First half of 2024: “not very bubbly” for wine in off-trade, but there is confidence for year-end

After the end of the summer season, which has historically been rich and a driving force for the wine market in the off-trade, thanks in part to the flow of tourism, it is time for a first balance sheet for the sector grappling with 2024 that is not unforgettable, but which all in all, even in view of a year-end that is historically decisive with the various holidays, remains solid. Certainly, the problems that have characterized the year since its inception have not gone away, or at least remain to varying degrees, from inflation that “presses” the pockets of consumers and thus an eroded purchasing power, healthiness, a certain loss of interest in the wine product on the part of the new generations, the issue of restaurant mark-ups that does not always find a satisfactory balance for consumers, and international tensions that also affect the market. With the great momentum of the immediate post-Covid ended, with the desire to restart and a promising context for consumption, the situation seems to be returning to the pre-pandemic period, but with due differentiation between areas and products. Some “reassuring” news is not lacking, albeit with a prudent caution when it comes to expectations, such as the figure of 4.6 billion euros for Italian wine exports in the first 7 months of 2024, +4.1% over the same period in 2023, as shown by Istat data, analyzed by WineNews, but the context remains not simple, evolving.
Coming to the individual types, in the away-from-home, the first 6 months of 2024 have seen a downturn in Champagne (which could, however, return to growth as Christmas approaches), solid interest in white wines but also some timid signs of recovery for reds, often given as declining. With the most famous and reliable territories and brands doing better than others. What we are facing, is, however, a complex overview, as also emerges from WineNews interviews with the top executives of four of the most important realities of high-end distribution in Italy, such as Marcello Meregalli, at the head of the Meregalli Group (with prestigious brands such as Tenuta San Guido, Argiolas, Speri, Oddero, Nino Franco, Badia a Coltibuono, Ciacci Piccolomini d’Aragona, but also big names from France and beyond such as Domaines Barons de Rothschild, Penfolds, Bollinger, Francis Ford Coppola Winery, among others); Carlo Alberto Sagna, at the top of Sagna (distributor of, among others, Italy’s legendary Burgundy wine, Domaine de la Romanée-Conti, and another transalpine Champagne icon such as Louis Roederer, as well as top Bordeaux names such as Chateau Margaux and Chateau Palmer, Cheval Blanc, Petrus, and Italian griffes such as Secondo Marco, Palmento Costanzo, Mamete Prevostini, Canalicchio di Sopra, and Querciabella, among others); Alessandro Sarzi Amadè, who with Sarzi Amadè distributes many top Gironde brands in Italy (and thus names such as Lafite Rothschild, Latour, Margaux, Lynch-Bages, Petrus, Angelus, Cheval Blanc and Yquem, to name a few, but also Italian gems such as Benanti, Castello di Bolgheri, Monteraponi, Pordaponi Aldo Conterno, via the California legend, Opus One); Luca Cuzziol, at the helm of Cuzziol Grandi Vini (with Italian brands such as Pala, Pietradolce, Frecciarossa, Biancavigna, Elio Ottin, Parusso, Sartarelli, and Ridolfi, and French brands such as Bruno Paillard, Alain Goeffroy, Comte Armand, Hendi Boillot, Domaine de La Chappelle and more) and president of the Excellence Society, which brings together 21 major names in the industry, such as 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, in addition to those already mentioned, for a total turnover of more than 330 million euros for 23.5 million bottles sold in 2023 (and ready to launch its “distributors’ salon”).
In out-of-home, which is the segment with the highest added value in the wine market, for Carlo Alberto Sagna, “after the years of post-Covid euphoria, where no one expected that there would be such a prompt, immediate, and, from a certain point of view, even excessive response compared to what pre-Covid consumption was, at the same time we expected, especially in the second part of 2023, to see normalization, a greater caution on the part of the market, the signs were there. What has been important is the responsiveness of the market but, in 2024, we saw a general slowdown in what is consumption. The reasons are, as always, many: from inflation, which affected all departments, of consumer and non-consumer goods, and which impacted our lives and spending capacity. The bad international news, the interest rates, the inventories of our customers, of ourselves, which had clearly increased a lot after a very strong market demand, and therefore a need for us to always be prepared for possible spikes in demand. Now we see the return to trends more like the post-Covid period. Then, I speak for our company, where we always try to take as a reference our best year, and then the previous one, both mainly in terms of turnover but also in terms of volume, and we closed it very similar to 2022. This year, for sure, there are many more difficulties, across the board, but not only Italian, also European and global. There are few markets where we know for sure that we can talk about a 2024 with a positive balance at the end of the year”. Positive, on the whole, is Alessandro Sarzì Amadè’s assessment: “personally, I have to consider myself satisfied with the current moment, although the situation is not very bright and not entirely reassuring, but the current results, which indicatively mark a breakeven compared to the previous year, which had already been a record year for us, make me feel satisfied. So probably the type of distribution, our strength of offering a wide catalog with great variety and great service is helping a lot”. Marcello Meregalli, on the other hand, points out that “the beginning of the year was certainly complicated, especially February. We were all in Wine Paris and looking at each other, due to two weeks of total stop, but not only in Italy, also in France and elsewhere. The rainy spring in our place certainly didn't help, but fortunately, the out-of-home consumption continued to be there; the summer was short, but what it had to make up it made up pretty well, and September and October were good. We are probably going back, as a flow of consumption, to pre-Covid; we got used to it well in the post-Covid years when almost all products were going to be sold out in the first half of the year, and instead now it is going back somewhat to 2019 levels. We expect a second half of the year, especially for bubbles, to be more important than the first”. According to Luca Cuzziol, again, “2024 is a complicated year, it is useless to deny it, however, it is also true that our companies, especially the distribution companies, have sales targets to date in the positive, and therefore despite the general contraction in consumption, we are performing quite well”.
Regarding the types of products and Italian territories, and not only, that are performing better in these months, also in view of the end of the year, which is certainly a “crucial” moment, Sagna explains that “from our company’s point of view we have somewhat different situations in the various parts of Italy, because in recent years we have invested a lot in the sales force by expanding the number of agents. We believe a lot in capillarity, although it has a cost, and therefore to be present all over the territory. The important thing is to be everywhere in the right places, that’s kind of our philosophy. Now the Italian trend is quite similar, we have a good response from cities like Milan, although in the first six months of the year it is one of the cities that suffered the most. but we see a good recovery, as in Northern Italy in general. The Center is also holding up well, Rome is suffering the most, in the South of Italy, even in the East, we see some suffering, but in our case we had a really important volume exploit in the South, from Naples down, which we knew would come to an end with the return to normalization. We are not worried, we are cautious and attentive to what is happening in the market, we are trying not to leave the path that was set by our predecessors. And we believe in the Italian market. We are lucky, we always repeat this to our suppliers, because it has great potential, which is families. Ours is still one of the few 99% markets made up of households, not chain restaurants and wine stores, they are almost all independent names and businesses, and that is critical, an incredible asset. But it also brings with it difficulties, which can be economic support, and commitment on the part of distributors in having to serve a huge number of customers to generate volume. But at the same time, I repeat, it is a great wealth”. “Our clientele, at this time, needs certainty, to feel calm”, adds Alessandro Sarzì Amadè, “so the traditional, classic, established appellations, the somewhat more established brands, and therefore Piedmont, Tuscany, Alto Adige, certain areas of Sicily, are working above all. A little more effort is being made by companies born lately, the less important appellations with less reputation, but we find this in every moment of crisis.” And somewhat surprisingly, however, “we see well a return of the reds”, Marcello Meregalli points out, “which suffered a bit at the beginning of the year. Usually, the most important reds have a slightly higher exit price target than whites, so maybe it was not just a question of consumption but of spending. As a future trend, though, there’s definitely white wine, we’re seeing that it’s growing, there’s a search for great whites, including Italian: probably in the future we’ll see a few producers going for some more important whites, we’re also asking for that. On the “no alcohol”, “low alcohol” discourse”, the distributor continues, “we are also questioning ourselves, but we have decided to take the “low alcohol” route, with some producers, especially on that younger range of products, the bubbles, some whites and reds for daily consumption, and we will come out with a series of products around 9 degrees, we want to make this mini niche market. Zero alcohol for the time being we don’t see it as yet so linked to a more classic wine world”. Regarding wine territories, again, Luca Cuzziol pointed out, as “there is no doubt that Bolgheri with 1,300 hectares, like Etna with 1,100, certainly suffers less than Chianti Classico in general, which has a larger area, for example. But in fact all wines that are territorial, well marked and above all well managed, hold up well in the market. For the foreign part, the discourse is similar, except that where there are too high prices or there has been speculation, there is definitely a certain contraction”.
Chapter Champagne, a global “icon” that is going through a delicate phase, as emerged from the “Modena Champagne Experience” in recent days, Sagna stresses that the famous French sparkling wine “is the one that has benefited most from the post-Covid revival, but is now suffering a bit more. At the same time, if we look at pre-Covid volumes, we are fortunately still in the positive balance, not forgetting, however, that the average price per bottle is significantly higher than what the pre-Covid market was. The interest is still there, clearly there needs to be a little more rationality on the part of the market in the selection of products, assortments, prices, of proposal to the public. What you can see is that now there are about 220 imported maisons and about 400 vignerons, more ten to twenty cooperatives, compared to ten years ago when there were more or less half. So we are talking about a market that is extremely more fragmented than in the past, the cake is still the same but divided into many more slices, and we need to be aware of this change, a change that has taken place but that will probably continue in the future, “renormalizing” on the products that have managed to give in recent years more continuity and more consistency both in terms of quality and quantity”. “Champagne is experiencing a downturn that is probably also the result of the great post-Covid exploit”, confirms Sarzì Amadè, “which we hope will be momentary, a downturn that will be limited, precisely, to this slight decline. We continue to be a reference country for Champagne. Obviously, the end of the year is very important, we are optimistic, we have hope that there will be a repeat of last year, where in any case there was a good recovery in a year that was not very brilliant, but closed on a positive note. The hopes are there, Italians love Champagne and if it is not for this end of the year, already from next year we will recover”. Meregalli recalls how “Champagne had a decidedly backward first half of the year, we are fortunate to distribute Bollinger, which is a worldwide brand and which works well: at the end of September, but I also see October figures, we are above not only in sales but also in quantity, compared to a 2023 record. The Rècoltants are also doing well, which last year suffered a bit more at the end of the year, but now they are working, perhaps thanks to the price and perhaps thanks to the fact that they are a bit more aggressive commercially, while in our case we have one maison, which is Ayala, which is the one that suffered the most in the first half of the year, but it is recovering now, although we don't believe, however, that it is going to equal the 2023 record. The middle range is the one that is suffering a little bit right now, in general”. Finally, Cuzziol photographs a 2024 for Champagne, which “came into the summer in great difficulty and is now recovering. The context is always the same, the brands that are defending themselves best are those that have done the groundwork, those who have used speculation, perhaps of the last two years, are suffering a bit more”.