Pambianco analysis: no “rebound” for wine & food in 2023, also top players suffer

A year certainly not to be classified in the category of “memorable”, 2023, whether we look at it in its various facets, that of the wine world, hit by a production crisis, also linked to climatic factors, in addition to that of consumption, which is inexorably falling. But, what is emerging, on the level of “sentiment”, is also a decline in confidence that leads to the stalling, or at least reduced gears, of operations and investments that could grow the sector. Like, for example, crowdfunding, a tool that had appeared more solid for wine & food in recent years. Pambianco’s research office conducted an analysis of the domestic and international wine & food sector’s stock market performance and crowdfunding operations in the wine & food sector in 2023. Some disappointment is mentioned, but also confidence for the recently started 2024. Starting with the performance of wine on the financial markets, after a 2022 at -16.9% (average value of the main stock market stocks), 2023 not only did not bring the hoped-for rebound, but continued to burn value stopping at -15.2 %, showing investors’ willingness to focus their resources elsewhere. That of the sector, we read, is a crisis that also finds confirmation in the lists of the most sought-after fine wines on the secondary market and registered on the Liv-ex Fine Wine 100 and 1000, which in 2023 did not go beyond -14.2% and -13.7%, respectively. It is a sign that, despite everything, the high-end is also experiencing a moment of stress. Whether this can then be attributed to the normalization of values or simply to the final effect of the slump in consumption caused by inflation on a global scale will only be discovered in the coming months, the study explains.
Going into the individual companies “listed” on the world’s various stock exchanges, which remained at 20 after the delisting of the South African Distell Group, acquired by Heineken, only 6 of them, the analysis continues, managed to grow in value. More than any other did Lanson-Bcc, a reality that controls eight Champagne labels, including Philipponnat and De Venoge, and which in Paris posted +29.8%, even improving on last year’s positive and already trending +14.7 % figure. Thus, at the end of December, the share value jumped to 41 euros after a start at 31.6. A path that is partly attributable to the share buyback policy of the founders, who, with an offer at 36 euros, came to 90.8% of the capital.
Behind it, for the second year in a row as a star performer, is Masi Agricola, which after +17.6% in 2022 placed a +15.2 %, seeing the stock, traded at Piazza Affari, rise from €4.3 to €5. The other four 2023 virtuosos, the Pambianco analysis further points out, are all rather detached and, unlike the first two, share a 2022 in the red. The first is the American Constellation Brands, which, thanks to its more than one hundred brands (from Robert Mondavi to Ruffino via Corona) and after last year’s -6.4%, marked a +7.9% increase from $224.3 to $241.7, for a path that has accelerated sharply after new appointments in the top positions of the various production divisions. Second is German Schloss Wachenheim, forty-label strong in sparkling wines, which with its +7.6% partly recovered the decline (-17.7%) of the previous year, for a pro-quota valuation that rose from 15.2 to 16.5 euros. Third is Crimson Wine Group, which controls several entities including Pine Ridge Vineyards and Seghesio Family Vineyards. The California-based company rallied +5.4%, taking the stock from $5.6 to $5.9 and recovering some of the -32% from 2023. The last of the quartet is located a bit further south in Chile, and Viña Concha y Toro, the largest producer in Latin America, which has over 12,000 hectares, including Argentine and U.S. properties, closed at +1.9%, nibbling something off the -17.4% twelve months ago and seeing the stock rise from 1,018 to 1,037 pesos.
Among those who, on the other hand, remained in negative territory, explains the Pambianco analysis, while withstanding the impact of wars and inflation, was Laurent-Perrier, a Champagne Maison that, in addition to its namesake label, also controls Salon, Delamotte, and Castellane, and which, after 2022 on the rocks, at +30.5%, closed 2023 at -4.7%, falling from 127 to 121 euros per share. Staying in Champagne, Vranken Pommery also managed to contain declines, amounting to -3.1% in 2023 (versus -2.2% in 2022), for a share price that fell from 16.5 to 16 euros. A sign that whatever the case may be, the high-end, especially made in Europe, somehow managed to weather the economic downturns, as opposed to, on the other hand, the Anglo-Saxon wine world, which experienced another nightmarish year.
Thus, continues the Pambianco analysis, the American Vintage Wine Estate, listed in New York and owner of some 20 brands including Bar Dog, Firesteed, and Clos Pegase, after -72.4% last year, managed to worsen, with a -84.3% and bringing its stock down from $3.2 to $0.5. Formally better fared instead for British online retailer Naked Wines, which had lost 80% in 2022 while this year it stopped at -59.1%, setting the value of its shares at £0.55 (they were £1.34). Italian Iwb-Italian Wine Brand (Giordano Vini, Barbanera, Raphael Dal Bo) is also not having a good time as it added another -31.1% to the -33.6% of 2022, for a share price that fell from 27.5 to 19 euros. A loss in value that is in line with those of The Duckhorn Portfolio (-39.5% in 2023 and -29% in 2022), Delegat Group (-34.7% and -26.8%), and Australian Vintage (-33.1% and -22.1%).
Leading the capitalization ranking is still Constellation Brands with 42.5 billion euros (up from 38 billion in 2022), followed by Treasury Wine Estate, a group with more than 40 labels in its portfolio, including Pendfolds, 19 Crimes, Blossom Hille and Golden Knight, with 5 billion (-15%), then China’s Yantai Changyu at 1.6 billion (-18.3%) and The Duckhorn Portfolio with 1 billion euros. For the two Italians, however, Iwb slips to tenth position, with 175 million euros, followed by Masi Agricola, eleventh with 154 million. All this excludes Lvmh, a reality that has a capitalization of more than 325 billion, which can boast a portfolio from twenty-six brands that includes, among others, Krug, Dom Perignon, Domaine des Lambrays, Château Cheval Blanc and Cloudy Bay, but whose specific weight in terms of turnover affects less than 10 %of the total, thus becoming marginal in influencing the stock’s fluctuations.
If 2023 therefore did not have that long-awaited rebound, 2024, Pambianco analysis reports, promises to be a year of consolidation. In fact, the dominant factor is investor caution as they seek to hold positions rather than open windows for new IPOs.
An expectation that also affects crowdfunding operations in the wine & food sector. According to data from the Pambianco Observatory on equity crowdfunding, in 2023, transactions have maintained the previous year’s numbers (20 in total versus 21 in 2022), while valuation has taken a hit. In 2022 the total had approached 14 million with an average of 665,000 per transaction, now the total value has dropped to 10 million for an average of 515,000. Unlike in the past, this year’s collection is monopolized by two names that together have centralized half of the total value of the 20 wine & food equity crowdfunding transactions in Italy. The main one is “Forno Brisa” which, in March 2023, closed its second round of investment through a new crowdfunding campaign after the one in 2019-2020. It raised 4.3 million euros, well above the target of 1.2-2 million euros. The other big campaign of 2023 was the one concluded by “La Filetteria Italiana”, a chain of six restaurants in the city of Milan with different cuts of meat from around the world that aims to expand in the Italian territory. With this in mind, it launched a round in February 2023 that raised 1 million euros, double the target set, for a pre-money valuation of 15 million euros.