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Allegrini 2024
SCENARIOS

Joint promotion to relaunch Italian wine on the International level

At “Wine2Wine Business Forum” 2023, Vinitaly’s strategies to relaunch the sector after a challenging year, but potential is high

How can we revive the wine sector after a challenging year that was an uphill climb, full of uncertainties, doubts and projects struggling to take off on the constantly changing International market, while at the same time dealing with lower and lower consumption? Nobody has a magic wand, of course, but Italian wine is capable of getting back into the running, by not losing faith in its abilities and not forgetting the very positive years before the slowdown in 2023. One way to do this could be to predict the evolution of the markets and team up, uniting ideas in a shared promotion strategy on International markets, streamlining resources, a view towards positioning, and new business opportunities in a delicate geopolitical and economic context. This message came from the 10th edition of the “Wine2Wine Business Forum” that took place on November 13th and 14th at Veronafiere, targeted to wine institutions and companies. Unity of purpose is the "mission" perceived during the opening discussion titled, “Export Maps. Vinitaly’s activity for the internationalization of Italian wine. Focus USA, Asia and Eastern Europe”. The discussion was based on the sector check up presented by Carlo Flamini, head of the UIV (Italian wines union)-Vinitaly Wine Observatory, which highlights a mobile global scenario. On one hand, the picture the analyst depicted of 2023 confirms the difficulties that had been predicted at the end of 2022 for Italian wine, while on the other it emphasizes that a change of pace is absolutely needed to get the struggling sector back on track. According to estimates from the UIV-Vinitaly Observatory, there will be a drop in turnover at the end of the year compared to 2022 (-2.9%). The decrease in operating costs due to the partial reduction in energy and raw material costs was not enough to preserve the fundamentals of the sector. And, like many others, it is suffering because interest rates have doubled, the HORECA (hotel restaurant catering) sector has collapsed and the decline in the market has impacted warehouse costs. The UIV-Vinitaly Observatory has instead estimated a less drastic end of the year than was expected 12 months ago in a hypothetical scenario of global recession. The drop in volumes sold will be just under 3%, thanks to the stability of demand in Western Europe (+1%) and to a lesser extent to the jump in Eastern Europe (+20%), confirming there are still markets that have potential to explore. The bad news, though, comes from the historic markets, starting from North America (-14%), Japan and Korea (-23%), the Far East (-20%) and South America (-16%). In general, the domestic market will lose 3.7 points, while exports will lose 2.4%. There are also positive signs from markets that show very interesting possibilities where Italian wine could plant its flag. The UIV-Vinitaly Observatory has mentioned Japan and South Korea as well as Eastern Europe, where penetration rates are still below 50% of potential and growth forecasts are high. According to the report, the top US buyer still has a wine penetration index of 60%, and a curve, which aside from the economic situation, promises to rise in the medium-long term (North America counts 30% of Italian exports).
In the USA, volume is -11.8% worldwide and -8.7%in Italy, which continued to drop each quarter, greatly influenced by inflation. And, the situation will stay like this until mid-2024, according to forecasts. There are, however, some positive notes to highlight, such as the growth of Italian wine (the only one compared to other competitors) in the promising Midwest, and a significant share of bottles starting from 25 US dollars.
The global value of Italian wine fell to 13.3 billion euros (-2.9% conservative), - 4% decrease in turnover (5.6 billion euros) and a challenging scenario both off and on trade. Tourism has returned, but it has not been enough to boost the sector (which, we must remember, had experienced positive years), as exports are falling 2.2% and worth 7.65 billion euros. Volumes fell (-3.7%) and sales channels as well, consequently, the mass retail trade (-3.8%) and HORECA (-4.7%). Climate change has also made an impact, as it has actually changed consumption habits (fewer red wines) and made it difficult to identify new trends. Eastern Europe and the Balkans are worth 307 million euros, equal to 4% of the export share, reaching +19% in value in the first seven months of 2023. Poland, the Czech Republic, Slovakia, Romania, Bulgaria, Croatia, Hungary and Serbia showed great interest in Italian sparkling wines and bubbles accounting for more than half of exports. China is suffering the most (and not only for Italy), as wine imports have fallen below the 2013 level. The only positive note is that consumer orientation is towards more expensive bottles (from 6.5 euros to over 12 euros), reversing the trend of ten years ago.
“The 2023 market trend that has been presented”, the president of Veronafiere explained, “has confirmed the challenges our Observatory announced a year ago, and validates the path the new governance has indicated for the event starting from the 2023 edition. In other words, a more business-oriented event in Verona, and at the same time, at the center of a hub that can really aggregate promoting Italian wine abroad to give a practical response to businesses. Dialogue and commitment with all the institutions, Ministries, Embassies, foreign Chambers of Commerce and the ICE (foreign trade institute)-Agency, are headed in this direction, to establish an “Italian team” that can try its hand in Italy and abroad”.
Maurizio Danese, Veronafiere CEO, underlined that “after the record number of buyers selected at Vinitaly 2023, we have started again implementing a special promotion and an incoming program in view of 2024, which includes events, roadshows and previews of the event in 15 target countries on 3 continents, to outline the evolutionary mapping of consolidated and emerging markets. The project, the same as last year, includes important investments aimed at further consolidating the role of the event. It will be expanded in Verona - the crossroads of our International activities - and abroad, where, in addition to the Fairs in China and Brazil, we foresee creating Vinitaly USA 2024 in Chicago, and another new business to business event in Japan”.
The recipe for the Trade Fair SpA, contemplated in the next strategic plan, 2024-2026, is to strengthen Vinitaly's business vehicle, in collaboration with the ICE-Agenzia, in favor of a sector whose promotional activities are historically fragmented into a thousand initiatives . “Exporting is fundamental”, Lorenzo Galanti, General Director of the ICE Agency, commented, “and we absolutely must take Italian wine abroad because it is Italian. It is good for everyone. So, in this context, inflating events is counterproductive. Working with Vinitaly is essential because it helps us rationalize and systematize initiatives. Now, we are especially interested in increasing the quality of buyers to guarantee a match that allows us to optimize business to business meetings in favor of positioning Italian wine around the world”.
One of the objectives the top management of Veronafiere indicated for Vinitaly next year (April 14-17, 2024), is the high participation of International buyers and the ratio of foreign professionals present at the most recent edition ( 31.8%), as well as the greater impact of qualified National demand. Furthermore, the quality-quantity selection of foreign demand has continued through previews; that is, promotional events for Vinitaly in a “buyer hunter” key, which began in Lugano at the end of October, and a world tour (until next March), in Switzerland, Austria, Belgium, Germany, France, Japan, South Korea, Sweden and the UK. At the same time, International trade fairs and business-to-business events have been planned. Following Vinitaly-IWE, in Chicago, in October 2023, we will start again on November 16th from Vinitaly Wine Vision by Open Balkan, where the Italy Area will be curated by the Trade Fair brand and ICE. It will continue in March and the Vinitaly USA Roadshow in Houston and New York (4-7 March 4-7th), and Vinitaly China in Chengdu (March 17-19th). AfterVinitaly in Verona (April 14-17th), the 2024 calendar for the International promotion of Italian wine, signed by Veronafiere, will return to Shenzen and Wine to Asia (May 9-11th), Vinitaly China Roadshow, Wine South America (September 3rd-5th) and Vinitaly Canada Roadshow (Toronto and Montreal). Vinitaly USA in Chicago has been confirmed to take place from October 12 to 14, 2024.

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