Wine in the out-of-home sector holds, but slows. Sales grow with high-end. White wines advance

The loss of purchasing power, changing consumption, healthiness, competition from other beverages, an aging population, less interested young people, not infrequently very high mark-ups in restaurants and bars: there are many elements that are slowing down the wine market, in Italy and beyond. And if in Italy, the large-scale retail sector is slowing down in volume, with values sustained almost only by inflation, while some more positive signals, although far from solid, come from exports in the first 5 months of 2024, as Circana and Istat data, analyzed by WineNews, say, the reading of the out-of-home sector in Italy, a channel that is always very important, and which, especially in summer, is the master thanks to tourism, is more varied. And here, there are those who see little in the way of positives, and those who point to a growth in sales, perhaps, however, mainly thanks to the high-end wines on which they focus, and often foreign, Champagne in the lead. While Italian wines sometimes hold up, more often they slow down, even for the most emblazoned appellations, while there is an increasingly clear advance of whites over red wines, even net of summer seasonality. Extreme simplification of a much more complex picture, which comes from WineNews interviews with the heads of some of the most important high-end distribution companies in Italy, such as Marcello Meregalli, at the head of Gruppo Meregalli, Carlo Alberto Sagna, at the top of Sagna, Edoardo Freddi, ceo Edoardo Freddi International, and Luca Cuzziol, at the helm of Cuzziol Grandi Vini and the Excellence Company, which brings together 21 major names in the sector, from those already mentioned to Pellegrini, Balan, Sarzi Amadè, Vino Design, Teatro del Vino, Proposta Vini, Bolis, Les Caves de Pyrene, Premium Wine Selection Pws, Ghilardi Selezioni, Visconti 43, Première, Agb Selezione, Apoteca, Ceretto Terroirs, Philarmonica, Spirits Colori and ViteVini.
“As far as our company's specific observatory is concerned”, Luca Cuzziol explains, “we sell both Italian and foreign wines, and in all honesty, Italian wines, unfortunately, are the ones that suffer a bit more out of the total. So if our company actually closed the first seven months with virtually stable sales volumes on 2023, with a slight contraction in volumes, and a slightly higher average price, not due essentially to price list increases, but to the fact that there is a tendency, at least for a part of the market to go in search of slightly higher wines, what we actually also notice is that Italian wine by itself, on its own, suffers a little more than foreign wines, in this sense”. For Cuzziol, however, it is excessive to speak of a real crisis. But there is certainly “a slight contraction in the high-selling tourist areas, and so this means that even products of great quality and high demand, such as Barolo has been, or Etna, more recently, tend to begin to suffer. And while for the former there may be a context of seasonality, for the latter I would venture to say there is also a context of positioning, which can be traced to the system of working on these fine Italian wines. The mark-ups on wines in restaurants”, Cuzziol points out, “have gone up. And this is due to the fact that the restaurateur probably does not have the opportunity to increase the price of a cacio e pepe, or of a veal returned more, since we are now in August, while on wine he tries to recover, perhaps, some marginality points”. But this, playfully, discourages consumption in a certain price range. Suffering less, Cuzziol confirms, are white wines, partly because “they are more versatile and transversal, good for an aperitif or an apericena, as well as for more classic meals”.
“I get the idea that there is a “perfect storm” in some respects: young kids are drinking less wine, and maybe looking more at cocktails; the restaurant industry has a stance on wine mark-ups that slows things down a bit; the loss of purchasing power of salaries undoubtedly doesn’t help”.
More positive tones, but with a not-too-different reading, are, on the other hand, those of Marcello Meregalli: “we are among those who hope and believe to grow a little toward the end of the year, let’s say by +5% in sales. In the first seven months we are positive with the wine part and slightly negative instead with the spirits part. Thanks to the recovery of Champagne, but also the big Italian wines are not having problems, they are working well, so the most important Denominations or the various Super Tuscans. Also, for us, Bordeaux is a beacon that has been a little bit extinguished, and beyond Petrus and Lafite, with which we work directly with the estates, we have left a little bit aside buying on the Place of Bordeaux, despite the lowering of prices this year, because there is not this great market euphoria. Always good in Burgundy, very good in whites in general, Italian and foreign, but not only”. Further confirmation, from Meregalli's words, of the growth of whites over reds. “But also of wines, in general, with lower alcohol contents, which especially young people demand more, in a market segment that we will cover more in the near future”. In general, Meregalli goes on to explain, for the higher-end wines, which range from 50 euros and up on the list, there are no particular problems, while those that struggle the most, between 25 and 50 euros, and the lower-end wines, which are those that have felt the economic hardships of many people the most, are nonetheless beginning to show some small signs of recovery.
With a few different nuances, the complexity of the situation-not euphoric, but not dramatic either, overall-is highlighted in the words of Carlo Alberto Sagna. “If we look at the performance of the first 7 months 2024 on 2023 and also on 2022, years of great euphoria post-Covid, it is clear that we are below. But we knew that the anomalous growth we have seen in these years would come to an end, and if we compare with 2019 we are still clearly up. We are probably facing a physiological decline after a very strong rebound. If we then talk about a crisis in the future, it will certainly be a more structural crisis, not only in the world of wine, linked to so many other aspects”. One aspect emphasized by Sagna, in confirming the great growth of white wines compared to others, is instead the rationalization of supply and selection, by restaurants and wine bars, of references, after the boom in supply in recent years. With brand value being increasingly important, even more so than the issue of price, which obviously affects. “We try to focus on the medium-high end, as a clientele”, Sagna explains, “and therefore also as a proposition in our wine portfolio, and the brand matters. And what we see is that we are going in a direction where we are refocusing more on what are the established brands, which give more security and continuity of quality to the consumer”.
Also providing analysis, is Proposta Vini, which aims to end the year with a revenue growth of between +4% and +6%. “The trend of total turnover in the January-June period of this 2024 is in line with last year (+0.11%). March, May and June were the slowest months, due to the unstable weather situation that in most of Italy delayed the start of the summer season, while we recorded a good performance in January, February and April”, notes Gianpaolo Girardi, founder of Proposta Vini. The delayed outbreak of summer, especially in northern Italy, strongly marked consumption in “big cities and tourist areas, which suffered a lot in June. At the regional level, the Trentino side of Lake Garda, for example, recorded a 20% contraction, while the other areas of the province of Trento were -4%. After declining in June, the sales trend returned to growth in July, marking +14%. Still wines in value terms are in line with the previous year (-1%), while bubbles and Champagne are down. The performance of spirits is very good, recording +40% in value. Apart from grappas, which continue their downward trend (-9%), all other categories are growing: gin (+60%), bitters (+84%), and liqueurs (+73%)”, Girardi specifies. In such a difficult context, “maintaining our positioning and sales trend in line with 2023 is very significant for us, demonstrating the great work we have been doing daily, for more than 40 years, to enhance the excellence of our producers and to ensure the highest level of service to our customers”, concludes the founder of Proposta Vini.
While exports of white wines and reds rebounded in the first four months of 2024 with some positive numbers, for Edoardo Freddi International the light at the end of the tunnel is still far away. The exploit of the first months, especially January and February, is almost entirely due to requests from Russia. Starting next May, new excise taxes on spirits will be introduced, so Russian distributors have preferred to anticipate future cost increases by stocking up on wines, primarily Italian ones. More or less the same reasoning can be made for Japan, the other major buyer of Italian wines in this early 2024. Indeed even here a law, in this case a trucking reform that will impose a lowering of the maximum working hours of truck drivers and couriers, has convinced the Japanese to import much more wine. However, some glimmer has begun to be seen, partly for red wines for which 2023 had really been an “annus horribilis,” but especially for whites and in particular for bubbles “which will remain the most exported even throughout the summer of 2024”, according to ceo Edoardo Freddi, “or foreign tourists love to consume these wines in agritourisms and hotels between dinners and aperitifs when they come to Italy for vacation and then they do not forget them when they return to their own country. A further consideration should be made, namely the increase in the consumption of wines with low alcohol content low alcohol which is a growing trend in Italy, but not only, and therefore wines such as Pinot Grigio, Timorasso, Vermentino and Trebbiano d’Abruzzo attract more and more”. And for Edoardo Freddi, “in the summer of 2024 the number of foreign tourists who will come to visit our beautiful cities and eat in our restaurants will grow, and therefore despite a period that is far from rosy for exports in general, the percentage, on the summer of 2023, of the influence of tourism on the export of Italian wines will increase. And, according to an estimate by our Observatory, in 2024 at least 34% of exports will be influenced by tourism”. Finally, the ceo concludes, “if Prosecco is ahead of everyone as well as other bubbles, other wines, including some reds, are also catching up. We continue to cover all regions of Italy with our exports, from North to South, hoping that the positive data will be confirmed in the coming months. In the current summer, despite the problems related to wars and climate change, we are seeing growth ranging from +8% to +27% over the same period last year (June and July 2023 vs. June and July 2024)”.