The wine market is worth more than $300 billion, and with growth of 23.9 percent per year over the next four years, it is estimated to touch $412.9 billion in 2027. Despite the setback in the volume of business in recent months in bulk wine sales, this is a unique opportunity for Italy, a wine producer par excellence, to focus on innovation, making greater use of e-commerce, blockchain and AI, and counter foreign competition by also focusing on sustainable packaging and organic wines.
These are the findings of the research “The wine business in Italy: consumption, trends and growth prospects” just published by Rome Business School, edited by Valerio Mancini, director of the Rome Business School Research Center.
“In the world of wine, with globalization we do not have to the standardization of taste worldwide, but rather this has generated a further segmentation of demand. The pool of demand for excellent and organic products is very large and tending to grow. For Italy, this is definitely a great opportunity to seize.” However, there is an urgent need to gear up, make use of technology and also a lot of research, to cope with climate change that is seriously impacting the wine sector.
In Italy, the 2023 vintage was undoubtedly one of the worst ever: crop volumes are lower than budgeted due to heavy hailstorms and persistent heat. Despite this, this has not diminished the quality of the harvest, and Italy remains among the top wine regions in the world. Leading the “Top 5” (Italy, France, Spain, the United States and Chile), the Italian wine market is worth more than $10 billion (FederDoc, March 2023), and accounts for 17 percent of world wine production.
Italy ranks first in wine production (21.9 million hectoliters of wine exported in 2022), followed by Spain (21.2 Mhl) and France (14 million Mhl). But in terms of takings, the podium turns around: in the last year, talia got 7.8 billion euros from exports, a 12 percent growth. France grew even more, reaching 12.5 billion euros, and Spain came in at 3 billion. This phenomenon is due to export prices (Nomisma-Wine Monitor, 2023).
In Italy, Piedmont is the leading export region, contributing 68.9 percent of total sales. In 2022, sparkling wines drove the growth of companies in Veneto (+13.4%), with Puglia (+21.1%) and Sicily (+14.9%) also performing above the national average. In 2023, Italy’s leading wine producers forecast overall sales growth in the order of +3.3 percent to the domestic market and +3.1 percent in exports. Bubbles lead the growth with a +5.2% increase in revenues overall and +4.2% in exports, while still wines expect a +2.8% increase domestically and +2.9% abroad. However, according to the latest data provided by the Uiv-Vinitaly Observatory (October 2023) in the last 4 months the United States, with a turnover of over $40 billion and the main buyer of Italian wine, has seen a drop in purchases of as much as 16% for sparkling wines. Declines in purchases of all wines also occurred in China (-27%), Canada (-20%), Switzerland (-10%), and the United Kingdom (-3%). Despite the setback, projected growth (2022-2026) in online wine sales in Italy of 7.2%, higher than the global rate of 2.7%.
There are 29 million wine-loving Italians, 58% of the population over the age of 18 (ISTAT, 2023). The profile of Italian consumers reveals that most are men (58%), 28% of them are over 65 years old. The age groups between 45-54 and 55-64 and collectively account for 40% of consumers, this points to lower consumption by the younger age groups (25-34 and 35-44) who, although up 15%, still account for less than 7% of the total. In addition, the frequency of consumption has changed from 2008 to the present: daily drinkers are down 22 percent (from 15 to 12 million) and occasional drinkers are up 35 percent (from 12.6 to 17 million).
Geographically, Lombardy is the region with the largest number of wine drinkers (17 percent of the total), followed by Lazio (10 percent) and Campania, Veneto and Emilia-Romagna (all at 9 percent). However, Emilia-Romagna has the highest penetration rate of wine drinkers relative to its population, at 62 percent. In contrast, Sicily has a penetration rate of 45 percent, below the national average of 55 percent.
Regarding favorite wines, according to a survey by Vinarius (2023), the most purchased red wines in Italian wine shops include Barolo, Brunello and Primitivo. As for bubbles, the favorites are Champagne, Franciacorta and Trento Doc. Among the most purchased sweet wines are Moscato d’Asti, Passito di Pantelleria and Zibibbo. In addition, there are “emerging” wines that are showing significant growth over the previous year: they are Ribolla (Friuli-Venezia Giulia) +12%, Muller Thurgau (Trentino-Alto Adige) +10%, and Vermentino (Sardinia, Liguria, Tuscany) +9.9%.
The outlook for wine consumption in Italy indicates a stabilization in 2024, with an expected per capita consumption of 26.3 liters and a total quantity of about 10.3 million liters. In addition to numerical data, Mancini highlights some relevant trends. In particular, the Italians’ attention to sustainability and the environment stands out.
Italian consumers show interest in organic wines (30 percent of people, according to PwC, 2023); they support the defense of biodiversity, thus preferring native varieties, including through the rediscovery of ancient vineyards. In addition, Italians pay more and more attention to sustainable packaging (9 out of 10 people prefer it), particularly in terms of weight reduction for less polluting transportation and their recyclability. In fact, the purchase of organic products in this type of packaging has grown 133% in the last ten years (FMCG Packaging Observatory Data – Nomisma and Assobio, 2022).
In addition, the automation of storage and warehousing processes through robotics will increasingly represent a lever to optimize the work of distributors, better manage customer service (both B2C and B2B), as assortment variety and speed of supply remain critical success factors for distribution. The relevance of online should also be considered; globally, dedicated e-commerce accounts for 4 percent of total sales.
The role of technology and the incorporation of robotics and AI, useful, for example, for translating labels and profiling customers, but also blockchain, should be further emphasized.
“By improving traceability and transparency in the wine sector, blockchain makes it possible to record and monitor the entire supply chain and ensure compliance with wine sustainability standards: an innovative way to give more guarantees to consumers,” says Valerio Mancini.
The Italian wine sector experienced significant growth in 2022, with a significant increase in revenues in wine tourism services (+67% compared to 2021). Winery visits were the most requested service, accounting for 78.8 percent of the total, followed by accommodation in hotels (32.5 percent) and catering (27.5 percent). Only 17.5 percent of wineries did not offer any wine tourism services, but this percentage is gradually decreasing. According to data from large wineries, wine tourism now contributes nearly 20 percent of the industry’s total turnover. Among foreign bookings, the United States was the main source (22.9 percent), followed by Germany (11.7 percent) and the Netherlands (10.5 percent).
Italy’s wine tourism offerings remain mainly oriented toward traditional tastings, (70.8 percent of the experiences offered) and are geared toward different audiences: the largest visitors are those between 25 and 34 years old (33 percent of the total), followed by young people between 18 and 24 years old (22.8 percent) and people between 35 and 44 years old (21.2 percent).
This is just one of the many ways in which Italy can boost its economy and also reputation. With 635 grape varieties registered in the vine register, twice as many as the French, a thousand-year-old tradition, and major buyers such as the United States, the European Union, and increasingly China, Italy has a unique opportunity to be a leader not only in wine production in terms of volume, but also in terms of innovation.
“There is an urgent need to develop a long-term strategic vision for the Italian wine sector over the next 10 years. This strategy should embrace different wine production models, promoting sustainability in environmental, economic and social terms. Targeted regulatory and economic support measures will be essential to take full advantage of the opportunities offered by different territories, adapting to changing circumstances and different production models. This perspective will provide a solid basis for the sustainable growth of the Italian wine industry,” Valerio Mancini concludes.