Allegrini 2018

Covid, Italian wine suffers but does not collapse. With many differences between types of company

If there are those who lose (especially in Horeca), there are also those who grow (in gdo and collecting). Decisive the end of the year
The resistance of Italian wine to Covid, in the opinions recorded by WineNews

Difficult, almost impossible, today more than ever, to unbalance oneself in estimates and market forecasts, even in the world of wine. But even in a complex and unprecedented picture, trends, until today, emerge. Almost in a sort of “tell me what company you are, and I will tell you what ground you are in”, in terms of variation in turnover. Because if the sector as a whole suffers, but does not collapse, there are differences, and also important ones. For companies very focused on large-scale distribution, for example, with wines that focus strongly on the relationship between quality and price, 2020 has so far been a year of growth, even important, with peaks of +10%, at least until October. On the contrary, for those focused mainly on catering and out-of-home activities, it reaches even -30%, with smaller losses, perhaps, for producers who have been able to leverage particularly strong company brands or denominations. For the very few who, on the other hand, are the privileged target of collectors in the world, again, sales are far from decreasing, and in some cases at even higher prices than in the past. As well enough, and in line with 2019, those who for years have invested and built a mix, both in terms of product, covering more price ranges, and channels, from catering to large-scale distribution, without neglecting the online, literally exploded in recent months, that of markets, with a widespread presence in many countries around the world (with an export that, moreover, has resisted quite well in the most important markets, the USA in the lead), and not focused on a few objectives. And it has been able, therefore, to optimize the presence, in Italy and in the world, in the domestic consumption, which has materialized through purchases in distribution, or through food & wine delivery in its various forms. With the home that has returned as the fulcrum, play strength, of food and wine consumption not only of necessity, but also of pleasure and escape. To try to draw a summary of these that more than data are sentiment and testimonies of those who live the market as a protagonist every day, even in these difficult times, we can say that on October 31, 2020, on average the Italian wine sector, to production, recorded losses between -10% and -20%. The result of a dusty start of the year in Italy and abroad, the collapse of the months of March, April and May, the recovery, even robust, between July-August-September, and then the new setback that we are experiencing these days.
It is very difficult, given the rapid evolution of the Covid framework and the containment measures, to understand what the next few months will be, which are crucial for the wine market, with the end of the year representing 25%-30% of the turnover for many wineries. Even here, unbalancing itself in an attempt at synthesis, if December will allow a certain freedom of movement and sociality, with a reopening of the catering industry in the evening, the picture could improve, and bring the overall annual balance around -10%/-15%, which would be almost as healthy as a triumph. Otherwise, if even stricter regulations were to arrive to contain contagions, the loss could be around -25%/-30%. This is the picture that emerges from the WineNews survey which, anonymously and confidentially (and non-scientifically), has gathered the testimonies of over 25 leading Italian wine producers, also very different from each other: small producers of big blazon focused on catering and collecting, large structured companies able to cover every price range and several distribution channels, and large wine cooperatives more oriented towards modern distribution.
An obviously difficult picture, but potentially not in such gloomy colors, on the whole, as it was legitimate to think in recent months, also in light of some considerations. Starting from the fact that, in the context of a historically anti-cyclical agri-food sector, wine, with the work of producers and communicators, over the years, has freed itself from agriculture tout court, and from basic necessities (such as pasta or tomato, which, in recent months, have even recorded double-digit increases) has become a product of pleasure, voluptuary. And whose resistance in consumption, in light of this, is even more significant. Because as an important element of the everyday life of many, and a small luxury accessible to many, wine, as such, is not essential in the priorities of consumption of families in Italy and the world, in this phase in which they have to deal with a thousand difficulties, even economic ones, and they do not give up.
Another factor to consider, is that of exports: if things obviously do not shine, in general, the numbers and words many producers point out that in some strategic and fundamental markets, such as the USA, for example, Italian wine has benefited from favorable fiscal conditions compared to competitors such as France and Spain. And in the face of the collapse of these countries, the Italy of wine has not only held its own, but has even gained ground, and seen some small growth in price positioning, which suggests, or gives us hope, that values will grow in the near future, when we return to normal. This is something that everyone, of course, hopes will happen as soon as possible.

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