Italian wine exports are not growing and mass retail sales are slowing down, UIV and ISMEA data

The summary of the UIV-ISMEA Observatory analysis has revealed that exports are continuing to slow down while the domestic market has been showing slight, but not sufficient improvement. The data confirms what WineNews had reported on Istat data for exports in the first four months of 2023 and on data from Circana on mass retail sales in the first half of 2023.
In the first 4 months of 2023, Italian wine around the world registered a downward trend, revealing 0.7%drop in volumes, but +2% in values (exports totalled to 2.36 billion euros). Instead, in the first half of 2023, Italian mass retail trade closed at -3.9% in volumes accompanied by +3.5% in values (to 1.38 billion euros, the data comes from Nielsen-IQ, ed.). Both performances, as ISMEA and Unione Italiana Vini (UIV) pointed out, highlight the challenges companies are facing in 2023 as production cost surplus affects on average 10% of the finished product, compared to much lower increases in sales prices, both on foreign and domestic markets.
Furthermore, the UIV-ISMEA Observatory revealed a downward trend - mirroring the economic situation - of products marketed on foreign as well as on Italian markets. Not taking into consideration bulk wine sales, which are sold at low prices, volumes marketed across the border are even more negative (-3.5%), as bottled wines registered -4.2% and PDOs, in particular, -6.9%. On the Italian mass retail shelves, though, there are signs of improvement, such as a partial recovery of PDOs, which does not change the negative sign to positive, and the downward trend has been confirmed. For instance, the bubbles trend, where the rush of low-cost sparkling wines (+8.6% volume) set the price at 4.6 euros/liter, almost 40% less than the average Prosecco. The world's best-selling sparkling wine from the North-East raised its price lists in line with increases in cost of raw materials, and closed the half-year at -5.8% in volume, mainly due to the sharp halt in sales of DOCG.

Focus - Italian wine exports in the first 4 months of 2023

In April 2023, Italian wine’s foreign accounts in some of its strategic markets got worse. Specifically, compared to the same month in 2022, volumes of its top buyer, the US, and Switzerland, fell sharply (both to -14.8%), Germany halted (-0.3%), while the United Kingdom recovered part of the gap (+9.2%). Therefore, according to the UIV/ISMEA Observatory, the trend result for the quarter registered volumes was down -0.7% and values (2.36 billion euros) up +2% (the quarter was +3.8 %). In general, the average price growth was half (+2%), while that of sparkling wines was still high (+9%), falling 3%, and Prosecco -5.9%, but value was up +5.1%. Still, bottled PDOs was one of the segments that suffered the most, and closed the quarter in negative terms for volumes (-6.6%, and red wines at -8.7%), as well as values (-0.5%). Double-digit growth, instead, for bulk wines (also due to "below cost" sales, -9% the average price), while growth was good for table and varietal wines. Sales of white wines and red wines from Veneto, Tuscany and Sicily were down. The United States fell into negative territory this year in terms of volumes (-3.8%), but values are still positive, though they went from +10.8% in the quarter period to +4% in the four-month period. The second largest Italian wine buyer, Germany (+4.6% in volumes, +2.7% in values), slowed down, too, while instead, the United Kingdom closed in third place, limiting the damage of a troublesome start of the year, due mainly to the sharp drop of Prosecco (-20%), setting volumes at -8.4% and values at -2.6%. In contrast, compared to Switzerland registering -9.9% and Canada -26.8%, France has once again increased quantities of Italian wine to +20%. In the East, Russia, which increased 57.4%, Latvia and Poland offset the downward trends of Japan, China and South Korea, between -20% and -40%.

Focus - Wine sales on Italian mass retail trade in the first 6 months of 2023

Sales in mass retail registered a slight improvement, revealed the UIV/ISMEA Observatory analysis based on the Nielsen/IQ, in June 2023. Compared to March, when volume was down to -6%, the number was still negative, but smaller, at -4%, and turnover went from +2% to +3.5%. Still and sparkling wines dropped to - 4% (they were -7% in March), while sparkling wine went against the trend, dropping from a robust +4% in the first quarter to -0.8%, and was able to tread water, thanks to the growth of the “low cost” Charmats. The inflation trend was substantially confirmed in the first quarter. In terms of typologies, the decreases reported in the six-month period were half compared to March, at an average -4% in volume, meaning PDOs recovered 5 points, PGIs 3 points, while municipalities were around -4%, growing only 1 point. As far as the colour of wine, there has been some improvement compared to the first quarter. Red wines, however, registered the worst performance (-5%, from -8% in March), while white wines registered -4%, recovering 2 points. On the other hand, rosé wines performed better, recovering seven points and closing the 6 month period at -4%. All the main types of PDO and PGI wines sold on the mass retail channel registered negative signs. Vermentino di Sardegna alone, among the top 10, was largely in positive territory (+4% volume), accompanied by +1% for Puglia TGI. A red light - though in partial recovery - for Chianti (-3% compared to -9% in March), Montepulciano d'Abruzzo (from -14% in March to -9%), and Nero d’Avola that closed at -12% from -18% in March. The Sardinian wine, Cannonau, also fell to -4%, as well as Piedmont’s Barbera, down to -8%. Lambrusco Emilia was down 1 point, around -10% in volume. Verdicchio di Jesi (-20%) and Bonarda Oltrepadana (-16%) continue to be in a critical situation, while Soave and Valpolicella are positive, as they recovered -5% at the beginning of the year. Among the sparkling wines, Asti Spumante did well (+5.9%) and so did the Charmat wines, all the others did badly. Organic wines did worse than the average(-5% volume) and e-commerce is still in significant decline, in spite of deflation strategies(volumes at -11.7%).