Allegrini 2018

Multichannel, online and brands in the future of wine. But financial strength is a critical issue

Analysis of the impact of Covid-19 penned by Lorenzo Zanni and Andrea Golia of the University of Siena at “Wine & Siena”
Multichannel, online and brands in the future of wine. Financial strength is critical.

It is a real fact that the Pandemic has dealt a hard blow economically speaking to Italian wine. There are many different situations from company to company, and a few, very rare positive exceptions in a sector that, like a punch drunk boxer, is trying to call on all its strength and its determination to remain standing. And yet, there have been confirmations and new developments coming from 2020 marked by the Pandemic that can help companies navigate this 2021, which will be complicated and perhaps even more delicate to manage than the past year. The impact of Covid-19 and its consequences are the subject of a survey carried out by Lorenzo Zanni and Andrea Golia of the Department of Business and Legal Studies at the University of Siena. They explained the results of their study during “Wine & Siena”, an event in digital version on Helmuth Köcher’s The WineHunter Hub platform.
The survey involved a sampling of 100 wineries in Tuscany, one of the most representative Italian wine regions; therefore, the ideas and reflections that emerged are in general valid for the entire sector. Overall, foreign markets have been confirmed fundamental to resisting the crisis (wine exports, according to the Italian statistics agency, ISTAT data analyzed by WineNews, in the first 10 months of 2020 decreased but did not collapse, at -3.4% compared to 2019). As a matter of fact, several companies tried to open new ones in 2020 as well, and many invested in the digital world.
The most popular actions in response to the picture the Pandemic has drawn have been strengthening online sales channels, but also financially restructuring companies; particularly, and where possible, by resorting to self-financing tools. Furthermore, innovative channels and new products and services have been explored (such as online tastings, for instance), and much more attention has been paid to restructuring credit towards banks. It is difficult to trace future scenarios, because the capacity to respond to the crisis has depended on and continues to depend on mostly the size of the wineries and the business model. In any case, two of the most important guidelines will be strengthening strategies linked, on the one hand, to the corporate brand, and on the other to the territory. For the majority of companies, online and digital channels will become even more essential, even though many believe that this scenario is circumstantial and not organizational. According to many companies, the Pandemic has changed consumer behavior anyway, to the point that one of the most important actions will be to invest in strategies related to sustainability and everything that is green.

Another pivotal aspect for wine producers will be to reselect some of the players in the supply chain, in a scenario that has changed due to the fact that some have failed or will not be able to resist the economic impact of Covid-19, and because it seems that processes of aggregation and acquisition will definitely intensify. But there are many critical issues that the wine companies in Tuscany and all over Italy will have to deal with. To start with, the financial stability of the wine sector, which historically has been very unstable on capitalization, and often exposed to liquidity risk.

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