ITALY – ON-TRADE: Different Strokes

Food-friendly, diverse and complex – Italy’s wines are out to show restaurateurs that there’s much more to them than Pinot Grigio. Clinton Cawood reports

Italy has a wide selection of styles and price points to offer the on-trade and yet, despite achieving some success with top-end wines, the majority of sales are still reliant on lower price points, leaving much of this country’s potential unexplored.

The most obvious and successful setting for Italian wines is, of course, in Italian restaurants. As Claudio Gambarotto, European export manager at Cavit, explains: “It’s the driving force for Italian wines. Consumers buy a package of Italian lifestyle. And Italian wines are designed to accompany food, so this is the best place for showing Italian varietals and styles, as well as different regional characters of the wines.”

Dermot Magee, sales and marketing director of Fratelli Martini, agrees, saying that this provides a platform to sell “better-quality Italian wine than in other on-trade channels. It’s not unusual for Italian places to sell styles not easily sold in other venues, such as Dolcetto, Barolo or high-quality Valpolicella”.

Sergio De Luca, buying director at Enotria, points out that “super-premium Italian wine is also doing well, but is increasingly hard to sell, with pressure coming from the declining Italian restaurant scene.”

However, he also believes that there is significant potential in Italian restaurant chains.

Untapped potential
Outside this sector there is a lot of untapped potential in the on-trade. Magee believes that “all the big business in Italian wine is at the house end, and usually blends of a local and international varietal”.

This leaves vast areas of the trade for Italy to take advantage of. As Ethica’s UK sales manager Jonathan Farrar explains, “Italy is doing very well at entry level, but needs to focus on the mid-range – around £18 to £20 on a restaurant list.” He specifically lists gastro-pubs and pub groups as having potential, given these venues’ focus on food. De Luca confirms that “gastro-pubs are a great new channel for Italian wine”, adding that “the lack of Italian brands does not impede their development in this sector”.

“There’s a big interest in Italy up to the £30 price-point, in gastro-pubs and brasseries with international wine lists,” confirms Tim Tweedy, on-trade sales manager for Liberty Wines. “The big thing that’s changed in the past 10 years is the prevalence of Australia. Italy can fight back, however, and is desperate to get more exposure in the on-trade.” Simon Legge, European marketing director at Brown-Forman Wines, is even more optimistic, arguing that “Italy was the first Old World country to feed off the slowdown in growth of the New World. And Italian wine is an easier sell than German or even French wine”.

Zafferano’s sommelier, Enzo Cassini, believes that, in the on-trade, “the top end is the most important, because once you have established a reputation for diverse, complex, high-quality wines then they have to be listed by all types of restaurants.” Despite this, Italy’s reliance in the UK is on that ever-present staple, Pinot Grigio. Farrar explains that, for the general consumer, “Pinot Grigio is the only Italian grape variety”.

Go-go Grigio
As PLB’s Alex Caneti simply states, “Pinot Grigio is the superstar in the the off-trade, as well as the on-trade.” The downside of this varietal is that it does not necessarily encourage much trading up.

Caneti explains that while the off-trade has the capability of stocking various Pinot Grigios at different price points, “the on-trade doesn’t have that opportunity, so they go for the lowest common denominator, whereas retailers are keen to move the consumer up”.

Despite this grape variety’s possibly detrimental impact on Italy’s average bottle price, there are undoubtedly benefits to be gained from Pinot Grigio’s enduring popularity. De Luca points out the “benefit that the grape variety has brought to Italy in terms of consumer awareness, and how to use this success to attract consumers to further Italian wines”. Speaking about the unending success of this grape variety, Magee believes that “if you’re on a roll, this is the time to introduce people to other things. It’s time to be thinking about Nebbiolo and Gavi, for example. The US has been selling bucketloads of Zinfandel – why has Italy not succeeded with Primitivo?”

A potential hazard of Italy’s reliance on Pinot Grigio has been the enthusiasm with which other countries have begun to offer the same varietal. “There is a guy out in California who is claiming to be the biggest producer of Pinot Grigio in the world, but I have my doubts about that,” says Canetti. “It is becoming ubiquitous as an international style, but there is so much in Italy, and they’re very competitive. The quality’s gone up, and there’s more being produced.” As De Luca confirms, “87% of all Pinot Grigio in the UK is being sourced from Italy.” And one thing that cannot be denied about Pinot Grigio, as Caneti confirms, is that “it is the consumer’s choice”.

Gambarotto confirms that “Californians have been very aggressive in the UK market, but for the UK consumer, Pinot Grigio has to be an Italian product.” Farrar agrees, saying that “we don’t consider any other country that is currently producing Pinot Grigio a threat”.

As for the future of Pinot Grigio, Tweedy has some predictions. “It’s like Australian Chardonnay a few years ago. People were saying ‘what happens now?’, but it was just the end of a certain type of Australian Chardonnay.” For now, however, the varietal looks set to stay. Farrar believes that the offering of Pinot Grigio is developing. “Wholesalers and the on-trade are offering several different quality levels of Pinot Grigio. Fine restaurants almost always want a DOC Trentino wine, but for those places just wanting a pouring Pinot Grigio, they’re often happy if it is Italian and says Pinot Grigio on the label.”

Outside the UK and the US, the Pinot Grigio phenomenon is not as significant. As Legge says, “I don’t think that Pinot Grigio is such a big deal in other markets.” Farrar confirms that “other markets are more into some of the classic and slightly more expensive Italian wines, such as Montepulciano, Ripasso and Barolo.”

Good-looking diversity

Furthermore, as Gianni Segatta of Alivini believes, “In the UK the sales are based on prices only, but in other countries there is more of an open mind towards quality and presentation.” The latter is indeed an advantage that Italy has over other countries. According to Magee, its “presentation in terms of packaging is a big extra card. To give the retailer and consumer a nice label, with a nice heavy bottle, adds value. It just adds that edge”.

One thing that Italy certainly does not lack is a diverse range to offer consumers. “We are noticing some growth in some of our more premium wines, like Amarone and Soave. Most good restaurants would have an Amarone on their list, for example,” says Legge.

Another variety showing great promise from Italy is Prosecco. As Gambarotto confirms, “between cava and Champagne, there’s nothing”. He goes on to say, “Prosecco is growing. It’s very successful in Germany and in the US.” Magee also believes that “cheaper sparkling wines have a great future, like Prosecco”. He suggests that “everything’s about trying to find a hook on which consumers can identify with something”.

Magee goes on to say that “if you’re looking for the next rising star out of Italy in the next few years, it’s probably Gavi. It’s not huge volume, but is a very stylish wine with the same kind of credentials as Chablis. It’s this top end that is worthwhile – the future lies in getting Italian wine up the ladder.”

Caneti believes that “there is a great future for Chianti, with more branding and more serious players in the market. It’s a very exciting story at all price points”. De Luca also includes premium wines such as Chianti as showing potential, citing recent research conducted by Enotria. He also notes “increasing loyalty to Southern Italian wines, specifically Sicily”.

A winning combination
The challenge with such a wide variety from Italy is, of course, encouraging consumer trial. Gambarotto believes that “if we can convince restaurateurs to have quality wine by the glass, that will help consumers to have one glass of good quality wine, and try unknown varieties or denominations. Throughout the on-trade, Italy has the possibility to get volumes if you give the consumer a chance to taste.”

Only one part of the wine trade is not effectively catered for by Italy, according to Tweedy. “Top-end Italian whites have nothing to rival Burgundy. There’s not much beyond £20.”

The future for Italy in the on-trade looks positive. A combination of Italian restaurants and the ubiquitous Pinot Grigio provide a solid base, complemented by a rising demand for a number of classic premium wines. Italy undoubtedly has the necessary ingredients for maintaining its importance in UK on-trade wine lists.

Pizza the action
It is difficult to think of a better setting for selling Italian wine than an Italian restaurant, with the right food offering, the interest in the country in general and the expectation of a broader Italian wine offering. One major UK chain, Pizza Express, has taken full advantage of this. A recent overhaul of its wine list has been very successful for the chain of about 320 restaurants. This kind of scale provides certain freedoms when compiling a list. For example, as the chain’s head of food and drink Tim Gambrill explains, “We originally decided that we needed a really strong house wine – something that was affordable and went well with the core offerings. We developed a blend specifically to go with our dishes.”

Master of Wine Adrian Garforth consulted on the new list, ensuring that it matched the extensive food menu. Despite not being focused on particularly high price points, Pizza Express’s list features an interesting range, including a Nero D’Avola and a Grillo. The list also highlights a number of Sicilian wines (including the house wine), to complement a Sicilian emphasis on the menu. “We have a Primitivo on there which has been applauded,” says Gambrill. “Our customers are quite experimental. They’re the type of people that aren’t afraid of paying more if they get good quality.”

The secret for Gambrill was creating a list that was more consumer-focused. “The previous list was a little bit fancy, and a bit exclusive. Our brand is inclusive. When we ask customers, they mention a great casual dining experience, and part of this is a wine list that doesn’t tie you in knots.”

From a very different perspective in the Italian restaurant sector, the sommelier at Michelin-starred Zafferano, Enzo Cassini, is able to successfully list very specific wines. “On the white front we have seen the Arneis grape from Piemonte begin, rightly, to develop an excellent reputation. On the red front, varieties from the south are showing well, such as Aglianico from Campania.”

© db February 2007