THE WORLD OF ORGANICS PART 1 – WINE: passing fashion or established phenomenon?

THE WORLD OF ORGANICS PART 1 – WINE: passing fashion or established phenomenon?

The topic of organic farming has been on our “table” for some years now and today we can probably say that it has transformed from a niche phenomenon to a choice that is increasingly conscious and valued by consumers. People are increasingly demanding, sensitive and interested in the quality and characteristics of food they put on the table for themselves and their families.

The reasons are mainly related to health and the environment, demonstrating a growing sensitivity that has contributed to the spread of organic products from small artisanal shops to the shelves of large-scale supermarkets.

In this article we will present a general overview of the organic world related to WINE, in the next one we will take a closer look at the entire sector of organic farming, focusing on fashions, trends and prospects for the future.

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ORGANIC WINE

A wine is defined as organic when it is made using 100% organic grapes grown without the use of synthetic chemical agents in vineyards, while in the cellar vinification must be done with the limited use of sulphites and certified organic wine products. Organic wine is a product made using a method of cultivation that follows precise rules, established by EC Regulation 834/07, which excludes the use of pesticides or synthetic chemical fertilisers.

ORGANIC CERTIFICATION

With the entry into force of EC Regulation 203/2012 in 2012 we can speak of organic wine and no longer of wine “from organic grapes” thanks to the possibility of certifying the entire vinification process and the processing of grapes as organic.

Organic wine is recognised by the presence of the Community logo on the label, a guarantee that certifies the wine’s entire production process.

In order to obtain organic certification and the possibility of displaying the relevant logo on the label it is necessary to undergo constant, strict controls by the competent bodies which, after careful analysis, certify companies’ compliance with legal obligations.

MARKET DATA

What then are the numbers related to organic wine in Italy and around the world?

Let’s start with the forecasts for the global consumption of organic wine found in the Organic Wine Report published by IWSR, the authoritative market analyst for the wine world, which states that the demand for organic wine will grow rapidly in the coming years thanks to the increasingly established preference of European consumers for sustainability and organic foods.

Research predicts that organic wine will reach 87.5 million 9-litre cases globally by 2022, recording the largest increases in the sector (+9.2% compound annual growth in 2017-2022).

Much of this growth will be driven by Europe, which will account for 78% of the global organic wine market by 2022.

Indeed, Italy is already among the leaders of organic production at a global level, ranking second in Europe for surface area dedicated to organic vineyards, after Spain and ahead of France, with the number of organic vineyards growing and currently at 105,384 hectares (70,791 organic and 34,593 in conversion, according to Sinab 2018). 12% of the total area is therefore cultivated organically, guaranteeing a total production of 500 million litres of wine (Coldiretti analysis based on Federbio data), with estimates indicating that “natural” areas have doubled in the past five years.

But has there been a positive response by the market? It would seem so, considering that organic wine (Infoscan Census data) showed an optimistic +18% in sales in 2018 compared to the previous year (a growth rate nine times higher than the sector average), reaching 4.94 million litres sold in the large-scale retail sector at a national level. Apart from the average, incredible increases were recorded in some regions like Piedmont (+415%), Emilia Romagna (+233%), Sicily (+176%) and Tuscany (+70%).

What are the reasons for this success? Certainly a strong preference of consumers, who find in organic wines the values (in order of importance) of naturalness, healthiness but also quality. For all these reasons, consumers of organic wine are willing to spend more (the average price differential in large-distribution retail channels is over 20%).

Preferred channels for buying organic wine remain hypermarkets and supermarkets (growing fast) and direct purchases from the producer/wine cellar, followed by wine and food shops specialising in organic products (falling).

Most organic vineyards are found in Sicily followed by Apulia and Tuscany, as can be seen in the charts below.

 

 

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When we cross ISTAT data on total area with Sinab data on organic area (in the table below) we find that (by 2017) the greatest penetration of organic vineyards is in Calabria and Basilicata, where they have reached 50% of the total, followed by Marche and Sicily where they account for around 35% of the vineyards. Then comes Tuscany at 24%.

The largest regions that are lagging on this front are in the northeast, with Veneto and Friuli Venezia Giulia at 5-6%. The other important region for quality, Piedmont, still only has 8% of organic vineyards: 3,300 hectares of a total 42,000.

 

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Returning to sales, Italian organic products are finding success beyond domestic markets. In fact, exports are also growing, still the most significant market for Italian organic wineries.

Who buys the most?

Based on FederBio data, Italian organic wine was exported to Germany for 33%, the United States for 12%, Sweden, Canada and Switzerland 8%, China 7%, the United Kingdom 6%, Japan 2%.

Other European Union countries account for 11% of Italy’s organic wine exports. Other non-EU countries 4%.

Summing up, for those who were considering entering this market which has shown a stable growth trend, the conversion of existing vineyards to organic and the production of certified wines would seem to represent an investment with a guaranteed success.