Croatia’s wine industry had a notable year in 2023, with wine producers reporting a consolidated net profit of nearly EUR 6.0 million, more than double the EUR 2.5 million profit recorded in 2022, according to data from Croatia’s Financial Agency (Fina).
A total of 275 wine producers contributed to this surge, achieving a combined revenue of EUR 141.9 million, marking a 12.9% increase compared to the previous year. Despite these gains, rising costs continue to pose challenges, especially for smaller producers and the country’s winegrowers.
Revenue Growth Amid Rising Costs
The increase in revenue was offset by a corresponding rise in costs, which reached EUR 134.4 million, up 9.9% from 2022. The industry’s profitability was supported by key players, with Agrolaguna leading the charge as Croatia’s top wine producer, generating revenue of EUR 20.3 million. Vinoplod-Vinarija followed with EUR 8.6 million, while Djakovačka Vina reported revenue of EUR 6.1 million. These top companies played a significant role in the overall positive performance, benefitting from strong domestic demand and growing interest in Croatian wines internationally.
Challenges for Croatia’s Winegrowers
In contrast to the overall rise in profits for producers, Croatian winegrowers saw their net profits decline from EUR 4.5 million in 2022 to EUR 3.3 million in 2023. While their consolidated revenue grew by 3.0%, reaching EUR 48 million, their costs increased by 5.9% to EUR 43.9 million, eating into profit margins. This highlights a significant disparity within the industry: while larger wine producers are thriving, winegrowers—who often deal with more variable production costs tied to agricultural activities—are feeling the pressure from rising operational costs.
Iločki Podrumi topped the list of winegrowers, with a revenue of EUR 10.7 million, followed by Saints Hills at EUR 3.8 million and Gianfranco Kozlović at EUR 3.5 million. These larger winegrowers are somewhat insulated by scale, allowing them to absorb increased costs better than smaller operators.
Employment in the Wine Sector
The Croatian wine industry also contributed substantially to employment, with 1,542 people employed by wine producers and an additional 649 employed by winegrowers in 2023. This employment stability is crucial for rural communities, particularly in wine-producing regions where the industry plays a central role in local economies. However, the rising cost of labor, coupled with increased production expenses, could pose sustainability challenges for smaller wineries and vineyards.
Outlook and Strategic Moves for 2024
As Croatian wine producers look toward 2024, the industry’s prospects appear bright, though not without challenges. Export growth will be key, as international interest in Croatian wines provides opportunities to increase profitability. To manage costs effectively, some producers may explore innovations in production processes or consider strategic collaborations to boost operational efficiency. For winegrowers, diversification into higher-margin products, such as premium wines, could offer a path toward improved profitability, especially if coupled with focused branding and marketing efforts in foreign markets.
Source: SeeNews