4% between 2021 and 2022, and +25.3% between 2022 and 2023. On balance for the past four years, the increase in the price of glass has exceeded 50%. And then there is the export slowdown and the Suez Canal crisis. If in recent years the purchase of Italian wines from foreign countries has always maintained a positive sign, between 2019 and 2023, in fact, the increase in exported value was 20.8%; over a longer period, 2013-2023, the growth was 54.2%, and only in the last year is there a negative sign, however less than a percentage point (-0.8%). Compared to total exported wines, sparkling and semi-sparkling wines remain on a growth trajectory (7.5% and 3.3%, respectively), while PDOs and PGIs (-0.6%), communes and varietals (wines without PDOs or PGIs designated with the name of the grape variety, -2.5%), and still wines (-3.2%) lose ground.
In recent months, a more critical scenario for Italian exports in general and wine exports in particular has loomed, according to the Cooperatives. Looking at wine demand trends by destination areas, between 2022 and 2023 only in Europe is there a positive growth rate, reaching 3.6%. In all other areas, the sign remains negative: -9.7% for Africa, -6% for the entire American, Northern and Central-Southern Continent, and it is around 12% reduction in value in Asia and Oceania. Again, the retrospective and longer-term view proposes a decidedly favorable trend for wine compared to the contingent moment. Between 2019 and 2023, the 25% increase in exports to Europe is matched by a strong increase in the value exported to Africa (51.6%, albeit on a modest starting basis), the Americas (+15.4%), Asia (+9.6%) and Oceania (+11.7%). Overall, the value of exported wine grew by 20.8% in the five years under consideration. But from the point of view of potential market coverage and new opportunities to be seized or situations to be consolidated in other areas of the world, a recent negative drift is reported on precisely those destinations that were gaining an interesting dimension. The last months 2023 were marked by serious events involving commercial sea transport, in the routes based on the Red Sea and Suez Canal passage. The uncertain scenario in the Middle East area had an immediate backlash on the cost and time of transportation, curbing the demand for goods in the traffic between the West and the East, forcing the revision of routes and forcing the crossing through the Cape of Good Hope. The wine sector and its exports, have not remained sheltered from these events, and the detail of what has happened in some countries confirms the loss of newly won market space. Vietnam, for example, went from 12 million wine purchases in 2019 to 25 million in 2022, and then reduced to 16 million in 2023 (-33.9%). South Korea had gone from a demand of 33 million in 2019 to 76 million in 2022; in 2023 the amount dropped to 51 million (-32.5%). A similar trend is found for Thailand’s purchases: 11 million in 2019, 24 million in 2022, and 18 million in 2023 (a reduction over the previous year of 24.6%). Australia also reduced its spending on Italian wine: although it increased from 63 million purchased in 2019 to the current 73, in fact between 2022 and 2023 there was a decrease of more than 9 million (-11.2%). If we look at the total change in exports between 2022 and 2023 (0.8% less and corresponding to 64 million euros) we capture only part of the impact that materialized between one year and the next. Credit chapter. According to data from Abi, the rate charged in Italy to businesses for loans up to one million euros has risen from 1.75% in December 2021 to 5.72% in December 2023, Confcooperative Fedagripesca points out, recalling that “in the case of loans over one million euros, the rate of 0.89% in December 2021 has risen to 5.28% two years later. When compared with the average of Eurozone countries, the conditions practiced in Italy are more restrictive in both categories of loans surveyed”. In Ismea’s latest Congiuntura agroalimentare relating to the fourth quarter of 2023, it emerged, reads the note from Confcooperative Fedagripesca, that 30% of food industry operators had applied for and obtained a loan from banks in the last year, while 64% said they had not applied for one and 3% had been refused or had given up because of the prohibitive conditions proposed. Among those who did obtain credit, most operators (57%) approached the bank for medium- to long-term financing (over 18 months), mainly for the purchase of machinery and equipment (for 40%) and for the construction or re-structuring of buildings and/or facilities (24%). With respect to credit access conditions, 44% of food industry enterprises believe there has been a worsening between 2022 and 2023, mainly due to the high costs associated with bank credit applications.