ITALY: Motoring Along

Italian wine exports are turning over nicely, but the country’s vino industry has realised it could drive worldwide sales further still. By John Downs MW

After a period of falling wine production, 2006 saw Italy return to its average of 50 million hectolitres with total wine exports boosting its bank balance by a cool e3.15 billion. Keen to export even more, the Italians invited the opinions of journalists from over 35 countries last September at the Abruzzo 2007 Food and Wine Worldwide Convention. 
They didn’t always hear what they wanted but knew they couldn’t ignore this rare collection of international opinion. “Like our Italian football team we need to check out our opposition’s strategy,” noted Italian deputy minster of agriculture Guido Tampieri.
Complacency is the enemy in Italy’s traditional markets and to survive the New World onslaught they need to renew the confidence of their established consumers. A fragmented marketing strategy doesn’t help the cause. “Italy is Germany’s number-one importer but to stay there it needs to show a united front, not its usual restrictive regional marketing,” explains German journalist Ugo Galliussi. “We mustn’t work independently but together as ‘Product Italy’  to make our mark against New World competition,” agrees Coldiretti representative Domenico Passetti.
Surprisingly, it appears that many Italians don’t fully understand their own export markets. “Distribution is critical within the Swedish monopoly so without an importer it’s difficult, something not always appreciated by some Italian producers,” notes Swedish journalist Bengt Göran Kronstam. With French being spoken in Quebec and English in the other provinces, Canada is also a demanding marketplace. “In French speaking Quebec, French wines take a 29.4% share, while Australia takes only 6.4% of the market. British Columbia is the reverse; France takes only 4.6%, compared to Australia’s 17%. The Italians need to fully understand this phenomenon with particular reference to where they stand in this marketplace,” adds Canadian journalist Nick Hamilton.

Adapting to the world’s emerging markets is an even greater challenge for the Italians. The Russian market is famously bureaucratic with importers having to negotiate 11 controlling bodies before reaching the shelves. “The Italians are our third largest importer behind France and Spain but they have Chile and Argentina snapping at their heels. A better knowledge of our administration, distribution and distances by many producers would improve Italian fortunes,” notes Russian importer Anatoliy Korneev.
Brands are increasingly important to world sales but it’s here where the Italians are really struggling. Taking 73% of sales, brands dominate the UK shelf – problem is, the Italians have very few brands. “The top Italian brands sell 3m bottles in total in the UK, while Jacob’s Creek sells 3m bottles on its own,” points out Simon Bradbury, a director at Guy Anderson Wines. “Rosetta”, produced by Bava in Piemonte, could be their inspiration. “It’s only one of our popular brands but sells for e30 in the shops and e45 in our restaurants,” says South Korean journalist Eun Sue.
With the average bottle tag at a meagre £3.99, price is king on  the UK shelf. Incredibly, Italian prices are even lower. “The average price of Italian reds is £3.55, while the whites are way down at £3.40, which, given their dominance in whites, highlights Italy’s problems on the UK market,” concludes Bradbury.

Italian grapes, regions and wines are complex so the plea from the emerging markets for simple education came as no surprise. “With a population of 127m, older people dominating sales and 25% of young consumers showing an interest in wine, Japan has a wide ranging market that’s thirsty for knowledge, not only on the wines but where and how to enjoy them,” says Japanese journalist Akio Sato.

Food and wine matching
Italy’s gastronomy continues to be a rich vein of worldwide sales but it could be even richer. “Alsace has produced a great marketing campaign in America giving wine suggestions with different dishes. The Italians should follow suit, especially as they have such a wonderful tradition of restaurants across all our states,” notes US journalist Elin McCoy. “In South Korea we don’t have a European culture so food and wine matching suggestions must be fully explained, not only for Italian but also for our native dishes,” notes Eun Sue. 
The Italians, famous for innovative design, are more traditional when it comes to wine packaging. Screwcap, bag-in-box, and Tetrapak are pooh-poohed by many Italian producers but Kronstam warns against this blinkered approach. “Don’t ignore bag-in-box as it’s the fastest growing sector in world wine and brings big profits. Bag-in-box sales also boost bottle sales of the same wine,” he says. 
Italy’s complicated labels came in for some stick. “Stuck in Italy we can’t begin to imagine how intimidating our labels are in the Far East! This equals rejection in new markets,” snaps Passetti. The DOC system makes change difficult but progress needs to be made if the Italians are to reach their sales potential. “DOC should have a minimum influence on Italian wines. It’s bureaucratic and our 400-plus DOC’s equal confusion. Its important to put ‘Italy’ on the label but not DOC,” adds Passetti.

Not surprisingly, this met with some disagreement. “DOC should be used as added value and should be seen together with the brand to promote our entire production,” declares Roberto Verticelli, Abruzzo’s regional minister of agriculture.
It was left to one of the emerging nations, Brazil, to mention quality. “Italy is our second biggest European importer behind Portugal and although we respond to varieties and regionality, quality is very important in Brazil,” notes Brazilian consultant Antonio Petillo. “A reduction in yields would help,” adds Hamilton.
Italian exports are healthy but it emerged from the Abruzzo Convention that they could do even better. To their credit, the Italians welcomed the opinions of the world’s journalists; whether they’ll act on them is another story. If they don’t, hopefully they’ll listen to Giorgio Serra of Buonitalia: “We should stop listening to ourselves and listen to people outside Italy – there’s a world out there. Understand it and we’ll attract far more consumers”. I saw a Japanese journalist smiling.

© db February 2008