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FINANCIAL STATEMENT

Iri: in the first 4 months of 2021, wine in large-scale distribution grew by 20%

“Wine in large-scale distribution between reopenings and economic restart” by Veronafiere, between online, sparkling wines, consumption premiumization
CARREFOUR, COOP, FEDERVINI, IRI, LARGE - SCALE DISTRIBUTION, UNIONE ITALIANA VINI, VERONAFIERE, WINE, News
Wine in large-scale distribution

The first four months of 2021 show important numbers for wine sales in large-scale distribution, which grew by 20% in value and 8% in volume over the same period in 2020, for a turnover that thus grew by 180 million euros: this is the summary figure, presented by the Iri research institute, in the webinar organized by Veronafiere “Wine in large-scale distribution between reopenings and economic restart”, attended by Alessandro Masetti, head of Food industrial product Coop Italia, Gianmaria Polti, Head of Beverage Carrefour Italy, Pietro Rocchelli, partner and CEO Maurizio Rocchelli Srl, Mirko Baggio, representative of Federvini and Head of Sales Italy Gdo of Villa Sandi, and Enrico Gobino, Marketing Director Mondodelvino Group and Unione Italiana Vini (Uiv). Doing the honors, the CEO of Veronafiere, Giovanni Mantovani, who stressed that “this webinar reaffirms the historical centrality of large-scale distribution in the Vinitaly schedule, thanks to the presentation of data on the sector by IRI and the activities of the Large-scale Distribution Buyers’ Club, the area dedicated to B2B meetings between exhibitors and operators of large-scale distribution. Veronafiere and Vinitaly have always kept the engine running and are now ready to reignite business in presence, in order to capitalize on the slightest opportunity for recovery, with a schedule of events, starting in June, culminating in the Special Edition of Vinitaly, in October, and the 54th edition of Vinitaly in 2022”.
Returning to the data, it should be contextualized, because, as Virgilio Romano of the research institute Iri explains, “a year ago there were difficulties for the large surfaces, an obvious consequence of the lockdown. Today, however, between January and April the superstores return to grow, and the small surfaces are suffering, but compared to two years ago they still show positive data, while the online is still in great splendor. 2020 was a breakthrough year for online, which doubled its volumes, a trend that was confirmed (+128.7% in the period). In the first four months of 2021, large-scale distribution sold more than 22 million liters more, but the growth tapers off as we move forward: the scenario normalizes, and the effects on sales are less important, so if in January still wines sold 8.2 million liters more, in April there was a drop of 3.3 million liters. Bubbles, on the other hand, show the opposite trend”, explains Virgilio Romano.
On the other hand, “a year ago sparkling wines marked the worst result of the last twenty years, also due to fears and apprehensions of that period, with Easter in full lockdown and really nothing to celebrate. In the first four months of 2021, on the other hand, in the wake of what happened from May 2020 onwards, the result is decidedly positive, so much so that the overall change was 11.1 million liters more sold, going from 23.1 million liters in the first four months of 2020 to 34.2 million liters. Online, for large-scale distribution, is worth 1.6% of total sales, a respectable slice, bearing in mind that there are obviously many channels, especially outside large-scale distribution: of the 180 million more invoiced by wine in the large-scale distribution channel, e-commerce generated 9 million”, continues Romano, business insight director of Iri.
In summary, the growth of wine sales in large-scale distribution is also sustained in the first months of 2021, a year that has benefited, in a sense, from two more months of lockdown, albeit less stringent. The channels that suffered the most last year are taking revenge at the expense of those who benefited from the restrictions on movements in 2020. Now, we enter the period when comparisons are made on a like-for-like basis, so trends are likely to cool. “If we look at the trend of the denominations by Region of origin of the wine - Romano resumes - the growth is in the hands of the smaller Regions, such as Molise and Liguria, followed by Sicily, Puglia, Sardinia, but they are all in positive territory. Even for IGT wines the situation is similar, with Liguria, Friuli and Triveneto in the lead. There is a desire to try new things, even from lesser-known regions. As far as sparkling wines are concerned, the classic method is the best performing category, followed by Prosecco, which is worth half of the entire category”.
As mentioned, “we are approaching months that a year ago brought sales in large-scale distribution back to normal. May and June will be very important for wine, with sparkling wines becoming difficult to predict in terms of trends. The numbers of a year ago, however, will hardly be replicated. Wanting to make predictions - resumes Virgilio Romano - we can foresee three different scenarios: Predictions: the last 8 months of 2021 could be like a year ago, therefore showing a 6% growth in value, but it is a difficult picture. If, on the other hand, it went the same way as in 2019, growth could be 0.2%, and that is ultimately the most likely picture. If, on the other hand, we saw the same trend as in March and April 2021, growth by value would be 15%, but that's definitely the scenario least likely to come true”.
Regarding 2020, Romano recalls, “last year in March and April there was some suffering on the higher priced wines, such as Amarone and Brunello, for two reasons: the different channeling between different areas, with the small ones where the offer is different, and substantially more limited, and then the need to hurry, which did not help, unlike this year, and this explains the difference between growth in value and volume, with a strong growth of wines above 15 euros, which show a rebound on the decline of the same period a year ago”, concludes the business insight director of Iri.
A snapshot in which Alessandro Masetti, head of industrial food for Coop Italia products, finds himself. “We record important sales, but the trend is not linked to an increase in prices, on the contrary, to the contraction of table wines (-13%) compared to quality wines. Significant sales figures for large-scale distribution, but there is another channel, even for wine, Horeca, which is losing 30%. In large-scale distribution, consumers are looking for what they were used to buying outside the home, and this is an important fact, as is the impressive growth of bubbles, especially compared to a year ago. 2020 has been a difficult year for large surfaces, while I would not speak of great recovery for sweet sparkling wines, which have very small absolute numbers. There is, however, a generalized recovery, on medium and high price ranges. Branded products represent different market segments, with excellent performances for the “Assieme” and “Fior Fiore” lines, with double-digit growth and an important average price, above 8 euros for the Fior Fiore world, on which we work with numbers that are too small compared to the response of the final consumer”, explains the head of the Coop Italia industrial food product.
“We are very satisfied from this point of view, especially in terms of quality, which is fundamental when we are talking about a product that, in any case, is increasingly difficult to make people drink, also by virtue of a population that ages year after year and an increasingly healthy society. As far as scenarios are concerned, as we go on, the growth delta will decrease, because the situation is normalizing, or at least that is what I hope, with the reopening of bars and restaurants, which will allow us to go back to drinking wine at the restaurant table as well, even though this will take away some sales to the large-scale retail trade. In this long period - concludes Alessandro Masetti - we have been contacted by many companies, but not as many as we could think, also because the space dedicated to wine in our stores has remained the same, and we have given priority to our usual partners. I don't see a great discontinuity with respect to the dynamics of the long term, the pandemic has only accelerated trends that had already been underway for some time: drinking less but better and increasing demand for sustainability are trends that were already there”.
Gianmaria Polti, head of Beverage Carrefour Italia, also confirms the picture that emerged from Iri's data. “We are also in an important growth scenario. In the reality of Carrefour, in typical wine we have a growth focused more on white wine, over 10%. On average considered an aperitif wine and linked to a consumption away from meals, it has had higher growth than reds, which instead were going strong a year ago. Within sparkling wines, classic method is showing a growth of 70%, therefore very interesting volumes, and I believe it will continue to grow. At the same time, I confirm a contraction of ordinary wines, which a year ago had a remarkable rebound in consumption. If we look at our data, Carrefour is growing right in the biggest stores, unlike the industry average. If we make the ranking of the best-selling products, we see a revolution compared to last year: at the top, two classic methods, and this was influenced by the theme of aperitifs at home, a new phenomenon due to the closures dictated by the pandemic. In terms of price, there were no increases, it is an effect of the sales mix: we are seeing a conversion of purchases to bottles of greater value. People are tasting and exploring - explains Gianmaria Polti - among bottles that were usually bought at the restaurant. So, our offer has also tried to meet this new demand, with a wider catalog and with medium and high level references, always within a localism that remains an important key in the world of wine in large-scale distribution. Essentially, we have assorted many more bottles close to the Horeca and wine shop worlds this past year”, concludes the Carrefour Italy Beverage Manager.
For Pietro Rocchelli, partner and managing director of Maurizio Rocchelli srl, leader in sales, communication and marketing for wine companies, “Everything is converging towards the certification of a strong discontinuity, which is based on three elements: an increase in sales of wine in large-scale distribution, which accelerates a trend that has been present for some years and, beyond the contingency, marks a possible change of scenario. The data confirm a process of premiumization, and it is necessary to understand if it is true that large-scale distribution today has the possibility of benefiting by going in this direction. And, if so, how to ride this trend, not letting it be just a circumstance. Then there are the new channels, such as the online, detected by Iri, which confirms their importance. All this means that the industry's priority agenda needs to be updated, because all this data certifies a strong discontinuity. It is also necessary to overcome the logic according to which the channel is equivalent to the market, this is no longer the case: there is a market of many consumers, who can be reached through many different channels: large-scale retail trade, Horeca, online, delivery. Wineries need a conscious and long-term approach in this sense”, concludes Pietro Rocchelli.
On the company side, Mirko Baggio, representing Federvini (but also sales manager for the Italian large-scale retail trade channel at Villa Sandi), underlines how the striking fact “is the high value of wine in large-scale retail trade, which indicates an increase in average price, and therefore a shift in consumption towards the higher end of the shelf. Already last year, the price range that grew the most was the 7-10 euro range, a surprising fact that indicates a shift towards DOC and IGT wines. The effect of promotionality here has less value, and so we can work better and more with large-scale distribution, which enhances the value of the product, presenting them in a more appropriate way. Within the data, I can only underline the strong increase in these 4 months in the Prosecco sector, close to 60%, an aspect that is very striking. It is now worth over 50% of the value of sparkling wines on the shelf. This growth has been helped by the novelty of Rosé, which has started off very well, and is showing interesting numbers, already accounting for 10% of all Prosecco Doc, and 50% of all Charmat rosé. The online channel, which is beginning to become important also in terms of weight, should be highlighted: it is worth 9 million in growth, so it is worth investing dedicated resources in it”, concludes Mirko Baggio.

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