This question could be answered with why on earth not. Italy boasts some amazing exports, many that we’re well aware of: Internationally recognised luxury fashion brands such as Prada, Gucci & Fendi, the coveted furniture brands B&B Italia & Poltrona Frau, and of course for the car lovers, there is not only Ferrari, Maserati & Alfa Romeo, but also the Fiat brand, seeing a recent resurgence partly due to the popularity of the iconic 500, paying homage to the manufacturer’s 1950’s city car. When looking at Italy’s exports, it’s easy to see why in so many sectors, they are renowned for high-quality craftsmanship, great design and expert manufacturing. These exports form an integral part of the country’s economy.  In this report, we take a look into Italy’s response to the ever-increasing role marketing has on the evolution of the fine wine market, and how they are catching up to other established players in the market. We also dive into why we feel the future is a bright one for Italy, as well as highlighting regions outside of Tuscany and Piedmont that could be well worth watching.

When it comes to wine exports by volume, Italy boasts great success. So why when it comes to the collection of fine wine has France had such dominance? France has enjoyed trading to international markets, including England, since the 12th century, and the origins of AOC (Appellation d'Origine Contrôlée) date back to 1411. By the time of the Exposition Universelle of 1855 in Paris, when Emperor Napoleon III asked each wine region to establish a classification, the influence of ‘Cru’ on price was well established and gave France a huge advantage. This structure created a level of confidence within the wine loving community as well as within the wine trade at the time. The effect was similar to that of famed wine critic Robert Parker Jr’s grading system on the world of wine; it helped to propel the market to its current level and allowed for a clear understanding of quality.

As in France, wine is food within Italian culture, not a status symbol. The status of fine wines we know today truly began as emigration to the USA opened up new export markets.  Premiumisation, which was clearly evident within the French wine industry, didn’t emerge in Italy until the 1960’s, the same time that codification and vineyard specificity started to take hold in Tuscany and Piedmont. It’s no coincidence that these are the wine regions leading the charge for Italy within the market of fine wine. When you look at the relatively short time it has taken for Italian wines to join the party, you can see why we feel the future is not only bright for these regions, but also for the likes of Veneto, Friuli-Venezia Giulia & Alto Adige.

Let’s get into some numbers; The ‘Italy 100’ -a sub-index of the Liv-ex Fine Wine 1000 tracking the ten most recent physical vintages for five ‘Super Tuscans’ (Sassicaia, Masseto, Ornellaia, Solaia & Tignanello) and five other leading Italian producers- has risen 43% over the past five years. As the broadest measurement of wine performance, it’s important to recognise that certain products have considerably outperformed that figure. An example of this is the Sassicaia 2015, seeing a 20% increase in one month when given the accolade of Wine Spectator Wine of the Year in 2018. Examples such as this are important to demonstrate the express growth certain wines are experiencing in the short term. However, the Italian fine wine market really comes into its own over the long term; Sticking with Sassicaia, the 1985 vintage was released at today’s equivalent of around £10.00 a bottle. If you wanted to buy the same wine today, you’d be faced with an estimated purchase price of £2,500.00 per bottle. If you had a whole case in perfect condition, you’d be looking at close to £37,000.00, yielding a return of over 31,000 %.

More than the staggering returns Italian fine wines have produced, Italy also has better value entry points into the market. This has been a driving factor in the growing regional interest. In 2008, Bordeaux held 91.8% Liv-ex market share with French regions accounting for all but a 1.2% split between Italy (0.7%) and all other remaining regions (0.5%). To say the market has broadened would be an understatement. Although Liv-ex is just a fraction of the market, this sentiment is echoed in the global auction market, in retail, and in the appetites of collectors. Over the past week Bordeaux accounted for 41.6% of trade, other French regions taking up another 30.6% and Italy just over 20% (12.7% Tuscany, 7.6% Piedmont), with two of the top five traded wines by value (30^th June – 6^th July 2023) coming from Italy, a substantial change I’m sure you’d agree.

To give these stats some perspective, the Liv-ex Power 100 (produced in conjunction with the Drink Business Magazine) is an annual list of the most powerful brands in the wine market. In 2013, only 7 wines from Italy featured on the list. Fast forward to 2023 and that number has jumped to 12. This might not seem like a hugely significant jump but that’s more than all other countries combined outside of France (US 8, Spain 1 & Australia 1) with one of these wines breaking into the top 10.

With a maturing landscape and better access to a growing global audience, we expect to see further broadening and diversification within the market. Technology is playing a vital part in this shift, with critics also contributing to the market changes. As we watch the continued price movements of these top Italian wines, we expect that rise to lift not only the backbone of Italian fine wines but also wider regions, similar to the change away from Bordeaux dominance in France. In a recent annual report on Alto Adige, Monica Larner highlighted that the ‘’northern Italian wine region moves closer to icon status’’ each year, highlighting what a truly exciting time it currently is for Italian wines. This sentiment was echoed by leading online auctioneer idealwine S.A.S. who expressed a ‘dramatic rise in popularity’ for ‘non-French wines’, sales rising from 39% to 61% in 12 months. These wines also experienced a 53% growth in value and 32% in volume in the past year.

2022 proved an interesting year for many investors, with plenty investment opportunities to navigate. Gold has endured a challenging couple of years gaining only 0.5% last year. Most stock indexes registered drops, partly due to historic drops in the value of giants such as Apple and Tesla; Nasdaq lost 33.1%, S&P 500 lost 19.6%, Dow Jones lost 8.8% and Nikkei a respective 9.4%, with only the FTSE 100 closing in positive territory up 0.9%. These statistics help explain why 96% of wealth managers expect demand for fine wine to increase in the coming years. With increasing need for investment diversification options, fine wine is proving an integral part of many investors’ portfolios, not only forging an exciting time for Italian wine but the wider market in general. In 2012, Ledbury and Barclays Wealth and Management reported that 28% of high-net-worth individuals hold collections of fine wine, accounting for about 2% of their overall wealth. In 2023, research shows UK wealth managers and advisors have seen 40% of their client base hold wine, with an average portfolio allocation of 10%. Driven by supply and demand factors, the market of fine wine is ever-evolving. Now could be a great time to re-assess your investment portfolio, potentially diversifying into fine wine and more specifically, considering an Italian representation within your portfolio.

With appetites for Italian wines increasing, it is clear to see the ever-more impressive responses from Italian wines brands. From Sassicaia breaking into the Power 100’s top ten, to Ornellaia’s ‘’Vendemmia d’ Artist’’ project, wherein they ask a global artist to covey the personality of each harvest with a single word, as personally selected by Ornellaia’s Estate Director, Axel Heinz. Proceeds of this project are donated to the Solomon R. Guggenheim in New York. These brands plus many more are pushing innovation to assert Italy’s dominance within the global market. It’s safe to say that a movement that started in the 60’s is very much looking to build on its undoubted place at the top table of fine wine investment.