Todo sobre el vino: wine marketing, key for emerging wine markets

What can we learn from Italian wine marketing?


Por Dr. Alejandra Aguilar | Todos Santos


viñedos-mexico1Wine production and consumption is rising worldwide, and emerging wine markets must engage in clever & creative wine marketing strategies to grow. Prosecco is a rising star in the international wine scene, and is perhaps the best recent lesson that we can learn from, as we learn from Dr. Delphine Veissiere, an expert marketing strategist for the Italian wine industry.


The most profitable emerging wine markets

One regular problem in the wine trade is that of satisfying the consumer’s constant demand for novelty which are mainly about sourcing, packaging or grape variety. China has certainly a huge potential as winemaking backed by government and the rapid rise of the “Westernised” middle class in the cities is significative but the United States remains the main wine market. Moreover, the 70’s has been characterized by the creation of a huge number of large and small US wineries that came from an initial 240 Californian wineries to over 1,700 wineries today.

Innovation in technology associated with the introduction of European winemaking methods and foreign investment such as the Champagne houses has boosted the US wine production and consumption. Does it mean that the most profitable wine markets are located in the countries producing wines? Actually, there is little evidence about if we take into account some countries like Russia and India.

Actually the emerging wine markets are often old European colonies and many wine producing countries located in South America, like Uruguay, Mexico and Brazil, which are actually the best place to create and to develop new wine businesses, in contrast of international luxury “paradises” (such as Dubai, Abbu Dhabi) where tradition and wine culture don’t exist and the consumption of wine regards mainly the international tourism. By the way, saying that the South-American wine countries could be the most profitable areas is already questionable because of the positioning and pricing of may wines such as the Chilean wines for example. Comparatively, Baja California in Mexico – which is located at the border from San Diego – could be a good example of a profitable emerging wine market as people are reinventing themselves via boutiques wines, top flight restaurants and attractive lodge options that are willing to bring value and profit margins.


Do you see Prosecco as star/boom in the USA and UK markets as everybody is saying?

Over the last 5 years, Prosecco has become a newly-added product category to the universe of the world’s sparkling wines. Enormous growth year after year, especially after the re-definition of the DOC area in 2009, has prompted producers to pursue higher profit margins, on a higher value-added base thanks to the upgrading of IGT to the DOC area. With the new regulation, Veneto and Friuli Venezia Giulia producers have two strategic opportunities: (1) to satisfy the new habits of consumers who no longer want to spend money on Champagne and other sparkling wines, (2) to counter the black market of fake Prosecco. But, unfortunately, climate changes and price fluctuations aren’t making it easy.

What once was a touristic curiosity called a “Bellini” served in the bars of Venice–a mixture of Prosecco and peach puree or simply straight Prosecco–grew in popularity and lost its mere novelty status. More than a curiosity, Prosecco has consolidated its market share in both off-trade and on-trade segments. As a result, importers and especially wine buyers operating in the off-trade field have begun looking for a steady supply of the sweet, fizzy, and easy-drinking wine with a more acceptable price for their thirsty clients back home. Producers have thus seen an opportunity to make further gains and rapidly enhance the production through two types of existing categories of Prosecco: “frizzante” (not to confuse with the fizzy table wine “secco”) and “spumante”, the higher-end quality Prosecco addressed to the on-trade segment.

Exports of Prosecco reached a record in 2012 – growth is about +174,6% for the last 10 years in the UE and +134,1% extra-UE – with significant increases in the American and UK markets. In the US, sales went up 37,9% in value, bringing market share from 6,1% to 8%. In the UK, Prosecco sales grew more than champagne sales. In December 2012, Tesco said that sales of Italian sparkling wine had doubled from the previous year. If the credit crunch has taken the fizz out of the UK’s champagne market, Italy’s best-kept secret, Prosecco has emerged as the clear UK winner over the holiday season. In October 2012, the ISTAT data report concerning worldwide exports of Spumante DOP (including mainly Prosecco and Asti spumante plus the residual Franciacorta and Trentodoc) highlighted a general growth of 30% and specifically +22% in the US, +70% in the UK and only +7% in Germany. Prosecco DOCG represents 42% of total exports in volume, totaling 26 million bottles. While America accounted for 13,5% of total exports of Prosecco DOCG in 2012, Europe 83%, Australia and Canada absorbed 10,9%, Asia and Africa, 2,1%.

It is interesting to know that he high value-added Prosecco DOCG (frizzante or spumante) represents 33% of the total Prosecco export, with a medium price of 3,99€ in the UK, 4,74€ in the US. But it is clear that the final customer of champagne – that usually reach a medium price of 23€ by bottle – should hardly become a Prosecco wine lover. Generally speaking, pricing, branding, positionning and product quality of champagne don’t match with the market characteristics of Prosecco. It means that the growth in sales should reach a point of stabilization at the moment in which Prosecco is no more a novelty. In the US and UK market I think that Prosecco is actually the best alternative to Cava but it has no common point with Champagne apart its sparkling character.


Don’t you think Durello could be comparable to Prosecco in the sense that Durello could be also a highly commerciable wine?

I don’t think so. The production volume of Durello is far smaller than the Glera grapes basis of the Prosecco production. Moreover, Durello is an indigenous and unknown grape variety outside of Italy. It is not a brand and it will hardly compete with the world known Spanish Cava yet serving a good value for money respectively to Champagne.


Do you think Wine Italian Market needs new marketing strategies for some of their wines or they are doing well?

Generally speaking, the marketing strategies followed by the Italian wineries are highly intuitive and they can reveal some significant great success such as the one of Tenuta di San Guido with Sassicaia and other emerging wineries producing indigenous grapes around Italy. But it is important to notice that the implementation of the IT technologies is heavily changing the generic wine business value chain in Italy as in other wine countries- especially the distribution, marketing and sales and the service “routines” – creating a real gap between the traditionalist and the proactive wineries.

The IT technologies are allowing the proactives to acquire a new vision of their final customer and to strenghthen their relationship. In the same way that in other industries a new marketing area is emerging with the innovative concept of customer experience. But it seems that the large and small Italian wineries are so far from this new model apart the ones that have created and invested in foreign estates such as the Banfi family for example.

On the other hand, some of them are mainly investing in packaging or taking advantage of a prestigious appellation (such as Barolo DOCG for example) to sell wines of medium quality that play a “second role” and create in some case bad experiences for the final customer and bad returns for each single producer. The competitive advantage of Italy around the world is huge and it is called creativity. I personnally hope in my daily work that many Italian producers learn more about how to tell it and to keep great attention about creativity and quality in the bottle so as to keep loyal their final customers.



About Dr. Delphine Veissiere

Delphine lives between Milan and Paris. She has a PhD in economics from the University of Paris Dauphine and holds a qualification of Wine Educator from the Wine & Spirit Education trust in London. She has an international profile oriented towards the wine world. Passionate about wine for more than 15 years, she has developed a deep know how as marketing strategist and coaching, helping Italian public bodies and Italian private companies operating in the wine industry to develop their international business. She is a lecturer at the MIB School Management of Trieste where she is in charge of the Wine business strategy module in the EMBA program.