Between market and harvest, the chaos of numbers: the words of Lamberto Frescobaldi

Many vintages with abundant cellar stocks started over the years. But the market was holding, and worries were not too many. This year, however, things are different. Wine, Italian and otherwise, seems to be undergoing a downsizing in consumption that, perhaps, is not just conjunctural, but deeper, and linked not only to a heavy economic picture in all major markets, from Europe to the U.S., which is holding back consumption of all luxury goods, including wine. What’s more, Italy is also reckoning not only with winery numbers as high as ever, but also with uncertain forecasts, between those who speak of sharp declines and those who even talk of production increase over 2022, in a chaotic picture, but also with many “gray areas”, on the data, so it is even more difficult to make realistic production estimates. Especially in a year like this where even the weather, between rains, downy mildew and great heat, with different situations from area to area, makes it even more complex. Also because “maybe many people don’t like what I’m saying, and it will make some people angry, but we always assume a harvest figure, and then when you get to the end there are always those 2, 3, 4 million extra hectoliters that, maybe, come from wineries that are not too accurate in their reporting, or from some table grapes that go from one side to the other. These are things that you can hardly tell, but they are in the eyes of the operators. Just saying them to you in this interview will bring me healthy criticism, but I will be happy to be refuted by numbers in hand”. Words from Lamberto Frescobaldi, at the head of one of the most important companies in Italian wine, such as the Frescobaldi Group, but also of Unione Italiana Vini (UIV), the largest “union” of the category, in a well-rounded chat with WineNews. That starts with a phrase: “there is no lack of wine, but there is a lack of market”. What does it mean?
“It means that there was a very sharp slowdown after the euphoria of the post-Covid era, which had led so many people to re-embrace the freedom lost in the pandemic. Then also accomplice to the rise in interest rates, the cost that families have for home mortgages, and anything else they buy, there has been a revision of spending for pleasure, such as going out to eat, appetizers and whatnot, and this has happened everywhere in the world. In the U.S., the rise in the cost of money has been even greater than here, and with very noticeable increases in the cost of going out, and this has brought a slowdown in consumption. Phenomenon that we had glimpsed a little bit last year, but we may not have fully understood. And, therefore, today, numbers in hand, such as those from Icqrf’s “Cantina Italia” as of June 30, we had a quantity of wine in the cellar that we have never had in the last 20 years, in the run-up to the harvest. This is undeniable, and you have to take note that things have slowed down more than we thought”.
It is true, however, that we also made many “headlines” over the years announcing a harvest kicking off with the equivalent of a production year in the winery. So one wonders why, from this point of view, there is more tension than in the past. And the answer is in the drop in consumption, but not only that, Frescobaldi explains. “A lot of countries that had become big consumers of wine like China, for example, has seen a slowdown in the economy, and therefore a cut in consumption of some volatile things, and we don’t like to hear this, but you can give up a glass of wine and nothing happens. And then everything is priced up. Even in our place, in a very popular place like Emilia Romagna, for example, where for a few euros you used to eat a piadina, today you spend as much as 10, and even if you go to eat a pizza with a glass of wine, in general, the expense is much increased compared to the past. And so a lot of families have got a rest, that’s a fact. And this aspect, combined with a “heavy” wine cellar, means that there is this concern”.
Another fact, however, is that wine, of crises and difficulties, has overcome many. Think of the financial crisis of 2007-2008, for example. But today, perhaps there is the thought that this crisis, which is also grafted onto broader issues such as healthism, for example, is deeper and structural, and not just conjunctural.
“I would hope not. Certainly, when you read that France is thinking about grubbing up vineyards, especially in the Bordeaux area where there is too much product”, says Lamberto Frescobaldi, “to the aid given in the Canberra area in Australia, where there are so many vineyards, to leave them unproductive, and you think about the fact that new big players in wine production have come up, such as China, which compared to 10 years ago is much more important, or South America, which has regained a lot of vigor, or India, which has flourishing local companies that then export, thanks to the Indian population, which has spread all over the world, we understand that today wine is a much more global product. Then it is clear that there are the niches, Bolgheri, Chianti Classico, Brunello di Montalcino, Montepulciano with Nobile and so on, but if I have to have an all-round vision as Uiv president I say that there are always exceptions that challenge certain reasoning, but today the rules of the game are much more complex than 15 years ago”.
Everything, in any case, starts from the vineyard. And speaking of harvesting, we are already at the end of August, the harvest has just begun (and concretely only in the sparkling wine territories), but already many, and different, have been the estimates, with more or less pronounced declines expected, and some even thinking of not harvesting, while in other areas even more production than 2022 is assumed. In our round of opinions among the different Consortia, at the beginning of August, for example, there were those who stopped at an optimistic -5% of grapes on 2022, such as that of Brunello di Montalcino , passing through -10/-15% among Chianti, Chianti Classico, and Montepulciano, with some more difficulties among Marche and Abruzzo, with losses between -20% and -30%, to the -35% expected by the Sicily Doc, to give examples. Up to the -14% at the national level, and to the declining estimates, in some peculiar situations, of even -50%, hypothesized by the Unione Italiana Vini (Uiv) itself, together with Ismea and Assoenologi (who will present their more in-depth estimates on September 12, in Rome, ed.), but also by Confagricoltura.
A tendency to predict a sharp drop in production, however, about which Lamberto Frescobaldi has always, however, preached caution, with numbers to be verified at the end. And this is explained by the fact that, “in Italy, in the last few years, the market has been very satisfying, and so many vineyards have been replanted that will bring an increase in quality, made with the right clones, varieties and training systems. And so many are going into production this year. In the Northeast, despite the fact that hail hit hard in some areas, for example, as well as downy mildew, hand data tells us that they expect an increase in quantity. Again, by how much, it’s hard to say because today with all the numbers you hear you’d be better off playing the lottery, and confusion reigns supreme - provokes Frescobaldi - we assume, however, in the Northeast 10% increase. Then yes, there was the downy mildew, as in Abruzzo for example, and not only that, but let's remember that, until April 2023, in Italy we were talking about distillation, we have already forgotten. At that time we were thinking of a very rich harvest, and there were several regions that were very alarmed, saying that we had to distill. Then came a rainy May, even in the South where they are less accustomed to this aspect, and the downy mildew did what we know, but again some producers were able to defend themselves, others not, but for that I say “let’s see”. I would like to say that there will be a little bit less grapes, that they will be better, and then that we raise prices so the grape producers will be remunerated and satisfied, because then in the end if that doesn’t happen those who produce from the vineyard at some point either stop or produce worse. But it doesn’t seem to be happening today, because there is still a very important stock, which does not make room for the new grapes, and then we have already wanted to forget that there are areas of Italy where derogations have always been given to produce more than 300 quintals per hectare, and this year they will produce more than 300 quintals, and this brings back to the Italian theme of lowering yields per hectare, because maybe in the end if you can have a little less product but more good satisfaction comes for everyone”.
Net of that, of numbers, forecasts and observers there are many, often even discordant ones, and for any sector it is necessary to have reliable forecasting models, net of the fact that in agriculture and in the vineyard the “first shareholder” is the sky and that the climate can turn things upside down at any time. And it comes to mind how difficult it is to work in this chaos and how much an unambiguous and reliable voice would be needed.
“It is a complex situation. The data are there, but aligning them is not a trivial exercise. Let’s also remember that there are many times labor organizations that tend to anticipate things, other times you can’t agree on when to make the wine production reports, which are often postponed, while many producers ask to anticipate them so as not to have data too far down the year, and, sometimes, even at the beginning of the following year. After that, maybe many people don’t like what I’m saying, and it will make some people angry”, Frescobaldi tells WineNews, “but what happens is that we always assume a harvest figure, and then when you get to the bottom there are always those 2, 3, 4 million hectoliters more than expected, which maybe come from wineries that are not too accurate in their reporting, or from some table grapes that go from one side to the other... these are things that you can say with difficulty but are under the eyes of the operators. Just saying them to you in this interview will bring me healthy criticism, but I will be happy to be refuted numbers in hand. But if I say what I said, I say it out of respect for so many winemakers, because it's clear to everyone that I care about the winemaker, sometimes more than the processor, because, until proven otherwise, wine is made from grapes, and so the careful work of the winemaker is particularly close to my heart, and, for me, at the top of the agenda is not only his ability to survive, but to live better and better and to produce better and better”.
In any case, and it has been talked about for years, an issue of overproduction, in the long run, and not only in Italy, is there. And if 200 million euros have arrived in France for crisis distillation, with the transalpinians choosing this route to get rid of some excess product in view of the harvest (not to mention, in the long run, the explants in Bordeaux), in Italy perhaps there are those who sell off below cost, at prices we often associate with Spain, wine that is bottled abroad, as Frescobaldi himself points out. And then there is the question of how to manage this situation in which, on the one hand, it is clear that value is being destroyed, and, on the other hand, it is equally clear that those who have no other means of making space in the cellar a way must find it. “We have an even more complex situation than France. There are few areas there that are very relevant in wine production, we have vineyard everywhere, from the Alps to Pantelleria, and each Region is responsible for agriculture, and it is much more difficult to make a national strategy. When we were talking about distillation, it was assumed that each Region could activate it or not, so we also have this complexity. Today, the issue is no longer on the agenda, but let’s remember that we have the responsibility of each Region when it comes to agriculture and wine, so we still have an extra step to take, and getting everyone to agree is not always easy”. Not even with a good glass of wine in front of you.