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Conegliano Valdobbiadene Prosecco Superiore D.O.C.G.: a success story that has transformed hard work into value

The Denomination is in excellent health: sales abroad continue to increase; the number of sparkling wine producers is growing, as is that of those employed in the sector; and a generational handover is taking place, characterized by a significant female presence.
Conegliano Valdobbiadene Rapporto Economico 2018

On the threshold of the fiftieth anniversary of the Denomination, the study by Fondazione Nord Est retraces the history of the region and gives a brief socio-economic analysis that reveals the reasons for the current success of Conegliano Valdobbiadene Prosecco Superiore D.O.C.G..

By the end of 2018 growth of 1.7% is forecast, which will mean sales of almost 93 million bottles.

Today sees the presentation of the Annual Financial Report for 2018, drawn up as usual by CIRVE (the Interdepartmental Centre for Research in Viticulture and Oenology) and the Research Centre for the District of Conegliano Valdobbiadene, with scientific coordination by the CIRVE of the University of Padua. The figures that these bodies gathered and summarized are a source of great pleasure for the Conegliano Valdobbiadene Prosecco Superiore Producers’ Consortium, which notes with pride the increase in value – particularly on export markets – of its product.

The end of the year is a time for taking stock of the financial situation, and with the 50th anniversary of the Denomination coming up (Conegliano Valdobbiadene obtained D.O.C. status in 1969), the Consortium sensed the need for an analysis – commissioned from Fondazione Nord Est – of the origins of this important economic phenomenon in the Italian wine industry, which has had significant positive effects for the region of both a social and environmental nature.

“The forecast of Valoritalia for the close of the 2018 campaign amounts to around 92,980,000 bottles, and the analysis presented today by the CIRVE regarding the end of the previous year makes us proud and confirms our optimistic vision for the future. For a Denomination whose borders are the same as when it was founded, it is obvious that production is arriving at the limit of its potential expansion, so it is now logical to maintain more balanced development,” states Innocente Nardi, President of the Producers’ Consortium.  But the great result we can celebrate today is that we are seeing our product continuing to be rewarded by the markets, with ever more significant growth in terms of value (+ 2%, rising to +6.3% outside of Italy): a sign that consumers – even abroad – can recognize and are prepared to pay more for quality. The path we embarked on several years ago is giving us the results we anticipated.

This recognition of our worth is the best way to celebrate the 50th anniversary of the Denomination”.

2017 closed with 91.4 million bottles produced overall, with a total value of 502.6 million Euro and an average price per bottle of 5.50 Euro (ex-cellars). Compared to 2016, this means growth in value of 2% and in volume of 1%. The most relevant aspect is that the rise in value has been increasing uninterruptedly for five years now, which reflects a market trend that promises further positive developments in the future.

This recognition of financial value by the consumer is the latest consequence of the Consortium’s strategic plan, which includes action on various fronts, beginning with drawing up the Viticultural Protocol – now in in its ninth edition – and the subscription to it by the majority of the Consortium’s members. It should be borne in mind that production from vineyards managed according to the precepts of the Viticultural Protocol accounts today for 85% of the total. The Consortium’s strategy also embraces all the various aspects of sustainability, from operations to save energy throughout every stage of production to the enhancement and promotion of the region from the point of view of its history and landscape. Last but not least, there is the growth in the products of higher quality, such as the “Rive” (+ 5%) and organic wines (+30%).

The Denomination’s excellent state of health can also be seen in the fact that the producers of sparkling wine are now 185, and the number of those employed in the sector is also growing: +10% in the vineyards, + 9% in the winery, +3% of full-time oenologists, +7% of administrative personnel, and no less than + 40% for staff devoted to exporting,” claims Vasco Boatto, in charge of the District’s Research Centre. “Moreover, this growth is taking place within a context of generational handover and strong female participation: women now account for 41% of young people entering the sector. The Denomination as a whole – 15 municipalities between Conegliano and Valdobbiadene, includes 6,245 people employed in the production of Conegliano Valdobbiadene Prosecco Superiore D.O.C.G.”.

 

Analysis of the Italian market

At a national level, the market for Conegliano Valdobbiadene Prosecco Superiore registered sales of over 50 million bottles, with a value of around 280 million Euro. Essentially speaking, the situation is stable from the point of view of value and growing slightly in volume terms. But differences can be seen if one analyses the areas to which the wines are destined and their distribution channels. If in the North the product’s expansion cycle is reaching full maturity, one finds a positive dynamic in the Centre and South, where sales are increasing. Centralized purchasing offices are revealing themselves to be more receptive, and here the supermarket sector is playing a major role: it is in fact becoming an increasingly significant channel even for growth in value terms, with an ever more evident tendency to offer premium products. Also, there is very rapid growth in e-commerce which, even if it is still very limited in absolute terms, leads one to believe that this channel will witness important developments in the future.

 

Analysis of the international market

In 2017 exports continued to give us great satisfaction, with growth of 1.6% in volume but no less than 6.3% in terms of value.

The major European importing countries continue to show growth. Germany increased in value by 8.4% (and was practically stable in volume with sales of more than 7 million bottles), remaining the primary European export market for Conegliano Valdobbiadene Prosecco Superiore D.O.C.G.; it is followed by Austria (+14.5% in value and + 5% in volume), and the United Kingdom (+38.5% in value and +35% in volume).

The United States continues to be an interesting market due to its pace of growth (+16.4% in value and +17.8% in volume) and, even if other more recent destinations registered a modest contraction, the very important exception of China and Hong Kong (+14.3% in value and +6% in volume) is encouraging, as are the African countries. Other Asian nations (Taiwan, South Korea, Kazakhstan, Sri Lanka, Azerbaijan, Georgia, Armenia, Turkmenistan, Kyrgyzstan, Uzbekistan and Nepal) grew by a total of 14% in value and 9% in volume; it should be pointed out that the volumes exported here have more than tripled compared to 2012.

 

Distribution in Italy according to Nielsen areas and distribution channels

Conegliano Valdobbiadene Prosecco Superiore is continuing its positive performance in the supermarket sector which, partly thanks to the increasingly crucial role of the centralized buying offices, is growing considerably.

In 2017 the North-West came top for volume (up 6.6% over 2016) and value (up 11.8% over 2016); it was followed by the North-East with growth compared to 2016 of 6.7% in value and 2.6% in volume. However, the areas that accelerated appreciably were that of the Centre and Sardinia, which grew by 11.8% value and 8.9% in volume, and the South, which registered +19.3% in value and +17% in volume: these, in a long-term scenario, are establishing themselves as the markets of future expansion for Conegliano Valdobbiadene Prosecco Superiore.

The figures for 2018, which began to come in in October, reveal a similar upward trend.

 

Economic and social changes in the Conegliano Valdobbiadene zone: stories of success

Fondazione Nord Est was entrusted with the task of retracing the history of the Denomination in the last fifty years, using methods of demographic and economic analysis that serve to provide a description of areas and their populations.

From this research emerges a socio-economic development of our region that runs parallel to that of the Veneto Region, prior to taking a change of direction locally towards viticulture: from the beginnings of industrialisation in the early 1960s, passing through the North-East’s role as “the locomotive of the Italian economy”, and ending up with the zone’s transformation into an area devoted to farming and hospitality, as we know it today.

Analysing the demographic, educational, production and employment evolutions of the Veneto in parallel with those of the zone, one can see how the latter experienced a similar development to the Region as a whole.

In line with the economic growth of the Veneto Region, Conegliano Valdobbiadene also benefitted from the entrepreneurial abilities of its inhabitants. But, following the crisis of the industrial districts, this small zone was able to take advantage of the area’s ancient culture of wine production and invent a new type of business for itself: one that was linked to the zone’s agricultural origins, and that also benefitted from important institutions such as Italy’s first school of winemaking, located in Conegliano. Conegliano Valdobbiadene revealed itself to be competitive and innovative in the wine business, as well as being respectful of its unique countryside, which was a source of inspiration for Renaissance painters and 20th century poets alike.

The evolution of the local economy went through four principal phases, the first of which, in the 1960s, was characterized by the gradual healing of the emigrational haemorrhage that had hit the Veneto following the Second World War.

This was followed by the years of exponential growth of the industrial districts. This second phase, in the decades of the ‘70s and ‘80s, led to the Veneto becoming one of the driving forces of the Italian economy. During this period, while electrical appliances manufactured in Conegliano conquered the kitchens of the world, a number of sharecroppers decided to acquire the fields that belonged to large local landowners, thus creating (unintentionally at the time) a new path for the local economy.

It was their children who, in the 1990s, began to modernize the processes of production and so gave rise to the “Prosecco” phenomenon which, just a few years later, would start to spread all over the world. This, then, was the third phase, when the Veneto’s industrial acceleration gradually slowed down and the Conegliano Valdobbiadene area changed tack compared to the economy of the rest of the Region and of Italy, and found new life with a product that has now become a global icon of Italian know-how and creativity.

The last phase of the area’s development is the one that we are experiencing now, and today’s goal, in the words of the zone’s protagonists, is to affirm the value of our product and concentrate on promoting its region of origin.