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ITALY: It’s Amora!

“standfirst”>Italian wine continues to take an ever larger slice of the UK off-trade market, enjoying both volume and value growth. Jane Parkinson reports on the British consumer’s love affair with Italy.

Italian wine is the success story of 2009 in the UK. Italy, a culturally and vinously fragmented nation, has been enjoying volume and value growth in its collective wine exports to the UK off-trade for at least the last two years, much to the condemnation of its Gallic neighbours. As one UK supplier put it: “The French are saying, ‘How are the Italians doing it? What are they doing right that we’re not?’“

While growth may have ruffled a few feathers across the Italian borders, the UK is merely enjoying the fruits of Italy’s labour and as a result, if ever there was a case against the costly investment of starting a generic Italian office (in the hope of increasing export success), surely this is it. Generic body or no generic body, Italian success in the UK off-trade is simple – it’s down to customers deciding for themselves that Italian wine speaks of quality, says Christopher Carson, chief executive officer of Gruppo Italiano Vini. “I think Italian wine has accelerated in quality, I mustn’t be too smug but I was expecting it to rise again.” Meanwhile, Sergio de Luca, director of buying (Italy), for UK importer Enotria, backs up the positive banter and statistics, saying: “Italy in general shows an increase and it’s promising, especially in this sort of economic situation.”

For producers, success in this troubled time means more than producing good wine, the time has come to invest in marketing too, says Michele Rimpici of Cavit. “We’re not in an easy situation, nowadays you have to be very marketing orientated and not just focus on profits because it’s an achievement just to maintain a position in the market.”

Roberto Pinetti, marketing manager at Fratelli Martini, which owns the brand Canti, is equally candid about what his company needs to do to succeed. “We’re very conscious of the economic situation so we need to get more aggressive on promotions and prices and this gives us the solution. We are also dynamic, and this is one of the most important differences between us and other Italian companies, we are very proactive.”

The part played by Pinot Grigio

Even during the worst economic crisis for the last 70 years, the UK wine trade believes Italy’s diverse range of styles will continue to maintain and even grow its share of the UK off-trade market. Equally firm is the trade’s belief that the success is not purely down to the ubiquitous Pinot Grigio, particularly in the last 12 months.
Nick Tatham MW, director of Buying (Europe) at UK supplier PLB says: “Pinot Grigio is beginning to flatten out a bit at the moment, in terms of supply and demand.

Sparkling wine and Prosecco are having a good run and for Tuscany we’re doing very well with Piccini. In volume, we’re up 40-50% between 2007 and 2008 for Italy, and that’s entirely for red wines, nothing to do with Pinot Grigio. Having said that, there are going to be a number of whites that are going to move in behind Pinot Grigio, wines like Soave, Fiano and Cataratto. There’s a whole batch of them, people who like Pinot Grigio will also like these.”

Enotria is also feeling positive about alternative white varieties, as da Luca comments, “Pinot Grigio is essentially our main source of success [with Italy], but we’re trying to diversify with other wines, some aromatic whites from southern regions including increasing recognition of things like Fiano. It’s very positive to see people coming back and reordering these wines.”

However, from a retailer’s perspective, the classic wines of Italy have not always won over British consumers. Virgin Wines’ buying director Andrew Baker explains that his company “didn’t have a market [for Italy] five to six years ago, even though we did various things such as stocking brands to help people break into Italian wine. But it wasn’t received very well”, and so Pinot Grigio has become the main Italian representative on the company’s 300-strong list. Baker adds: “Our Italian range revolves around Pinot Grigio. We don’t feel we’re losing sales by not having other Italian wines, we don’t even have a Chianti at the moment. Our Italian volume and value are going up and it’s Pinot Grigio that’s driving it. Pinot Grigio is a benchmark but it’s not a quality benchmark.”

Despite this, Carson believes the quality of Pinot Grigio is constantly improving, and agrees with Tatham that other grapes can cash in on the better quality. “It’s no wonder why Pinot Grigio has had its success and generally speaking, the quality has improved. The point is that there are more prices to offer customers and there’s growing interest in things like Falanghina, Cataratto and in other varieties too, which are all getting distribution. But we need to keep all of this in perspective, even if these varieties grew by 50%, they would still be relatively small compared to Pinot Grigio. But Italy has still got to look at other products to show it can offer more than just Pinot Grigio. I think Frascato will come through quite strong, and I’m going to make sure it does.”

Other markets

As Italy continues to take a larger slice of the market, opinions are divided over which country’s share will consequently diminish. At Enotria, de Luca predicts France and Australia will feel the pinch of Italy’s success, saying: “Italy will probably take share off France in Europe and off Australia outside of Europe. I can’t see the likes of, say, Argentina being harmed because it has such small volume.” Carson, meanwhile, doesn’t agree that France will have its share eaten into, adding, “I don’t think Italy will necessarily be taking market share off France, people who were buying Old World wines will gain from the change in tastes.

"I believe that palates move on, tastes move on and now I believe it’s an interesting time for the Old World to have a big marketing drive because the wines do offer more competitive prices and the Old World has got to grips with some of the softer tannins against say, what it was like 15 years ago. Now it’s producing very easy to drink wine. So I think Italy is taking market share off some of the New World countries.”

As ever, the British consumer’s love affair with Italy helps to maintain Italy’s strong performance. The UK has long been seduced by Italian associations, as Carson elaborates: “I think Italy can answer the needs of the British consumer, it’s a great place to go on holiday, for fashion, for food, for culture. There’s only wine left to work on and Italy’s starting to address it now.”

This can be demonstrated no better than by Virgin Wines, as Baker outlines his plans for the foreseeable future. Despite an Ital-phobic customer base, Baker confirms that Italy is second (behind South Africa) on his “shopping list” of countries to crack. "We’re going to give Italy a go again this year and we’ve just started by shipping over  some Falanghina.”

So even companies that are not historically well disposed to stocking or liking Italy are keen to back the country, confirmation that the seduction of all things Italian, including wine, continues apace in the UK

Jane Parkinson, June 2009 

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