THE ITALIAN WAY: THE FUTURE OF THE WINE INDUSTRY
Tuesday 28 July 2020
The fifth The Italian Way event, organised by UniCredit in collaboration with Federvini, looked at how companies in the wine industry are impacted by the crisis and can prosper and restart
The pandemic has had a strong impact on the Italian wine industry, which is estimated to lose 30-35% of its turnover in 2020. But growth is expected in 2021, supported by the stability of companies in the sector and the quality of the products. Key strategic themes for these companies include company size as a crucial factor, the risk of being bought by multinationals and digitalisation.
The fifth The Italian Way event, dedicated to the wine industry, was held on 14 July in Turin in partnership with Federvini, Italian wine federation.
Joining the discussion on how to restart the sector were Andrea Casini, Co-Ceo Commercial Banking Italy UniCredit, Sandro Boscaini, President Federvini, Fabrizio Simonini, Regional Manager Noth West UniCredit, Paolo Damilano, CEO Gruppo Damilano, Gianni Gagliardo, Poderi Gianni Gagliardo, Camilla Lunelli, Director of Communications and Foreign Affairs Cantine Ferrari, Alessio Planeta, President Planeta Vini and President Assovini Sicilia, Luigia Mirella Campagna, Industry Expert UniCredit, Marco Wallner, Corporate Commercial Synergies UniCredit.
1 Wine is a strong Made in Italy sector
With more than €13 billion in annual revenues, the wine industry accounts for more than 10% of Italy’s total Food & Beverage turnover. It is without a doubt a sector where Italy excels and provide the country with many record achievements. Italy is the largest wine producer in the world and the second largest-exporter by value, after France. It also has the largest number of certified wines (526 compared to 435 in France), reflecting the enormous investment in quality in Italy over many years.
2 A difficult 2020
Wine is one of the Food & Beverage sectors that is suffering the most due to the impact of the health emergency. In 2020, we expect turnover to fall by 30-35%, far greater than the average of 3-6% predicted for the F&B sector. The size of the impact will vary from company to company based on the type of wine.
3 The need for new business models
Uncertainty will continue to dominate until we go back to normality while transmission channels are being impacted by the sanitary emergency. Current wine production is made up of the domestic market (45%) and exports (55%).
4 Who has suffered the most?
The internal market is expected to shrink due to the severe difficulties faced by the hospitality sector as hotels, restaurants and cafes account for 42% of sales. Although wine tourism sector is only responsible for a small share of overall sales, it generates a high margin). A decrease in sales is also expected in foreign markets, especially for medium to high-level range wines, which are mainly sold through hospitality or export channels. Amongst businesses those that will be less exposed to risks will be those that have a wider range of products and more sale channels.
5 Strategies to restart
The sector was well placed when it entered the pandemic challenges. However, a liquidity crisis is expected, especially amongst the smaller, less structured companies. This will require new business models based on supply chains, value channels, diversification and innovation.
Andrea Casini, Co-CEO Commercial Banking Italy, UniCredit
Gianni Gagliardo, Poderi Gianni Gagliardo
Paolo Damilano, CEO Gruppo Damilano
Camilla Lunelli, Director of Communications and Foreign Affairs Cantine Ferrari
Alessio Planeta, President Planeta Vini and President Assovini Sicilia
Sandro Boscaini, Presidente Federvini