Italy is booming, bucking the somewhat flat trend of wine sales in the UK, and as such presents a great opportunity for retailers to capitalise on the incredible diversity offered by this dynamic country. Against a background of 3% annual volume growth for all wine in the off-trade (Nielsen,
mid-April 2008), the Boot has seen a 12% increase in volume
and now account s for one in every eight bottles of wine sold. It's an impressive show of strength in an uncertain marketplace.
Of course, those on the ball will be quick to point out that the ongoing love affair with Pinot Grigio, which now accounts for 31% of Italian wine drunk, is behind much of this growth. But the top 10 Italian brands,
such as Stowells, Canti, Canaletto and Piccini, have also grown at 21% over the year and these labels are helping to expose
consumers to more than just Pinot Grigio. Add into the mix a good 2007 vintage, especially for northern whites, and a real push among the influential multiples to draw consumers deeper into the diversity of Italian wine, and it all
mixes into a recipe for ongoing success. And it's a bandwagon that independent s
could jump on.
Underpinning this optimistic outlook has been a sustained and dramatic improvement in winemaking in Italy, delivering a new generation of
products - from entry-level co-operative wines to high-end classics - boasting clean, agreeably fruit-forward styles that
retain an essential and enticing Italian character.
"The improvement over even the past 10 years has been immeasurable," says Pierpaulo Petrassi MW, senior product development manager for Italy at Tesco. "Italy has become far better at listening to what the consumer wants and the result can be seen in the crisp whites, whether classic DOCs or the less well-known whites we are now seeing on the shelves, and the soft fruit-driven reds, especially those coming out of the south."
The key to making Italy work for any retailer and to develop
its full potential lies in communicating both
its highly individual diversity and
focusing on the immediate drinkable appeal of the wines. "There is a degree of consumer confusion over Italy," admits David Gleave, managing director of Italian specialist importer Liberty Wines. "But there is also a growing trend towards experimentation among customers as their wine knowledge matures, and in many ways Italy is producing wines that fit well with modern drinking trends away from heavy, alcoholic, over-oaked wines while delivering individual character."
Gleave suggests that Italy's phenomenal success with Pinot Grigio should, if exploited properly, help establish the country as a great source of whites that sit well with the modern consumer palate. It's a position with which many buyers agree. "Italy is doing very well for us at Wine Rack, up to 15% by value," says Jonathan Butt, head of range development for Wine Rack. "Obviously a lot of this is led by Pinot Grigio, but it also presents a fabulous platform to trade people through from Pinot Grigio to other more unusual wines, especially with the whites."
These more unusual whites are becoming better known as varietal-labelled wines such as Fiano, Grillo, Pecorino and Falanghina, which are
gaining more presence
shelves . Wine Rack, like its major multiple rivals, is committed to bringing more of these varieties to its customers. And, as
Petrassi points out, Italy also has a roll
call of ever-improving traditional whites, such as Frascati, Orvieto and Soave, that can also play their part in boosting Italy's reputation as a source of modern-day lighter whites. Also, for high quality aromatic wines, the cooler northern regions such as Friuli and Alto Adige have never been better.
On the red front, the real buzz currently lies in the south. Its
jaunty, affordable wines - such as Nero d'Avola from Sicily and Primitivo - are making headway through a combination of ripe dark fruit and spicy character, delivering a good bang for your buck.
stars at the affordable end, though, are
rising from more traditionally recognised regions and varieties. These include
soft Montepulciano (d'Abruzzo), Valpolicella's Ripasso wines that deliver a flavour of Amarone without the huge price tag, and varieties
such as Bardolino that were once biggish names here in the UK. At the top end, sales of fashionable Amarone are booming, Barolo has increased its presence three-fold on the UK shelves in the past few years and the quality of Chianti (especially Classico) has never been more appealing. Despite all the advancements in quality and accessibility in terms of more modern winemaking, though, Italian reds can still be a difficult sell .
"The key with Italian reds is to put them into context as they typically have higher acidity
and tannins, and lower obvious fruit than other reds, especially the popular styles from the New World," says Richard Cochrane, director of off-trade sales at Bibendum. "A part of this context is
food, which tends to bring out the best character in these wines, but it is also important to bring in elements of fashion, cars
and general Italian imagery with which the public has a huge sympathy."
These are powerful selling points, as Cochrane points out, but still require work on behalf of the retailer to convey this excitement to the consumer.
Another of the difficulties that Italy faces in terms of achieving its full potential lies in the lack of a co-ordinated generic body such as Wines from Spain or the Australian Wine Bureau, both of which have done a fantastic job in raising the profile of their respective countries' wines in both the trade and consumer arenas.
Indeed, the Definitive Italian Wine Tasting this month (see page 28) is in fact the creation of the importers themselves. Importers and retailers generally agree across the board that this lack of generic support is detrimental especially at a time when Italy should be pulling out the stops to capitalise on its current growth.
Despite this, Italy continues to grow its market share. Gleave points to a marked improvement in the co-operative system whereby a new ethos coupled with strict control over grape production is boosting the quality of entry-level wines. "With the price of the 75cl averaging out now at £4.20, and France now 10% over that, Italy with an average price at £3.83 is taking more of the under £5 ranges," confirms Nielsen's Stewart Blunt. "Italy's new-found popularity now makes it as big a seller as France at the cheaper end; in fact at the very cheapest end, Italy has grown to be the largest supplier, accounting for 20% of the under £3 market."
But beware the lower depths
However, with the spectre of ever-rising grape prices, especially for Pinot Grigio, and the pressure on price brought to bear by a weak
pound, Italy needs to
be wary of two issues: lingering at the lower end of the market and concentrating its efforts on one white variety that will, at some time, inevitably fall out of vogue.
But Blunt is
Italy's continued growth. "Prospects for 2008 should remain good for Italy, as its lower price will appear a welcome relief in a market of rising prices," he says.
Moreover, at this entry level where most consumers regularly engage with Italy, there has been a significant change in how the wines are sold. "Italy has historically had a high proportion of its sales in own-labels, but there is a general drift away from own-label and rise in branded," continues Blunt. "Actually volume sales of Italy own-label have run at only -1% per annum, so we can call that level, but the growth in brands from Italy has been quite exceptional and this is what gives Italy its current dynamism."
He could add that it is these same growing brands that are delivering a recognisable and safe entry point for an increasing number of consumers into the labyrinth of Italian wines. Couple this with the growing signs of support and diversification shown by the major retailers in their Italian offerings and there is a very real chance that some of the incredible diversity of this country will increasingly draw in consumers riding the Pinot Grigio wave. For the retailer, all the signs are right for delving deeper into Italy and tweaking the range.
Jon Jackson, manager, Theatre of Wine, Greenwich
"Italy can be a challenge if you are looking to find good value for money in the more famous regions, but it is easier to find if you are prepared to look to the more obscure and esoteric styles and varieties.
ask for Chianti, Valpolicella or Barolo we can also make a brilliant play of all the wines they haven't
heard of by getting across the message that they are both great value and fantastic wines. For example, wines from places like Alto Adige and the north east, southern wines from old grape varieties and the approachable styles from Sicily. Another good point is that you
can get a great range of Italian wines from one or two suppliers because companies specialise
Regional focus - Sicily
With so much to get excited about wine-wise in almost all of Italy's hugely individual regions, including dynamic progress in classic areas like Tuscany and Piedmont, it's difficult to choose one region to focus in on .
But Sicily stands out for several reasons. It is here, among the sun-warmed, rolling hills of the Mediterranean's largest island, that the evolution in Italy's modern approach to winemaking is perhaps most apparent. Think customer-friendly but individual and characterful wines.
Both old, aristocratic estates like Tasca d'Almerita and youthful arrivals such as Planeta, are doing a remarkable job. They are
taking a mix of indigenous and international varieties, Sicilian sun and soil,
generous, fruit-driven yet complex wines that offer New World approachability combined with an innate Italian style.
Other estates to look for include Abaazia Santa Anastasia, Cottanera, Donnafugata, Cusumano, Ceuso, Spadafora and wines from the cooperative at Settesoli. Wines from international varieties, including lush Chardonnay and spicy Shiraz, have shown that Sicily can equal or better the New World at its own game, while judicious use of grapes like Merlot and Cabernet Sauvignon, sometimes blended with indigenous varieties, have again shown
potential for superb wine.
Best, though, are wines from the leading indigenous grape varieties that have been reinvigorated in a modern style without losing Sicilian character. Pick of the reds are Nero d'Avola, which has a soft, spicy, black-fruit character, or Nerello Macalese which, on the volcanic slopes of Etna, produces energetic wines of incredible minerally intensity.
The buyers' views
Pierpaulo Petrassi MW, senior product development manager Italy, Tesco
"The improvement in overall quality in Italy has been impressive over the past 10 years, with well-made, cool-fermented, fruit-forward wines much more in evidence. Yes, Pinot Grigio is driving sales but there is plenty else coming up in the fast lane as Italy continues to re-invent itself, and the market should continue to mature. The quality of old classics like Orvieto, Frascati and Soave has improved immeasurably and these should begin to benefit if Pinot Grigio cools off, plus there are exciting freshly-made wines like Fiano, Grillo and Gavi that are being discovered as great alternatives.
"The same is true of the reds, where soft, fruit-driven styles that offer a halfway house between Italian character and New World approachability are striking a balance between softness and character, but with enough complexity to match popular foods like pasta. Reds from varieties like Montepulciano, Barbera and the fuller Nero d'Avola are ideal examples, while something like Ripasso bridges the divide between easy-going Valpolicella and Amarone. And Chianti Classico offers slightly more mature flavours that should appeal to those who like Rioja."
Italian buyer, Sainbury's
"Pinot Grigio has been a phenomenal success for Italy and the country should look to expand on its strong identity as the home of crisp, dry white wines with varieties like Pinot Bianco, Pecorino, Fiano and Falanghina. The sales split is roughly 60% white, 40% red, so there is also an opportunity to grow red sales.
"Primitivo could be a real driver here as it has consumer friendly New World-style fruit delivery, and also Sicilian reds like Nero d'Avola and Shiraz are great styles that simply need a hook for customers to trial them.
"Red wine styles from Italy still retain a fantastic flavour profile, often with red cherry fruit and great acidity, making the wines more food friendly.
"Italy also has a wide range of wines that are lower in alcohol and lighter in style and this fits with customers looking to moderate their intake. For example, we have a 10% Pinot Grigio and a 10% Rosso delle Venezie, and as Soave and Valpolicella can also both come in under 12% this could be a real opportunity to persuade consumers to pick these wines over Australian Chardonnay or Shiraz at 14%."
head of global sourcing, Wine Rack
"Italy presents a fabulous platform to trade people through from Pinot Grigio to other more unusual wines, especially with the whites.
"We are working on a new range of Italian whites for
September and will be doing in-store tastings to encourage people to try varieties like Fiano, Grillo, Pecorino and Falanghina. People might not think to try these wines, but once they taste them they love them.
"Italy has made great strides in improving its winemaking and is more in touch with the consumer in terms of delivering fresh, crisp whites and soft, balanced, appealing reds, especially with wines like Salice, Primitivo and Nero d'Avola from the south."
Italy in figures
Italy's UK off-trade sales by value
Year to April 19 2008: £524 million
Year to April 21 2007: £461 million
Year to April 22 2006: £429 million
Italy's UK off-trade sales by volume
Year to April 19 2008: 11.9 million litres
Year to April 21 2007: 10.7 million litres
Year to April 22 2006: 10.2 million litres
Average price per 75cl
Year to April 19 2008: £3.64
Year to April 21 2007: £3.58
Year to April 22 2006: £3.49
First-time exhibitors at this year's event include:
Awin Barratt Siegel Wine Agencies
Italian Wine Merchant
Guerrieri Rizzardi (UK agent HBJ Wines & Spirits)
Noceto Michelotti Winery (Piedmontese producer)
When: Tuesday 24 June, 10am-6pm
Where: Nursery End Pavilion, Lord's Cricket Ground, Wellington Road, London NW8 (North Gate Entrance)