ITALIAN WINES WIN ABROAD BUT BREAK EVEN AT HOME. IN A WINENEWS SURVEY, TOP PRODUCERS ANTINORI, PLANETA, GAJA, CAPRAI, MASTROBERARDINO, BANFI, AND MASI CLAIMED FOREIGN SALES WERE GOOD (ON BOTH HISTORIC AND NEW MARKETS), BUT LESS POSITIVE IN ITALY

Italian wineries toast to their success abroad. “Even if the Italian market does not manage to reach a growth rate of more than 5% (though it has come out of its stagnancy of recent years), there is absolutely positive news from abroad where Italian wine, pulled by the restaurant business and the growing glamour of ‘Made in Italy’, has double digit growth rate margins, even with the continued weakness of the Dollar, on both the historic markets like the United States, Canada, and Germany (this last mentioned market is in the midst of an excellent upswing) and the emerging markets (though with lower numbers but higher potential).”
This was the general sentiment that has been registered in a survey by WineNews.it (one of the most popular web sites of the world of wine), which analyzed the declarations of seven of the most important and authoritative wine producers who have, “expressed satisfaction for the outcome of sales in 2007, even for the anticipated earnings for the year end festivities.”

Angelo Gaja, one of the most authoritative voices among Italy’s wine producers, sees an Italian wine situation abroad that, “…continues to sail at two speeds. Slow, very slow, for 25% of wine which will continue to sell at so-called reduced prices insisting on producing an anonymous product, entrusting it to obsolete or largely unqualified distribution channels. The foreign market responds very well, instead, to Italian wines whose quality is recognized, appreciated and supported by Italian restaurants that operate abroad, and who make use of adequate commercial channels, proposing prices within the 3 to 8 euro per bottle range, that is, the ‘popular premium’ price. Even in the 9 to 20 euro per bottle price range, the foreign market offers some interesting notes, but only for a certain number of small and medium artisans who have worked hard over the past twenty years and who have had the quality of their wines recognized by tasters all over the world, and for the most consolidated Italian labels, from qualified distribution channels capable of very specific and active promotion and which enjoys the respect of Italian restaurant owners. Currently within the top price range, the foreign market is still very reflective and recognizes about fifty Italian wineries in all, not more than five in a vertical position. For these effectively rare wines, with a supply that is largely inferior to the demand, they depend on a solid credibility that was acquired years ago, a recognition of the quality attributed with regular continuity by experts world wide, a consolidated demand from a clientele of experts and enthusiasts, the capacity of these wines to excite, and an elevated level of discipline and rigor by producers. On the Italian market, it is still a brawl because there is a large overlapping of supply. Producers steal one from the other the space in sales points. In supermarkets, over 75% of wine is sold at under 3 euros per bottle. To fulfill the wishes of clients, it is permitted to let them believe that it is possible to find a great wine even at these prices. There are still, however, an encouraging percentage of new consumers who want to learn and to try”.

According to Renzo Cotarella, General Manager for the Marchesi Antinori, one of the main companies responsible for the rebirth of Italian wine around the world, “I generally see a normalizing phase, even if the wine market remains, evidently, a very competitive market. The products of quality and the most affirmed names have a great opportunity but, historically, after a euphoric phase at the end of the 90’s, and a crisis at the beginning of the millennium, today, we can finally register that the market is growing in a physiological and not a pathological way. Overall, the Italian wine world can look with optimism at a brief average period, the emergency situation of one or two years ago already seeming far off. In synthesis, today, one drinks better and spends less than five, ten years ago. The Italian market still remains difficult, with a confusion of new proposals that cannibalize every price sector. Low cost wines are selling well, as well as wines in restaurants under 40 euros per bottle, representing a niche interest. Abroad, the situation seems more legible and positive, apart from a penalizing weak Dollar that has, for the first time, kept Italian wines from being the most remunerative. The German market is coming back though it remains very competitive, and Russia is going well but, in general, with markets like England’s, European markets are in rapid expansion. There is good potential, at least for our wines, in countries like Kazakhstan and the Baltic Republics. Markets like Poland, Romania, and Bulgaria, where Italian cuisine is missing, are still difficult. I hope that my generation” – concluded Cotarella – “manages to see the explosion on the Chinese and Indian markets, for now, only partially open to iconic wines and with a preference for very low cost wines.”

Enrico Viglierchio, General Manager at Castello Banfi, one of the leading companies of Brunello di Montalcino, is certain that, “Italian wine is doing very well in the U.S., which remains our top market, while in Germany there is a ‘small upswing’ in act. The area of Eastern Europe is growing, with good performances in Russia and encouraging development even in countries like Romania and Czechoslovakia, where the Italian wine market is just forming now. In Asia as well, the principal markets are growing, where the price is not what counts, but the fame of a wine’s name. There are markets to cultivate with promotional activity and true education on Italian taste (where Italian restaurants remain fundamental ambassadors of our wine). I see a certain renewal even in Italy, where consumption has stabilized and a certain normalizing of the market is in act, with a tendency towards certified denomination wines in both the low and high price ranges, while mid-priced wines are still suffering, penalized by the enormous abundance of labels.”

Lodovico Antinori, the founder of the Ornellaia Estate and now the head of the Biserno Estate in Bolgheri, has a somewhat opposing opinion. “I consider German, Swiss and Austrian markets traditional consumers of high end Italian wines, but who, today, are in a sort of refusal of these wines and I think of those markets as in stand-by, destined to last through time. I am, instead, concentrating my energy on countries like Russia and Dubai, a sort of Las Vegas of the Middle East, and I intend to study the capacities of absorption of a market like India, which I think has a lot of potential and a lot better than the Chinese market, which may be little more than a trend. In India, I think that there exists a new bourgeoisie with good economic possibilities and culturally prepared for wine because they have often studied at Oxford and Cambridge, championing an entirely European way of life. The United States still represents our reference point market and important signals are arriving from Canada and the Northern European countries of Sweden, Finland, and Denmark, but also Lithuania. England is continuing to take on a growing importance, a market that is not ashamed of buying from Australia rather than Chile wines with a more advantageous quality-price relation, but, who, at the same time, are interested in high-end production apart from that of France. The newly rich Russians regularly consume fine Italian wines. So-called ‘cult’ wines appear regularly on dinner tables.

Diego Planeta, one of the creators of modern Sicilian winemaking, considers the demand for Italian wines abroad to be very strong: “absolutely alive and with an export trend with good growth. The competition is very strong, evidently, but Italian wines have a good return, regardless of the fact that they are not supported by strong and unified promotional politics. The Italian market is more problematic, where a myriad of new companies, incapable of getting on markets abroad, make the internal market tendentially chaotic. On small markets where it is possible to create around the world many small niches end up creating a discreet critical mass. Wine is a small merchandise that is, in the end, in a small market and must work on any possible commercial outlets.”
Marco Caprai, the entrepreneur who knew how to construct the international image of Sagrantino Montefalco, commented that, “there is a good response coming from the historic markets in the U.S., Canada and Germany, and Eastern Europe is also growing, with Russia leading. But it must also be emphasized the ever increasingly important role of small markets like Lithuania or the Maldives. In the first one, we are building a market for local consumption, while in the second we must satisfy requests from, above all, tourists. But, apart from the obvious differences, they are promising markets that we must organize better and on which we must be more present. Even in Italy I see a bit of an upswing with rhythms that are not very sustained, but are continuous.”
Piero Mastroberardino, the head of the historic company in Campania explained, “There is a consolidation in act of the historic markets of Canada, the United States, and especially Germany. But there has been a certain positive ferment registered in countries like Russia and Brazil. Many new markets are opening up, but they must, however, be followed adequately and organized… The situation is more tired on the Italian market, on an upswing, however, in respect to how it was in 2002, for example.”

And Sandro Boscaini, President of Agricola Masi, one of the historic names among Veneto wines, notes that, “The U.S. and Canada are markets that are going very well, regardless of the weakness of the Dollar, while it is harder in those countries in which wine is produced. Korea, China and Thailand are markets to cultivate with attention, building a culture of Italian wine, also necessary because in these markets there are beginning to be satisfying numbers. In Italy the highest demand is still for regional and denominational wines.”