WINE & RESEARCH - VINITALY 2006 – LARGE-SCALE DISTRIBUTION: AN INCREASINGLY IMPORTANT CHANNEL FOR QUALITY ITALIAN WINE SALES (OVER 62%). EMERGING WINES TOP ON SALES LISTS

In 2005 large-scale distribution wine sales surpassed the 62% mark for total sales, with a growth of 1% compared to the preceding year. This is the data that has emerged from the round table organized by Veronafiere during Vinitaly, at which representatives of large-scale distributions and consumer associations participated. In the past 5 years, large-scale distribution has registered an increase in value of 50% (for a total of 1.1 billion euros) and 22.5% in volume (reaching 5 million hectoliters), thus becoming the most important channel for wine sales.
There has also been a significant increase in the sales of wines with denomination of origin guarantees, a true sociological phenomenon, in which the average shopper is increasingly on the look out for quality wines on supermarket shelves. DOC (the denomination of origin seal) wines have, in fact, grown by 2% in 2005 and represent more than 52% of global sales among large-scale distribution wines.
The most popular price range for consumers is around 3 euros, and studies on quality/price relations demonstrate that products under 5 euros represent 80% of sales. However, the over 10 euro price range is steadily growing at double digit rates.
The most popular varieties sold at large-scale distribution levels in 2005 were (in order): Lambrusco, Sangiovese, Barbera, Trebbiano, Montepulciano d'Abruzzo, Merlot, Chianti, Castelli Romani, Cabernet, Bonarda, Marino, Chardonnay, Novello, Nero d'Avola, Verdicchio (source: IRI Infoscan).
The most popular 0.75 liter bottles sold at large-scale distribution levels in 2005 were (in order): Garzellino Coltiva Secco, Freschello Rosso, Freschello Bianco, Maschio Pinot Rosa, Tura Lamberti Tura Bianco, Maschio Chardonnay, Maschio Verduzzo, Garzellino Coltiva Amabile, Corvo Rosso, Aragosta Vermentino, Montepulciano Abruzzo Rocca Ventosa, Santa Cristina, GVP Sangiovese, Corvo Bianco, Bigi Est Est Est (source : Iri Infoscan).
The emerging wines that have marked the most progress in 2005 were: Grechetto and Sangiovese umbro (Umbria), Insolia and Grecanico (Sicily), Primitivo di Manduria and Negramaro del Salento (Puglia), Arneis and Dolcetto di Dogliani (Piedmont), Falanghina and Greco di Tufo (Campania). (Source: Auchan, Carrefour, Conad, Coop, Despar, Sma).
President of Federvini wine union, Lamberto Vallarino Gancia, noted that, “Large-scale wine distribution sales continue to increase: in 2005 by about 1-2%, while in the Horeca channel they fell by about 4-5% following an increased awareness in consumption. The relationship between products and large-scale distribution is varied: there are producers who sell almost exclusively in the GDO (Large-Scale Distribution Organization); others who do not want to be present within the GDO claim that it is impossible to participate both there and with restaurants and wine bars in order to avoid price confrontations; other producers sell in both the GDO and Horeca, but with two distinct wine lines and even with different products completely. In general, the relation between producers and GDO’s are tending to improve. One of the requests by producers is that a better wine selection be offered on large-scale distribution levels, starting by offering a shelf layout that is more similar in concept to that of wine bars, where there is a division made by color, price, region/nation, according to varietal types, and sales position it holds. Or even creating a corner for wines of the month and the latest arrivals for a system that provides culture and choices for consumers. The arrival of foreign wines on the Italian market is still not considered a threat because it represents a very small total volume of sales.
“On the other hand, we must note that on the foreign market New World wines are appropriating considerable volumes of sales in countries that do not have a strong wine culture, and where the winning elements are international grape varieties like Cabernet Sauvignon, Merlot, Shiraz, Chardonnay and Sauvignon blanc. But since Italy has the highest number of indigenous grapes (over 350 for more that 450 wines), it is clear that this situation could be exploited positively”.
Valter Vangelisti, the Buying and Markets Manager for PGC Auchan Spa food division, sustains, “Large-scale distribution is strongly involved in increasing the worth of quality Italian wines, for example, the so-called “wine festivals” organized by the GDO have greatly contributed to the diffusion and consumption of typical wines.
Auchan, which boasts over 3,000 labels, has worked together with the top wine companies for quality/price relations, to offer wines like the Primitivo di Manduria doc "Segnavento", that is an exclusive Auchan label, and which in 2006 received the impressive “2 glasses” vote in Guida dei Vini d’Italia wine guidebook. A large-scale distribution wine had never before received such positive results. And Auchan regularly exports its Italian wine abroad: quality Italian wines are, in fact, present on Auchan supermarket shelves in France, Poland, Spain, Portugal, and Japan”.
Marco Selmo, Carrefour supermarket Liquids Manager, pointed out, “The market trend for large-scale distribution has registered in the past 5 years an increase equal to +50% in value and +22.5% in volume. The weight of distribution channels is thus subdivided by volume: 67% in supermarkets, 19% in large-scale supermarkets, and 14% in small supermarkets. At the varietal level, optimum performances have been registered by Nero Avola with +70% in volume and +39% in value, and with Vermentino registering +16.3% in volume and 17.1% in value. Carrefour has imposed a strategy based on exclusive wine selections or, the “Carrefour Selection”, with a linear standardization of products and promotions based on volume (boxed wines). The foreign wine market doesn’t currently register as a threat for Italian wines because for the entire market it has a weight of only 1.8% value (-0.5%). It must be noted, however, that another trend has marked a strong repositioning of average prices within distribution (-17.4% for average price)”.
The director of commercial brand names for Conad supermarkets, Giuseppe Zuliani, stated, “In order to increase the value of quality Italian wines we have created areas dedicated to, and that are adequately displayed on shelves and/or displays that promoted wines from the regions in which each sales point is found. We strongly believe in communication and for this reason we dedicate ample space to wines from our in house group “Beneinseme” which has a mass distribution and proposes a thematic index (“Taste Itineraries”) dedicated to eno-gastronomic tourism in Italy and an index of the major events and festivities throughout the year that can be connected to characteristic regional foods. Conad is also involved in promoting quality Italian wine abroad. For example, during the month of May we offer the “Viva l’Italia” expo in all of our Leclerc sales points in France, during which we propose Italian wines like Lambrusco and Chianti. Thanks to the recent creation of Coopernic, the first European cooperative for distribution, we can significantly increase Italian wine exports. Coopernic, in fact, boasts over 17,000 sales points in Europe that include, along with Conad, Leclerc (France), Rewe (Germany), Colruyt (Belgium), Coop Swisse (Switzerland)”.
Ermanno Gargiulo, Wine Category Buyer for Coop Italia, affirms that, “The Coop has activated various projects for “in store” wine cellars with environmental control and ad hoc support information in several of its sales points, so that consumers, especially younger ones, have a more interesting approach, but that stays close to the supermarket so they can be “Guided”. We have thought of organizing shelves by dividing them by “region of origin”, then by typology/color, while the convenience levels can be read vertically. The “local, typical Italian goods” presidio is in our DNA, and therefore guaranteed to be rooted in the various geographic areas of our associates. The wine bar phenomenon has always pushed “drinking out of the boundaries”: and attentive to these needs, we find space on our shelves, as well as for classic French and Californian wines, for a good representation of Chilean, Argentinean and Australian wines that attract an ever growing interest”.
Carlo Macchi, eno-gastronomic journalist and director of the website Winesurf.it, discussed the importance of improving the presentation of large-scale distribution wines, a subject he has dedicated years of his time to. “In reality, there is not a defined language to communicate in detailed levels to wine consumers, or rather, to put experts in contact with inexpert final consumers. Large-scale distribution must try to provide for this lack with an approach that is based on both extreme simplicity and clarity in its proposal. The message must be written as little as possible, giving space to attractive and captivating graphics, that can be understood in the wink of an eye. The use of experts in the aisles is definitely valid for a public that is already knowledgeable, but it risks putting off the majority, not familiar with the lingo, nor the modes of a sommelier, nor the ‘public’ tasting of wine, or, drinking away from meal time and environments like restaurants, wine bars, and at home”.
Lorenzo Miozzi, President of the Consumer’s Movement pointed out, “Thanks to the sales from large-scale distribution, a vast assortment of typical wines are today accessible to all consumers, who have the possibility to find the wines that are the most satisfying for their organoleptic and geographic characteristics, and, above all, for their price. Thanks to a good quality/price relation, large-scale distribution contributes to the diffusion of the wine culture. It still occurs, however, to pay attention to competition practices that risk reducing the quality of products if one continues to search for the lowest possible price. As well, the consumer who arrives at supermarket shelves and would like to buy a bottle of wine, is often left without any assistance, neither with sales people present nor with a well though out division of wines on the shelves themselves. Therefore, large-scale distribution must still work at studying adequate communications and assistance formulas for consumers”.
Wine sector manager for Buonitalia Spa, Giorgio Serra, intervened on the theme of increasing the value of Italian wines abroad: “Buonitalia is involved in consolidating the presence of Italian wines on the International markets, confirming the high quality that distinguishes it from competing foreign wines. In order to realize this goal, Buonitalia, that has worked since its conception as a control room where all of the public and private protagonists must converge to promote Italian food and agricultural products, has created “Progetto Vino” to get institutions, regions, producers, and consumer associations together on this productive front in agriculture with the goal of creating a system network for internal support of the Italian wine sector. The creation of a network of regional wine bars is, according to us, an optimum instrument for the popularization of the value of regional diversities as a competitive factor for “made in Italy”. The competition that we are confronted with every day is very strong, both on the commercial and distribution fronts, and for this reason we are also debating with the main large-scale distribution operators in order to improve opportunities on international markets”.