We’ve said it before and we’ll say it again – 2020 has been a difficult year for the Italian wine industry.
Of course, we have the pandemic to thank for that, in large part. And though the industry did a great job of getting back onto its feet after the initial spate of lockdowns, there’s no denying that the pandemic had its effects, just like it has on all types of businesses over the last few months.
However, even before the pandemic occurred, there were predictions that stated that 2020’s Italian wine harvest wouldn’t be as fruitful as those of previous years.
Now that the harvest is underway, we have some more solid figures. And while these figures may seem to be distressing at first glance, there’s a definite silver lining that runs through them.
A Smaller Harvest
Predictions made at the beginning of the year appear to be true. The Italian wine industry will produce about 5% less wine than it did in 2019.
In this case, the pandemic is not the cause. In fact, the industry made this prediction much earlier in the year due to a number of factors that might affect production. Principally, these factors came down to the climate. We’ve already written, at length, about the effects of climate change on grape production.
In 2020, we’re seeing those effects in action.
Unseasonable weather has a lot to answer for in terms of the diminished production levels. Frosty patches in some areas of the country did a lot to limit the growth of certain types of grape. And the result is that the industry, as a whole, will produce about 45 million hectolitres of wine in 2020.
But let’s put that figure into a little bit of context.
Yes, it represents a decline in production for the industry. However, 45 million hectolitres is still an enormous amount of wine. It’s unlikely that many producers will struggle to create enough wine to serve consumer demand. As such, we’re anticipating few ill effects from this smaller harvest, assuming that it’s a one-time thing.
That situation may change if this decline ends up being part of a downward trend over the next few years, however.
A Decline in Wine Exports
Recent data released by Coldiretti paints a more worrying picture about the state of the industry. Their research shows that Italian wine exports are on course to decline by about 4% in 2020. What’s more, this is the first decline that the industry has experienced in about three decades.
That’s certainly a cause for concern for wine producers. After all, it indicates a reduction in demand for the very product that they provide.
However, it’s also worth digging into the possible reasons for this decline. And while we can’t blame the pandemic for the smaller harvest, we can certainly point to it as a chief cause here.
In particular, the lockdown imposed on many hospitality businesses during the last few months has had a huge impact on wine sales around the world. Many of these businesses buy large quantities of wine to service their customers. Bars and restaurants, for example, need to have a constant flow of wine coming in.
However, those businesses had to close for several months in many countries in 2020. And even though we’re seeing many of them re-open now, there’s still a lot of uncertainty. In many cases, countries have placed limited hours on their hospitality businesses. Plus, there’s still a risk that some countries, such as the UK, may get plunged into a second lockdown in the coming months.
All of this adds up to a reduced demand from the B2B side of things for the Italian wine industry.
The impact on general consumers hasn’t been quite as heavy. After all, the average person can still visit a shop to buy wine or use an online supplier, such as Xtrawine. However, it’s possible that Italian wine hasn’t been a priority for many, especially those who’ve found themselves in difficult financial times as a result of the pandemic. As such, it’s likely we’ve seen a reduction in demand in this area as well.
Still, we’ve seen exporting declines of 12% to France, 14% to the UK, and a staggering 44% to China.
On the surface, those look like scary numbers. However, it’s important to remember that the pandemic is a temporary thing. According to Coldiretti, it’s likely that the industry will rebound in 2021, assuming all goes well with the external factors that caused the decline in demand.
The Silver Linings
So, it’s perhaps looking like a rougher year than anticipated for the Italian wine industry. However, there are a couple of silver linings that we can take away from all of this.
The first is one that we’ve already touched on. The pandemic has created a year where nothing has happened quite how anybody expected it to at the beginning of 2020. As the world gets an even greater grip on the coronavirus issue, we’re likely going to see increases in demand lead to more exports in the coming months and throughout 2021.
But another silver lining is that none of these distressing figures have anything to do with the quality of the wines that Italian producers have created in 2020. By all accounts, this year’s harvest looks set to produce some of the most exciting vintages that we’ve seen in years.
On the surface, the figures that we’re seeing from the analysts paint a picture that isn’t exactly rosy for the Italian wine industry. However, looking beyond the raw numbers shows us that things aren’t as bad as they appear. We’re living through unprecedented times, and yet we’ve only seen single-figure reductions in exports and production.
And what’s more, we know that the quality of the wines that Italy’s producers will create will be second to none. In 2021 we’re looking forward to a major rebound but we also want to stress that 2020 could have gone much worse.