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Wine Tourism: Italy investing more into marketing

To encourage Americans to buy more Italian wines, the Ministry of Economic Development has instructed the Italian Trade commission to study and implement the largest promotional project of Italian win

To encourage Americans to buy more Italian wines, the Ministry of Economic Development has instructed the Italian Trade commission to study and implement the largest promotional project of Italian wine in the US (2017), with an investment of $22 million over 3 years, according to Michele Scannavini, Worldwide President of the Italian Trade Commission, ICE Agency. A major focus of the marketing effort will be to educate consumers on the diversity of the Italian wine market with a focus on grape varieties.

Fortunately for Italy, many Americans drink Italian wines (32.4 percent) as it generates $1.65 billion (January – November 2016) for the Italian economy. In fact, Americans consumed 5.9 percent more Italian wines in 2016 than they did in 2015. People who live in New York, California, Florida, Illinois and Texas drive consumption, representing 50 percent of the market. These consumers are spending $20+ per bottle demonstrating a strong interest in rose, organic and lesser-known indigenous varieties.

White wines rank first among Italian wine imports and account for $634 million (38.3 percent share of market) while red wines generate $567 million and own 34.2 percent share of market. Sparkling wines deliver $324 million and control 19.5 percent of the market, with Vermouth and flavored wines accounting for $48 million and a 3 percent market share. Italian Vermouth and flavored wine markets grew 18.1 percent over 2015 and control a dominant position for this beverage category.

Sparkling wine is the only category in which Italy comes in second, behind France, in terms of value with 32.1 percent market share. The French still dominate this market by owning 58.5 percent of consumer interest.

Carlo Calendra (Ministry of Economic Development and Italy’s Permanent Representative to the European Union) stated, “The educational role of the Vinitaly International Academy is fundamental. Once you get to a certain level of quality, the battle in international sales is all waged over the customer knowing and getting closer to the product. And so, the educational aspect is more important than the marketing. In other words, you cannot have a real marketing strategy without an educational strategy.”

Italian Wines + The American Palate

At a recent educational seminar for wine journalists, educators, buyers and importers in Manhattan the diversification of the Italian wine product and the growing interest in Italian wines was discussed by executives familiar with the domestic and international wine industry.

A welcome was offered by Francesco Genuardi, Italian Consul General of New York.

David Lynch, the author of Vino Italiano, Editorial Director of the e-commerce wine retailer, SommSelect, and a sommelier, moderated a panel of professionals in the wine industry.

Research on the Italian wine market was presented by John Gillespie, CEO of Wine Options. Gillespie is also a member of the Wine Market Council and formerly headed the Bordeaux Wine Information Bureau. He also was a founding partner in Wine Colleagues, a wine business advocacy organization.

Stevie Kim is the Managing Director of Vinitaly International and responsible for programs that include OperaWine, Vinitaly International Academy, Vinitaly Wine Club, VINO, HackWine, and Wine2Wine. Her projects focus on using innovative channels to communicate and celebrate Italian wines abroad with an emphasis on social media.

Michele Scannavini is worldwide President of ICE Agenzia (aka the Italian Trade Agency). He enters the wine space after a career that included fashion, cosmetics, sports cars and gourmet foods. He was associated with P&G as a Brand Manager, the Marketing Director for Galbani (a cheese brand), VP of Marketing and Sales for Ferrari, the CEO for Fila and repositioned the brand as a leader in sports apparel and footwear. Scannavini was also the President and CEO of Coty and on the Board of Directors of Tod’s Group.

Joe Campanale has a background in restaurants and food/beverage. He co-founded dell’anima, a West Village spot known for a lively chef’s counter, homemade pasta and an extensive Italian wine list. He has also been associated with European Management Company. Currently he is developing his own wine label, Annona, launched in partnership with Third Leaf Wines. His organic wines can be found in NYC at The Nomad, Daniel, Charlie Bird and Mark Forione.

Leena Baran is the Senior Manager, Import Wine Buying, with Total Wine & More where she is responsible for increasing the sales of Italian wines.

Buy: Glass or Bottle

According to Rob McMillan, executive vice president and founder of Silicon Valley Bank, the future growth of the market for Italian wines may be in the hands of the Millennials (21-37 years of age). This group accounts for 16 percent of wine sales, larger than the oldest generation or Matures (68+ years) who account for only 11 percent of sales. Baby Boomers (50-67) remain the largest consumer block, and responsible for 41 percent share of market; however, this number appears to be declining as this group reaches retirement age. It is suggested that Generation X (38-49) will exceed the Boomers as wine consumers by 2021 with the Millennials will be important by 2035 (or earlier).

Missing the Brand

It may be wonderful to list the hundreds of different Italian grape varieties, and ego-enhancing to know the significance of terroir on the outcome of the wine. It may also be self-indulgent to be able to detect the subtle nuance of peach or plums on the palate. However, at the end of the day, when sitting at a restaurant table or preparing dinner – the wine selection would be much easier if there was a BRAND associated with the product.

The fashion industry knows that consumers will pay large amounts of money for a Chanel or LV bag, a pair of Jimmy Cho shoes and a Fendi leather skirt. The difference between just “a bag” a pair of shoes or the leather skirt??? The BRAND and the amount of money the consumer is willing to pay for the label.

For some reason the wine industry (except for a few examples such as Gerard Bertrand and Taittinger which are French) the BRAND has not received the attention the product deserves.

Robert Joseph, a wine writer and commentator has determined that that brand is the most valuable piece of real estate in the world. Look at the wine sector and it is easy to determine that instead of branding the product making it easier for consumers to make a buying decision, the producers are building barriers. To become embedded in the human brain it is necessary to think Ralph Lauren, Tommy Hilfiger and Tiffany. No Italian wine maker has built a BRAND.

The wine consumer and the wine producer are not speaking the same language and even appear to be living on different planets, according to Damien Wilson, Hamel Chair in Wine Business at Sonoma State University. The wine trade is based on self-promotion while the consumer if focusing on the fun of the product. The wine producers are talking to themselves while the consumers are talking to each other, expressing their feelings about the delicious beverages in their glasses.

Unless (or until) the wine industry gets onboard with a complete understanding and acceptance of BRANDING the producers will continue to struggle.

Bela Szabo, Strategy and Innovations Planning Director at DDB Advertising, considers the importance of branding. For wine the marketing strategy should be about how the product improves the quality of life for the consumer and focus on fundamental human values.

The wine industry is challenged as most products cannot be differentiated (from a consumer’s point of view), except for region or grape variety; however, a BRAND would help the consumer make a buying decision in favor of the producer savvy enough to have developed a BRAND identity.

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