Italian Wine Limping: Difficult 2023 in Vineyards and Markets

A very difficult year, both in the vineyards and in the markets. Overproduction was prevented, in part, by downy mildew, which reduced crop potential by 20–24% compared to the previous year. Paradoxically, not all the damage caused by a fungal disease is actually harmful. As of July 31, the eve of the new harvest, there were 45 million hectoliters of wine in the cellars, and another harvest of 50 million hl would have caused even more damage. 2023 has highlighted the pitfalls of the system that produces too much in the face of significantly reduced demand, especially for some types (for example, a lot of red wines). The year will end with a minus in volume and value, both in exports and in the domestic market. The reduction in Italian wine is about 3-4%. The wines of Verona and the Veneto region are also struggling, especially red wines, as well as Prosecco, for the first time in many years. In September, export volumes of Veneto red wines amounted to -14%, white wines to -7.5%.

They were quite consistent with last year’s volumes, perhaps with a slight decrease, of course, due to the latest, not very positive bottling data for November and December. What has changed is, as noted since the beginning of the year, the choice of product that is in some cases more affordable for the pockets of Italian and foreign consumers struggling with a high cost of living that does not loosen its grip. Hence, according to calculations based on Nielsen data, ISMEA and UIV record an increase in purchases of cheaper sparkling wines like Charmat, including varietal and vintage wines (+7.5% to 206 million bottles according to estimates for the entire 2023) compared to Italian “flagship”  appellations, such as Prosecco (Doc, Conegliano Valdobbiadene, Colli Asolani) and Asti Spumante, or classic method wines (Trento Doc, Franciacorta, Oltrepo Pavese, Alta Langa, Lessini Durello), which end the season with a reduction of 3-5% (more than 700 million units). The failure in the sparkling wine and prosecco sector, which we believe is cyclical.

Abroad, and not in Italy, where the wine culture is higher, we find the following new trends:

COMPOSITION OF PRODUCTS – There are emerging signs that consumers, especially younger ones, no longer consider themselves “wine drinkers,” “beer drinkers,” or “cocktail drinkers.” The lines between categories are blurring, and a kind of “product category confusion” is emerging: wine is fermented in sherry or bourbon barrels, wine is used in cocktails or seasoned with other flavors. Of course, this is not a purist approach to understanding wine, but a trend, especially among young people, that should be taken into account.

LOW CONTENT AND NO ALCOHOL WINE – Wine is also in the race for enjoying lighter methods of consumption, particularly on the alcohol front. The overall sector, which includes beer and beverages, among others, has already reached $11 billion and is expected to exceed $24 billion by 2032, according to IWSR.

DIFFICULTIES WITH RED WINES – In Italy alone, the reduction of red DOP (Denominación de Origen Protegida in Spanish, Protected Designation of Origin) wines will be around 10% in 2023, followed by an increase in the market share of white wines and especially sparkling wines (climate change, youth, aperitifs…). The situation is different with magnificent premium and super-premium red wines, the target audience of which, despite economic pauses, will remain unchanged.

WINE AND HEALTH – There is a renewed general condemnation of alcohol consumption as such, regardless of its type (wine is not a strong alcoholic drink) and volume of consumption.