ITALY: A blanco check

After price hikes, will the consumer continue its love affair with Pinot Grigio? Can Italy maintain its grip on this varietal? And what of other Italian whites? Clinton Cawood investigates

It’s probably safe to say that Pinot Grigio wasn’t just a passing fad. When the uncomplicated, affordable Italian white wine began its seemingly spontaneous rise to popularity not too long ago, flummoxing critics as it went, it wasn’t entirely certain whether it was going to last.
But now, accounting for the staggering proportion of Italy’s sales as it does, there is far less doubt. The positive sales figures in recent times for Italian wines, and its white wines in particular, seem largely attributable to this one grape. Simon Legge at Brown Forman Wines (importers of Bolla)  confirms that Italy’s white wine sales are “good overall, but this is down primarily to Pinot Grigio’s continued popularity”.
For better or worse, Pinot Grigio has a proper foothold now, not only in the UK but in a number of Italy’s other important export markets, such as Germany and the US. Legge speaks of it “overtaking Sauvignon Blanc as the number-two grape to Chardonnay”. Cavit’s Claudio Gambarotto succinctly says, “It is now a well-established international grape variety.”
This has happened very fast, however, and all of this demand has, predictably, resulted in reports of shortages of the grape, with consequential price increases from growers. While supply of Pinot Grigio has been a concern since at least 2006, reports of diminished yields from last year’s harvest suggest this will be a far greater issue this year.

Price rises
In practical terms, 2007’s Pinot Grigio harvest was indeed lower in many regions. As Tesco’s senior product development manager, Pierpaolo Petrassi MW, confirms, yields were down “from 5% in parts of Veneto, to 25% in Sicily”.
The price increases are just as real – possibly more so. Gambarotto believes that: “The situation is quite serious. The prices demanded by the growers have increased dramatically – up to 70%. Some increase is reasonable, given that in the last year and a half the price has been too low. But only 5% or 8% is sustainable.”
Alfonso Cevola CSW, Italian wine director for Glazers (importers of about 9% of Italian wine into the US), confirms that the overall 2007 harvest was low, but that this will only affect certain areas of Pinot Grigio production. In a report for Glazers, Cevola expresses the belief that a small harvest “isn’t necessarily a bad thing. World wine glut and bulging storehouses aside, this could allow for a moment of adjustment… a year in the long-term outlook most likely won’t affect the growth patterns”.
He goes on to suggest that “it sounds like the Italians are trying to convey the perception that supplies will be scarce in order to raise prices”.
Gambarotto, too, believes that “it’s not true that there is limited supply. There is enough to supply the market”. A price increase, however, seems inevitable. Ethica’s sales and marketing director, Stefano Girelli, confirms this, adding: “We will see how the consumer reacts.” This is a critical point, given this varietal’s reputation as an affordable option.
Tesco’s Petrassi is optimistic, however, citing “growing sales of more premium styles including versions from Friuli (Tesco Finest), Trentino and Alto Adige.” Elisa Pierato, Enotria’s Italian wine brand manager, believes that “on the shelf, Pinot Grigio is getting higher prices, but whether they’re going to sell or not is another question”. At the top end, however, Pierato confirms that “these are such premium products that they are not price subjective”.

This is also a comfort for Anthony Bijleveld, area manager for Nosio, part of Gruppo Mezzacorona. He believes that “higher prices will be achieved in 2008, and the future will tell if and how this will affect demand”, but is nevertheless confident that Pinot Grigio sales will increase for the estate producer this year.
Fratelli Martini’s Dermot Magee identifies a potential risk for the UK market in the face of lower supplies if it cannot achieve higher prices. “We will see countries other than the UK sourcing Pinot Grigio from Italy and paying better prices,” which could effectively result in a shortage as supplies are diverted.
One drawback of the convergence of higher prices and limited supply is the greater motivation for “possible inscrutable activities among wine agents,” as Cevola puts it. He confirms: “We are already seeing problems with the use of other varietals going into the bottle and being called Pinot Grigio. Some of our suppliers have been reported to have had this happen to them – Ecco and Gabbiano were mentioned in a report I read.”
Gambarotto, too, says that: “This was one of my concerns in the past few years – there were some prices around that would have been impossible to get. We have, however, seen strong actions from police authorities – quite a few people have been jailed, and there has been more solidarity between bigger producers. The margins aren’t there to close an eye on this – there’s less room for these things.” Petrassi also believes that “authorities have clamped down on the less scrupulous bottlers supplying this [lower] level”.

A far more legal approach is to overtly blend Pinot Grigio with other varietals, labelling it accordingly. Petrassi points out that this “is a very UK-centric phenomenon and the main agenda here is to mitigate cost increases. In these cases the other variety exceeds 15% and this is stated on the label as a dual-varietal wine. Examples also exist where this is done for stylistic reasons.”
PLB’s Nick Tatham MW confirms that, “Pinot Grigio blends using mainly Garganega or Chardonnay are appearing fairly commonly, and there will be more of them in order to keep prices down.”
Legge draws the conclusion that: “Greater demand and supply constraints, underpinned by greater control over ‘what it says on the tin’ inevitably mean we are facing price rises early in 2008. Quite how the consumer reacts to this will be a good acid test for Pinot Grigio’s popularity.”
It will, of course, also be a test of how loyal consumers are to Italian incarnations of this grape, as the opportunities for other countries to provide cheaper Pinot Grigio increase. So far, however, Italy seems to have maintained a significant degree of ownership over this varietal. As Girelli confirms: “I haven’t seen any from outside Italy that have really had success. Pinot Grigio means Italy in the eyes of the consumer.” Gambarotto uses Hungarian supplies of this varietal as an example of this, saying: “We saw that in the past, but for some reason for the consumer it’s not the real Pinot Grigio.”
Magee believes that “when [consumers] look for Pinot Grigio they go to the Italian shelf in the supermarket. Even if it has to rise in price, I think it’d still be relatively competitive against most other markets.”
The growth and interest in Italian white wines is not limited to Pinot Grigio, for a number of reasons. Gambarotto explains this by saying that in the overall wine market “there has been a consistent offer of red grape varieties, but in whites it hasn’t been as interesting a selection of wines. The consumer is still looking for more from whites, particularly with lifestyles changing, diets changing – perhaps less alcohol content as well. But they want a white wine with character.”

According to Gambarotto, this is prompting a consumer shift towards other grapes. There is another possible reason for this shift, however. Legge returns to the issue of increases in the price of Pinot Grigio, saying that this may result in “migration by price sensitive, Italian-focused retailers to old stalwarts like Soave and Frascati.”
For Moncaro’s Stefano Tombesi, this could have a positive effect. He explains: “Pinot Grigio supply is particularly topical this year and this will doubtless lead to an increase in price. However, the market doesn’t usually accept price rises, and while this could be a negative development for Italy, of course it could be an opportunity for other white wines such as Verdicchio.” This is a varietal which Tombesi believes shows great promise, saying: “It is old, in the sense that it has been around for a long time, but it is also new because it has improved in quality thanks to improvements in winemaking technique. It is interesting because it tastes Italian.”
Endrizzi’s export manager, Thomas Kemmler, also lists Nosiola, Müller Thurgau and Pinot Bianco as “not yet real alternatives, but people are looking closer at these wines”.
When it comes to introducing new wines, however, according to Magee, “The fundamental problem is getting awareness and understanding of a varietal.” Girelli agrees that, “If you put a Fiano on a winelist, how many people will dare to buy it if they’re not familiar with the varietal?” He goes on, like many others, to mention Sicily’s potential for white wines, saying: “This area, despite what many think, can still grow white wines with good acidity.” He specifically mentions varietals like Grillo and Catarratto from this area.

Alternative varietals
If there is one white varietal from Italy that is consistently mentioned as showing promise it is indeed Fiano. Bijleveld confirms that “there is a lot of talk about Fiano”. Legge has noticed that, “Gavi di Gavi is gaining some ground and may attract some extra business.” For Pierato, however, these other varieties are “an addition, not a substitution” for sales of Pinot Grigio.
Tesco’s Petrassi, however, says: “We have seen a need to develop other options to take some of the pressure off Pinot Grigio and to create a platform for sustaining that growth should these sales ever start to wane. We have been targeting several varieties and appellations very successfully over the last couple of years. Examples include Fiano and Gavi.”
Realistically, as Girelli says, “There isn’t another Pinot Grigio around the corner. We have Chardonnay, Sauvignon, and Pinot Grigio, and the fourth is a long way away.” Tatham points out a major limitation: “There is much talk about Fiano and other more esoteric varieties, but such wines are in relatively short supply and fairly expensive.”
If nothing else, it seems that supply will be the major subject of discussion in Italian wine in coming months – that and Pinot Grigio, at least for some time to come. 

© db February 2008