We are all using the term “crisis” extensively these days. It also happens among the workers in the wine sector. Some are restless because the traditional trade fairs and international travels have disappeared. Others feel bewildered by observing their colleagues in tourism and catering stopped and in full recession. The most positive ones believe instead that there can be new opportunities, it is enough just to see them and pursue them.
We took stock of the situation on the 2021 global consumption of Italian wines by involving our team colleagues.
The term “crisis” derives from the Greek verb krino, originally used in agriculture to indicate the action of separating the grains of cereal from the chaff. A verb that includes, in ancient Greek, the concepts of choosing, discerning and evaluating to separate the best part (the grain of the cereal, in fact).
The historical moments of worsening of the economic situation, such as the one that has been affecting the most productive nations for 12 years and that last year culminated with the effects of the pandemic, are the bearers of great transformations. Wine consumption in 2021 will still be conditioned by strong selection pressure. In these moments, the healthiest economies, the strongest subjects and the ideas that bring renewal are able to assert themselves.
A glimpse at the internal market
A brief market analysis shows that in Italy all the classic schemes of wine distribution have jumped a bit. Before the pandemic, impassability between distribution channels was a dogma. Woe betide imagining the same label in restaurants and on the shelf of a supermarket! In the consumption of wines in 2021, we are instead witnessing a real reshuffling of the cards. The on-trade operators, who manage to restart, are looking for wines and sparkling wines with very low prices. At the same time, the off-trade chains have greatly expanded the offer of wines in the mid-range, now selling bottles that until 2019 were reserved exclusively for restaurants.
Flexibility is what allows dear friends of the restaurant to survive. In addition to “home delivery”, there are people who worked hard to produce fresh pasta, filled pasta, desserts and even ice cream, in order to expand the range of gastronomic preparations available for delivery.
Every square meter of possible expansion has been taken into consideration: the terraces are covered, the windows of the verandas are lengthened and more and more dehors are replacing the stalls that delimit the parking lots. Teams of artisans are completing the renovations of the premises that will have to interpret a new way of doing catering; there is now talk of “post-Covid layout”.
The wine lists are also subject to revision: there is a desire to offer new wines at the right quality / price ratio, possibly from native grapes and lesser-known appellations.
Recovery at different speeds
The speed of recovery from the pandemic differs widely from country to country. A high civic sense and a more spontaneous obedience to the authorities, typical of Asian peoples, allowed the authorities of Hong Kong and China to reopen the restaurant. Even in Russia, catering and nightlife have already restarted. In South Korea and Japan, things are gradually improving. Other nations that are more or less in the middle of the mass vaccination plan against Sars-Covid are announcing imminent reopening, including Great Britain and the United Arab Emirates.
As happened in Italy, some Italian wines usually destined for catering have found a new distribution position. The most important part in this repositioning in the consumption of Italian wines was carried out by the “quality wine shops” housed within some supermarket chains; it happened with Watsons in China, Lotte in Korea and Azbuka Vkusa in Russia, just to mention a few. In Europe, the sales of Italian wines in the Scandinavian monopolies are doing very well. In the United States, Italian wines distributed in chains such as CostCo and Total Wine are experiencing no slowdowns. A large part of the catering trade has been replaced by bottles purchased for home consumption. Our winemakers who had managed to segment their position well on foreign markets, overseeing multiple distribution channels and being present in various countries, closed last year with sufficient results.
We said that the term “crisis” includes the positive nuances of evaluation and discernment. A fact to reflect on is that according to which foreign buyers are looking for easier (or less demanding) wines from the wineries they supply, even from the most noble ones. The French from Bordeaux, the Tuscan cellars Antinori and Frescobaldi have understood this for a long time. Their offer also includes wines for “beginner’s palate” (simply, those who approach wine consumption for the first time). It is an investment in the new generations of consumers, who will be gradually accompanied towards the finest wines, with a growing awareness of the winery’s brand and the extraordinary variety found among Italian wines.
It is expected that in 2021 the consumption of this category of Italian wines in the world will grow.
In addition to catering, one of the sectors on which the pandemic had the greatest impact was that of trade fairs: the dates are now all postponed to 2022. The world of trade fairs is undergoing very important selection pressure. The entire sector is in metamorphosis. The organizers are increasing the offer of “on-site” events, especially in Asia. In this sense, the pioneer of post-pandemic reopening was Prowine China, the event held in Shanghai last November 2020.
Obviously, as travel to Asia is not yet possible, the only way to participate in these promotion programs is to rely on local resident staff. The producers of Italian wines who in recent years had already organized themselves with valid collaborators resident on the spot have now an undoubted advantage.
Realism and opportunity
The season has just started; the consumption of Italian wines in 2021 is still to be written. To face this period of unrest, we need to be realistic. The illusion that everything will return as before is misleading, first of all because it prevents the process behind the original meaning of the term “crisis”. Selective pressure is very useful: it forces you to look for new opportunities, rekindles creativity and modernizes the functioning of previous models.
Another illusion is that “everything will be fine. Unfortunately, many people are losing their jobs. Families will see their spending power shrink and uncertainty will curb their consumption in favor of prudent savings. The entire supply chain is affected, not only by wine but also by agricultural excellence, products with denomination and quality catering. Finally, part of the proceeds from food and wine tourism will be missing in cash. This is why an individual approach by each player in the Italian wine supply chain is urgently needed, based on observation, evaluation and discernment of how to get back into the game.
So may this period of crisis, which has mercilessly shown us the critical elements, give us the strength to reflect on how to be reborn.
21st March 2021,