Italy – Trade Talk

WE ASKED: In which markets should Italy concentrate its efforts in 2006? See the replies from Giacinto Giacomini (CAVIT); Stefano Girelli (Casa Girelli); Gianni Martini (Fratelli Martini) – and many more

“Considering the limited generic support, Italy has done remarkably well to retain market share, especially given the decline in volumes of Lambrusco and other sweetish wines. Italy should work at establishing brand loyalty for key DOC and DOCG wines such as Soave, Orvieto, Frascati and Chianti. There was a time when these wines were probably better known because they were synonymous with Bolla or Ruffino, but as such brands have declined, nothing has taken their place. Italy must rebuild confidence in these wines, particularly in the off-trade where the offering is often lacking in regional clarity.”
Nick Tatham, business development manager, Lane & Tatham Fine Wines

“Our focus will remain on our key market for Italian wines which is the UK. This is a challenging market but the opportunities are there for those producers/ distributors who can meet the needs of both the retail buyer and the consumer, while ensuring the long-term survival and growth of the category. In order for Italy to grow and compete with the New World, it is crucial that it increases its average bottle price – currently £3.46 (ACNielsen MAT to 26.11.05), way below the market average of £3.84 – and this is what we’re trying to achieve with a quality brand such as Da Luca. Italy also needs to form a cohesive, generic body for the UK.”
Claire Whitehead, Italian agency executive, Western Wines

“The UK should continue to be a key market for Italy.  Its light, unoaked, elegant white wines, are ideally suited to the increasingly sophisticated UK wine consumer. A lack of strong brands, however, continues to be a stumbling block. Organic growth for the US is paramount, although it’s becoming more brand-led by the day: not one of Italy’s strengths. The Canadian east coast is one to be grown; Ontario with such a high Italian population can provide growth. On the west coast the free market and oil-rich province of Alberta also has potential. And Southeast Asia is responding to more interesting styles of wine, which is Italy’s strength.”

Damian Carrington, head of marketing, Enotria Winecellars

“Italy is performing relatively well in a good cross-section of international markets compared to other Old World producers such as France. This is especially the case with its red wines in northern Europe. However, New World wines are generally outperforming Italy because they have stronger, better supported brands. The key focus for Italy should be the US as it offers the greatest value and margin potential for imported wines in general. It offers growth for both New and Old World wines (Italy up 7% in 2005), in both the on- and off-trade sectors. The US offers the greatest potential for new brands and the wine market is in long-term growth. Italian producers need to develop new, exciting brands and revitalise some existing ones.”
Simon Legge, European marketing director, Brown Forman Wines

“The Italians have always done well in German-speaking countries and the US. The big players have, however, increasingly looked at the UK, Russia and the emerging Asian economies. Russia in particular has bought into the Italian dolce vita food culture and will become a leading market in the near future. The Italians are beginning to merge their companies so that they can compete better with the New World threat and this will mean a more dynamic approach to the UK in particular.”
Alex Canneti, business development manager for Italy and Spain, PLB Group

“The US and UK are still very important markets which Italian wineries should approach in a more strategic way than in the past. On UK shelves it is impossible to find a ‘real’ Italian brand, a ‘made in Italy’ like Armani or Gucci in the fashion field. The developing markets like Russia, India, China and Korea are also interesting. However, they do not have a strong wine culture and the initiative of private companies should be more supported by institutions – the Italian Trade Commission.”
Carlo Pasqua, chairman, Pasqua Vigneti e Cantine

“I would dedicate 80% of marketing resources to traditional markets: the US, Germany, UK. Investment in new markets is too time-consuming and only generates low volumes. Small estates would do better to concentrate on the European on-trade, providing support at a regional level. Medium-sized producers should triple their marketing budget to restyle and improve their wines, support on-trade distribution at a national level and keep an eye out for off-trade opportunities. Large-scale producers should concentrate on generating large volumes through aggressive marketing, invest in partnership projects with national distributors and review their distribution costs. Paramount for all is to be pro-active, and innovative in providing local sales teams with new proposals.”
Giacinto Giacomini, general manager, CAVIT

“The UK has been our primary focus for 30 years, and this will continue with brand-building in the national accounts, and a push into the independent trade with our higher value wines. In the US, we have to ask ourselves if there is life after Pinot Grigio, and be ready to react when this bubble bursts. The Far East has huge potential, but is a sleeping giant, so while we will continue our efforts in this part of the world in 2006, we don’t expect to make enormous inroads – it is as hard to sell wine in the Far East as it is to sell sake in the UK. There is a tremendous difference in culture to overcome, but when this happens we need to
be ready!”
Stefano Girelli, managing director, Casa Girelli

“Gruppo Mezzacorona will concentrate its efforts and establish new distribution alliances and marketing support, especially in Germany, the US, Canada and Northern Europe. The very competitive domestic market needs more attention to defend established positions, especially in the on-trade. Eastern countries will be an important focus for the future but not a priority for 2006, where our attention will be more dedicated to markets such as Europe and the US.”
Claudio Rizzoli, MD, Gruppo Mezzacorona

“For us, the UK and German markets are of crucial importance, as well as enlargement in the Eastern European countries which are becoming important for Italian wines. We have also focused our attention on the emerging Far East countries, and a study regarding the Chinese market is being carried out. The Australian market, which started for us in 2005, is responding well to the Canti brand. In 2006 we are going to focus more attention on the US market which so far has not expressed the potential we expect. As far as products go, there are emerging products such as Prosecco. In the on-trade our aim is to promote high-quality wines such as Dolcetto or Barbera because the aperitif trend is tending towards the great red wines. This trend has already gained ground in Italy and we would like to export it to the UK.”
Gianni Martini, president, Fratelli Martini

“It is very important to have as large a distribution as possible, and to find a niche market which is still profitable can be a relief to companies. But if we want a bright future we still have more to do in countries like the US, UK, Japan and Germany. The increasing success of Italian food is a great opportunity to sell better Italian wines. We have to show consumers that the taste of Italian wines is a perfect combination with pizza, pasta and other Italian-lifestyle food. Not forgetting that the US and UK are often the consumer trend-setters for the rest of the world.”
Stefano Tombesi, marketing director, Moncaro

“The Far East presently accounts for only 4% of exports but is of great economic importance and shows a great liking for Italian products, in particular food and wine. ICE, therefore, is giving particular attention to promotional activities in South Korea, Japan, China, Taiwan and Hong Kong. Europe is another area of interest where recent EU integration of Baltic Countries, Poland, the Czech Republic and Slovakia has resulted in a significant penetration of Italian wines. Russia is also targeted, given that in the first months of 2005 exports increased by 75%. Attention given to emerging markets will obviously not divert attention from important markets like the UK, ranked third in order of importance for Italy, and which is in continuous expansion.”
Stefano Raimondi, head of wines and beverages, Istituto nazionale per il Commercio Estero

db February 2006