Allegrini 2024

Federvini Observatory: wine exports approaching record 8 billion euros

According to Nomisma & TradeLab forecasts, Italian agri-food exports will total more than 59 billion euros (+16%). Consumption in mass retail and on premise

While waiting for 2023 to arrive, International organizations like the International Monetary Fund, the OECD, and the European Commission, are in total agreement, and have predicted a slowdown in growth, compared to this year. Data from the Federvini Observatory, edited by Nomisma and TradeLab however, highlight a new record for Italian agri-food exports, which should exceed 59 billion euros by the end of the year (+16% compared to 2021). This figure is also due to cross-border sales of wines, spirits and vinegars. According to export data from the Federvini Observatory (Nomisma), wine is expected to reach a record 8 billion euros (+12% compared to the previous year), and so are spirits. (1.7 billion euros). Results were also very good for vinegars, especially balsamic vinegars, which at the end of the year are registering 15% growth in exports (value).
The three factors that have contributed to this growth are the euro-dollar exchange rate trend, which has made it possible to offset increases in production costs and recuperate competitiveness on markets linked to the US dollar such as the USA and Canada, due also to the return of tourism on the global level, which has boosted the consumption of wines and spirits on the HORECA (hotels, restaurants, catering) channel; International tourists returning, for a total of 35 million, at the end of August (+125% compared to the same period in 2021) and market diversification, a strategy that many companies looking to emerging countries, such as Thailand and Vietnam have adopted, where, as a matter of fact, over the first 8 months in 2022, the value of wine exports grew 158% and 82%, respectively. Ten years ago, the European Union markets accounted for close to 57% of export value, while, after Brexit in 2021, it dropped to 39%. This scenario has definitely led to taking a different approach towards target markets and has prompted expanding commercial spaces, to be controlled, towards new emerging realities. Today, for instance, Asia accounts for 7% of the total Italian wine exports.
The Spirits market, on the other hand, is still the leader on the US market, where it registered +23% increase in value. However, on the top 5 markets, its leadership has decreased over time. In 2011, the biggest concentration of exports for the category in the top outlet markets was equal to 65.8%, while ten years later, instead, it had decreased to 58.3%, and then dropped further to 53.7%, in 2022.
Furthermore, according to data from the Federvini Observatory, growth on the out-of-home consumption market registered in the first 9 months of 2022, showed that out-of-home consumption of wines and spirits is also growing again (+38%). Plus, it is generating 1.1 billion euros in consumption, which is bound to increase up to 1.5 billion euros by the end of the year. The best performances were on the evening consumption channels, which in 2021 were damaged more than others due to closures, because of the Pandemic. The categories that stand out the most among these are still spirits, +152% and alcoholic cocktails, +40%.
Categories that have their main outlet in catering are equally positive, but slightly lower. This channel had already shown significant recovery since May 2021, i.e., +34%, bitters and after meal beverages, +30%, wine, and +31%, bubbles.
The professionals in the sector are expecting an excellent December, as Italians will come back to conviviality, by virtue of the Christmas and end-of-year festivities. This leads us to hypothesize, despite the difficult macroeconomic context, that the away-from-home market could close out 2022, reaching 90 billion euros (+38% compared to 2021; +6% compared to 2019). Wine is still one of the products that is given most to friends and relatives (about 36% of Italians). And, there will be sparkling wine on the tables for Christmas 2022, considered inevitable for 45% of those interviewed. Prosecco dominates especially among younger consumers (Gen Z and Millennials), followed by red wines from the South, such as Primitivo di Manduria and Montepulciano d'Abruzzo (18%) and whites from Alto Adige (8%), which especially the Baby Boomers prefer.
In the present day scenario, the mass retail channel seems to be experiencing bigger challenges. Inflation, which has never been as high since the 1980s, has prompted consumers to change their spending habits and adopt strategies aimed at saving. In the January-September 2022 period, there were very few signs of recovery, compared to 2021, but sales remained a minus sign. Further, mass retail wine sales registered a -3.5% decrease over the first 9 months of 2022, while still and sparkling wines represented almost 80% of the total sales by value in mass retail. The slowdown trend also affects the sales of spirits, although less than wine, which over the first 9 months in 2022 registered -1.8% compared to the same period in 2021. Distilled alcohol and spirits account for about 45% of sales total in value. Over the same period, vinegars also recorded a slight decline on 2021 (-1.4%), while balsamic vinegars instead continued to grow + 1.6% in sales by value.
“Data regarding the performance of our exports, highlight the importance of market diversification. This strategy is supported on one hand by promotional leverage, and on the other, by greater proactivity of the European Union in concluding more free trade agreements with non-EU countries. It is clear that we are moving in a complicated and constantly evolving scenario. Economic slowdowns in 2023, which should affect some European markets such as Italy and Germany, are not excluded”, Micaela Pallini, president of Federvini, commented.

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