Small winemakers in Piedmont struggle due to market evolution

Small is beautiful no longer works for wine. Balance sheets of structured wineries are good, small and medium-sized firms are struggling

Studio Impresa's report shows that profitability correlates with company size. In this perfect storm, cooperatives do better. Frescobaldi: "Encourage amalgamation, even with public funds"

Structured wineries' budgets remain stable, small and medium enterprises struggle

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Small is beautiful? "A slogan we must leave behind," because Italian wineries, which have an average vineyard area of 2.3 hectares compared to 10.5 hectares in France, must strive to grow in size to face the perfect storm in the sector (contraction of exports, decline in consumption, shift of products, aging of the target market, climate change). To achieve this "it is desirable to encourage mergers also with public support." These are the words of Lamberto Frescobaldi, president of Unione Italiana Vini, during the presentation at the University of Verona of the fourth report on the financial statements of wine companies, prepared in collaboration with Corriere Vinicolo by Studio Impresa - Management DiVino.

Company balance sheets: who is growing and who is not

The analysis of the director of the research center Luca Castagnetti was very clear: if we look at the economic performance of Italian wineries, we see that the small and medium-sized companies are struggling, while the more structured ones are doing well. Do not be fooled by the fact that the sample of 877 companies surveyed (large, medium and small private and cooperative companies) showed an overall sales increase of +2% (+0.7% after inflation) in 2024, with gross margins of 10.5%, an improvement of 7.4%. This picture is an average and further analysis shows that as many as 415 companies of the total lost profitability, with performance related to company size. Compared to the report a year ago, the number of companies with negative gross margins increased from 49 to 85.

Performance and profitability related to size

Looking first at revenues, companies with a turnover of more than 50 million euros (which, although they represent only 6.2% of the sample, account for more than half of the total turnover of 13.4 billion euros) recorded an increase of 8.4% in the period 2022-24; followed by companies with a turnover between 20 and 50 million euros with +4.5%, while in the category between 10 and 20 million euros, a decrease of 9.9% was registered. Finally, for companies with a turnover of less than 10 million euros, which make up 71% of the sample, the share of the total is 17%, with performance between 2022-24 that managed to reduce losses in the three years. Of particular note is the better performance of cooperatives.

In terms of profitability, there are striking differences between firms of different sizes. Small firms are losing ground. Both those with sales of less than EUR 5 million (-16.4%) and those with sales between EUR 5 and 10 million (-6.4%). In contrast, the profitability of medium-sized companies (turnover between 10 and 20 million, +9.1%) and large companies with a turnover of more than 50 million euros (+4.9%) is increasing. Companies with turnover between 20 and 50 million euros show a slight decrease (-1.2%).

Working on management skills and company size

"The wine world must turn the crisis and difficulties into opportunities to restore balance," Castagnetti said, listing a number of possible strategies: the ability to be flexible and change with the market, more detailed management analysis, more knowledge and incentives that guide business choices. Also because "the figures for 2025 may be very different from those analyzed here," he warned.

Chairman Frescobaldi said the data of the past three years point to the need to "work in general on management, efficiency, but also on the size of our companies with a view to rationalizing resources and economic sustainability. We have long called for a structural reform of the wine sector to support the competitiveness of the entire sector."

Small businesses must commit to innovation and wine tourism

Finding new markets is an objective of Italy, but at the same time we must be given the opportunity to do so. And we must continue to invest in wine tourism, a sector still in its infancy. Today, 81% of Fivi companies do so. The vulnerability of vertical farms is a fact, but we must also realize that without winemakers, wine is no longer an agricultural product."

Looking to 2027 and the unity of the wine sector

While waiting for the analysis of the balance sheets for 2025, it is worth focusing on 2027, the year when there should be some signs of recovery, according to Professor Davide Gaeta (University of Verona) in his speech: "We have seen that the economy has proved cyclical over the past 60 years, as has the wine sector. We have experienced different periods of declining consumption and growth phases. Now we are in a period of decline, but the leading international experts point to 2027 as the year of recovery of the global economy."

"In a complex phase like the current one," said Luca Rigotti, responsible for wine at Confcooperative-Fedagripesca, "the Italian unions, despite differences of opinion on the wine package,have come to the conclusion that cooperation and unity are necessary. The Fivi and the Coldiretti have just joined the wine sector council. This is now an additional asset for the whole sector."

Photo accompanying this article:  Barolo DOCG Corini Pallaretta from Cascina Gavetta (Roberto & Silvio Cogno)  - https://www.madeinpiedmont-wines.be/vini-rossi/barolo/cascina-gavetta---barolo-corini---pallaretta-2019?language=en&products_id=3659