The Future of Prosecco Wine is Bright and Can Only Get Brighter!
Having grown up in the Prosecco region and spent most of my falls harvesting the Prosecco grapes as I grew up, I have been watching and applauding the phenomenal transformation of the once known as a local unpretentious light wine. Prosecco has become one of the great success stories of the recent Italian wine industry. It has brought unprecedented prosperity to the Veneto region, transforming local farmers into global entrepreneurs. The prosecco growth and success has strengthened Veneto as one of the leading entrepreneurial regions of Europe.
Prosecco is an Italian sparkling wine that is produced in the rolling hills of north-east Italy around the towns of Valdobbiadene (my favourite), Asolo and Conegliano Veneto. Conegliano being the native town of Alessandro Del Piero, the famous Juventus footballer. Prosecco is also since 2018 the world’s best-selling sparkling wine. In 2018, Italian wine producers bottled roughly 600 million bottles of Prosecco. Germany produced around 370 million bottles of Sekt, a local sparkling wine. Champagne produced 315 million bottles, while Spain produced about 216 million bottles of Cava, a Spanish sparkling wine. In 2020 prosecco sales contracted by 9% but despite the decline, it sold at least 480 million bottles. If you compare it to the 100 million bottles sold in 2008, you get a better sense of the extraordinary growth the wine has experienced recently. Prosecco consumption has also expanded thanks to the incredible success of the orange colored Spritz cocktail, which mixes Aperol (owned by the Campari Group), sparkling water, and prosecco. I like to take mine with an olive and a slice of lemon or orange. And if you like a stronger cocktail replace the Aperol with Campari as it gives it an extra kick.
Prosecco style is fizzy made primely from the Glera variety of grapes, even though in Veneto we refer to Prosecco as the name of the grape. The best produced comes from the traditional towns in the Conegliano-Valdobbiadene, and my favorites are around the Consortium of San Pietro di Barbozza (also known as Cartizze and the Cartizze Millesimato being the best). In order to keep up with demand, additional area covering towns of 9 Veneto provinces across the Veneto (Treviso, Venice, Vicenza, Padua, Belluno) and Friuli Venezia Giulia (Gorizia, Pordenone, Trieste, Udine) have been added to allow more production of Prosecco, this adds about Italy 58,000 acres of DOC production of Prosecco. Most of these have not been put into production yet but they should soon become operational. According to the San Pietro di Barbozza Consortium, the remaining available land could increase production by a maximum of 220 million bottles of Prosecco. This will only compensate for 3 more years of demand growing at the current pace.
The trend and the future:
From a market analysis, despite the recent slow-down due to Covid, Prosecco future looks brighter than ever and produces are continuing to innovate to capture new consumer segments. Among those, since 2020, Prosecco Rose (the pink variety) was given the needed designation of Prosecco Rose in spite of the change of its grape base which in pink prosecco will have Pinot Noir content of 15%. This is going to be a particular interesting consumer segment to follow as it appeals to younger global consumer that are seeking style, approachability, and seductiveness. The higher price point does not seem to be a barrier as it caters to consumers in the hospitality, retail, and gift space which are notoriously comfortable with higher price points. Based on the date we analyzed, we’re also seeing wine consumers turning to sparkling Prosecco for everyday at-home drinking occasions.
How can Prosecco sustain growth? This growth cannot continue for-ever, and Italian Prosecco producers, which are notoriously very conservative in terms of producing, financing, and marketing their products, should look at non-traditional ways to grow their market share. Among this, I would prioritize, wellness, innovative finance and Environmental, Social and Governance (ESG).
Wellness and Longevity: Prosecco producers should lower sugar content to appeal to wellness and longevity focused consumers. Most Proseccos have between 20–25 grams of sugar per liter, while I believe excellent prosecco can be produced with about 2–3 grams of sugar per bottle. This would attract the huge wellness and nutrition focused consumers that are moving away from excess alcohol, but that would be interested in a healthier option.
New Forms of Financing: The wine sector has been one of the least volatile sectors over the last 25 years giving significant financial returns to those that were able to invest. However very limited players were able to invest as this was a complex asset class mostly open to professional. This is changing now with the ongoing digital asset revolution, and wine backed Non-Fungible Tokens (NFT) is a growing approach to financing. NFT is a digital asset that represents a real-life asset including wine, art, and movies, that is unique and cannot be replaced or traded for another token of equal value. Essentially, NFTs will allow wine consumer to invest in wine through trusted platforms, thus accelerating wine finance, opening new trading opportunities for investors interested in the disrupting wine and digital asset future.
Environmental, Social and Governance (ESG): As many producers are now under increase environmental scrutiny from both the regulators and the consumers, to ensure that they are more supportive of the environment, the corporate rules and its employees, there is an opportunity for Prosecco to improve its ESG standing, while showing that the producers are investing in the future of its communities. By anticipating the ESG compliance requirements that are coming, Prosecco could implement better and more transparent environmental practices, thus gaining a first mover advantage to position the Prosecco brand as a committed market and societal stakeholder.