Italian wine: 2024 worse than 2023 say 35% of wineries. Only 25% expect growth

The ship of Italian wine, that is to say, the market, is sailing on a rough and stormy sea, especially when navigating the deep waters of exports. The rocks (obstacles) that are slowing down navigation, in a storm that shows no signs of subsiding in the coming months, are economic difficulties, international crises, wars, health concerns, climate and competition from other drinks, especially among young people. And then, there is the risk of duties in the USA, which has become definitely more concrete after Donald Trump’s electoral victory, on the world's largest wine market and Italian wine companies’ number one foreign partner. So far, though, to date there are no real breaks in the hull that could cause fears of a shipwreck for the Italian wine fleet. However, it is becoming more and more important that the helmsmen - the captains of business - be able to decipher, evermore precisely and often very rapidly, the changing currents, to avoid disasters. Among them, though, there are more that see even darker and denser clouds on the horizon, driven by the winds of the world’s economic difficulties, than those that see the light of a new, reassuring dawn. This is the picture that the WineNews survey on closing 2024 and prospects for the near future, has revealed, according to the vision of twenty leading Italian wine companies. These participating companies combine an aggregate turnover of more than 2 billion euros (representing more than 14% of the entire production turnover of the sector). The sample that participated in the survey was varied and included highly prestigious small companies, large structured groups with very prestigious wineries and brands, and Cooperatives that, for some time, have focused on quality and building important and well-positioned brands on the market.
Specifically looking at the end of the year, the majority of wineries (40%) expect to close in line with 2023, while instead 35% expect a negative turnover balance, in most cases contained within -4%, but with peaks of -9% to -10%, and 25% of the sample expect growth in turnover, in most cases between +2% and +5%, and there are very few exceptions that expect to reach +9%. In the meantime, they are all waiting for the end of the year, expecting and hoping that the Christmas holidays will improve the general picture, which is substantially in line with the first 9 months of 2024. Thirty-five percent of the companies expect that turnover will be in line with the same period in 2023, while only 25% expect growth, sometimes even substantial, between +5% and +10%. On the other hand, a hefty 40% of the sample reported a drop in turnover, mostly contained from - 5 to -6%, but with peaks reaching -10 to -12%. The trends are different, though, when we observe the domestic or global markets. Twenty-five percent of the sample reported substantial stability on the domestic market, while the 35% that expects contained growth, between +2% and +4% in the majority of cases, and a few peaks around +6%, and instead the 40% that reported a drop in business, expect it to be mostly contained, from -2% to -3%, with a few peaks reaching -12%.
Beyond the border, 50%, exactly half of the sample, indicated stability in the first 9 months of 2023, while only 15% spoke of growth that ranged from from +7% to +12%. The remaining 35% said that business generated by shipments abroad is decreasing, significantly, and ranges from -5% to -12%.
The market sentiment that the companies’ responses has reported, therefore, is far from the optimism experienced repeatedly over the past several years, but also not catastrophic. The sentiment reflects the awareness of the wine producers in the sector, whose vision is in line, for instance, with those who sell it, such as Italian wine merchants, as highlighted in a recent Vinarius survey.
One of the elements that is worrying producers the most for the immediate future (85% of the sample reported) is the persistence, almost everywhere, of economic and geopolitical difficulties, which are slowing down consumption. While one of the major concerns indicated by 50% of the companies (multiple answers were possible), is the growth of alternative drinks to wine, especially among younger people, confirming the perception that the new generations are progressively distancing themselves from wine consumption, as dozens and dozens of international studies have demonstrated. Three of the major concerns of the wineries are the impact of climate change on wine production, as well as the increasingly strict health policies that many countries are adopting or promoting - both indicated by 40% of respondents. Instead, 35% indicated the difficulty in managing the growing costs for companies, in every aspect, and 20% mentioned, among the major problems, the growing difficulty in finding workers, especially in the agricultural part of the supply chain. Somewhat surprisingly, only 10% indicated bureaucracy, which until a few years ago was considered one of the greatest burdens on companies, and a real source of concern. This too, in its small way, is a sign of how much and how quickly the scenario has changed for the wine world.