Allegrini 2018

Wine promotion: new vision and new tools needed in the pandemic era

The Ministry of Agriculture has made managing CMO 2020/2021 funds more flexible. But we need a change of pace in the wine system
Wine promotion: new vision and new tools needed in the pandemic era

The international wine trade market, which has never closed, is entering a completely new phase. Up until now, at least regarding Italian wine, exports to world markets have held their own. However, the pandemic is widespread and not over, as it has impacted many countries in the world, starting with the US, which alone is worth 25% of Made in Italy wine exports around the world, and suggests that probably the worst is yet to come. This is the perspective, due to the numerous restrictions and difficulties of being able to travel freely and peacefully from one country to another, which will complicate the work of producers and export managers for a long time to come; therefore, they must rethink promotion. Nobody knows whether this is a period of transition like we have considered it over the last few months, or it will last a longer period of time.
Everything that revolves around traditional promotion - events, fairs, wine dinners, and so on – has almost stopped (though it seems some things are starting to slowly restart around Europe). Plus, the various projects financed by the CMO Promotion evidently have not seen and will not see the light.
The funds amount to millions and millions of euros, indispensable for Italian wine, which absolutely need to be reprogrammed, and consequently, moved to other projects. The projects will have to be on a different level, and not provide for the physical presence of entrepreneurs and managers, but rather using virtual formats and a comprehensive plan focused on online activities. Further, it must be organized and set up, quickly, because if there is one thing that the Coronavirus emergency has taught us is that decisions have to be made fast. This invitation regards everyone, including producer associations, the Ministry of Agriculture and the Regions, because some steps have already been taken, in legislative terms, but there is much more to do. Maybe it would be a good idea to take advantage of the opportunity to create a single body for the promotion of Italian wine, which is a request that has been around for a long time, and from many sectors. Or, at least, join forces in more efficient and cutting edge actions.
The world is changing rapidly, and so are consumers and their approach to the market. To lose resources that have already been allocated is a luxury that Italian wine cannot afford.
This is the reason why, regarding those projects that will not see the light, and still have not been able to be reconverted, perhaps it would be more appropriate to give up the CMO funds and allow those who are behind in the ranking, and that have spending capacity (we remind you that following the emergency, the co-financing quota of the CMO increased from 50% to 60%, ed.), to systematize the funds that, otherwise, risk returning to Brussels. That would be an enormous setback, because the Ministry of Agricultural Policies, in agreement with the Regions, in its decree no. 6986 of July 2nd, has already taken some steps. For instance, the time limit for submitting promotion projects has shifted first to October 15th, then to March 31, 2021. This will allow businesses, and business groups, more time to reconvert their projects.
Digital conversion will be easier for the larger and more organized companies, which can count on well structured promotion and sales plans, on a sales force distributed throughout the territory and on figures such as the brand manager (who can absorb up to 20% of the budget of a project). Therefore, their promotion mechanisms are managed directly by distribution, and accompanied by advertising plans.
The companies that, instead, did not have a well-adjusted promotion plan on tastings and wine dinners, nor on fairs organized by third parties, will definitely have more issues.
The Ministry of Agriculture decree, which revised the entire function of the CMO Promotion, using rather complicated variables (changes to the programs and promotion activities, rescheduling the amounts, and so on) still allows some flexibility in managing funds. The decree goes beyond just reprogramming, which is often not simple, and also includes the spending power of individual companies. It allows, within some limits, revising participation fees of each firm, so that those who are having problems can lower their fees, and those who have resources can invest them. Further, companies can move from one expense item to another quite easily; for instance, from planning an event to advertising, some expense limits and proportions are considered, but even more, such as a variant to the project.
The tools to rethink promotion are available. They can of course still be improved upon. Now, though, more than ever, the Italian wine system really needs to change pace, and though taking into account the diversity of the thousands of its companies, it has to be able to indicate a few fundamental objectives common to all. This, at least to defend their market shares, and the leadership positions gained over many years of hard work, in which many producers, with the support of representatives and institutions, have worked restaurants, clubs and fairs all over the world. It will be vital to maintain those positions, to be ready to start up again when the world returns to normal.
Losing or wasting resources, at this stage more than ever, would really be an inexcusable mistake.

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