Questions from Vinitaly
The following questions and answers were part of Angelo Gaja’s address last month at Vinitaly, the Italian wine industry’s annual trade fare.
QUESTION: Can the largest producer of wine survive on exports alone? What are the risks represented by financial fluctuations and the aggressive marketing and distribution tactis of the so-called “New World” competitors?
ANGELO GAJA (AG): It’s the producers’ job to apply themselves in understanding the dynamics of the markets and to decide how and when to approach them. However unique they are for their size, the leaders of various categories — like Santa Margherita, Campari, Armani, Barilla, and Ferraro — have shown that the domestic market must be tended two with great care.
QUESTION: What’s the nature of the deficit in the Italian market? Is it economic or cultural? Or is it a question of marketing?
AG: A question of marketing? There are 35,000 producers in Italy and they all market their products in their own ways. There are more than 1,500 journalists who write about wine either occasionally or primarily. There are more than 500 wineries who sponsor journalism prizes. And there are more than 50 guides that judge the wines. Wine conferences, wine tourism, public wine tastings, radio and television shows on wine, and the wines bloggers’ dissertations… The wine world bubbles with life and is the envy of politicians interested in promoting tourism and their regions. The same holds for service-oriented associations and bankers who would like to find a way to get a piece of the pie.
We’re used to all this commotion and we couldn’t live without it. There are many of us who believe that some of the public monies earmarked for promotion are being wasting. There are those who have proposed combining those monies in a command center in charge of promotion.
But how would we avoid such a body from becoming yet another gravy train for politicians and the privileged? Who would direct such a body? What would be the basis of its authority? Would it be able to work for the interests of all categories? My own recipe is this: in order to reduce the cacophony of voices, 50% of the subsidies earmarked for the promotion of Italian wine should be redirected to create entities intended to raise awareness of Italian wines in foreign markets. These monies could also be use to open more Italian culinary programs in the BRIC countries (Brasil, Russia, India, and China).
QUESTION: Why, conversely, are exports continuing to grow?
AG: The export trend continues to grow because over time those Italian winemakers accustomed to exporting their products have helped to build demand. Such demand does not benefit them alone. It also subsequently bounces back to Italy where importers look for other Italian producers who are able to provide similar wines at better prices. Or superior quality or exclusivity of products not widely distributed. Vinitaly is Italian wine’s stage and its function is to accommodate importers from all over the world. For years now, Italy has been the top exporter of wine in terms of volume. And the same was true in 2010, while France remains the great exporter in terms gross sales. In terms of quantities, France exported 50% less than Italy in 2010. If the French decide not to tear out some of their vineyards, they will be forced to export even more wine. Italy’s average price per liter on the world market is 2.5 times less than that of France. Italians need to sell more wine and to do so, they will need to improve both quality and marketing.
Having said that, there’s no denying Italy’s success. Whom do we thank for it? Native grape varieties? The land itself? These are just some of the factors in wine production. Thanks goes to the 35,000 Italian wineries, including the more than 25,000 artisan, small- and medium-sized producers who apply themselves through sacrifice, passion, enthusiasm, and enterprise.
The wines of artisan producers are often recognized for their quality and this helps to consolidate public perception of Italian wine. Artisan producers represent a counterpoint to the large wineries who sell all or some of their wines as bulk wine. This excellently integrated system functions superbly.
Fragmentation in wine production is common in European countries. The new world has its own peculiarities. The tired old story that Italian wines are ill-prepared to compete on world markets because of fragmentation has been laid to rest by the success of Italian wine exports. The same holds for the notion that Italian wine could not hold its own because of the dead weight of too many small producers who didn’t know how to market their products because they were fragile and destined to collapse on the shelf.