In 2008, one of the largest wine retail chains in Austin, Texas relegated its selection of Italian wines to an “Italy/Other” rack. The ad hoc category was a reflection of Italy’s station, so to speak, in the hierarchy of international wine at the time. With higher-profile space allocated to California and France, the chain’s sales team displayed its Italian offerings in one of the shop’s least prominent racks together with after-thought “esoteric” wines.
Since that time, so much has changed. Thanks to aggressive efforts by Italian winemakers and their U.S. importers and a wave of heightened interest, the category has become a major focus in wine retail in Texas and across the U.S.
In the A.C. (after COVID-19) world,* will the Italian wine industry be able to maintain its newly conferred status as a leading international category? Or will the challenges of doing business in the U.S. in the post-pandemic era erase more than a decade of robust growth?
The authors of a new “instant” book entitled Italian Wine Beyond COVID-19, Flavio Geretto (export director for leading Prosecco producer Villa Sandi) and Fabio Piccoli (founder and editor-in-chief of Wine Meridian), share their predictions for what the A.C. wine world will look like and how producers will need to adapt their marketing and sales strategies.
(Disclosure: Flavio is a good friend of mine and I am a media consultant for Villa Sandi; Wine Meridian featured me in a 2018 interview.)
The book, written in Italian, can be purchased here. Proceeds go to the Italian hospital system.
The following are my notes. While some of the authors’ observations align with commonly embraced tenets for good business practices (like the need for diversification in sales channels), others genuinely surprised, impressed, and inspired me. Flavio and Fabio don’t have all the answers but the questions they raise are spot on. If you read Italian, I highly recommend ordering a PDF. Special thanks to the authors for sharing a review copy with me.
– Sales channels diversification will become a primary factor in determining which wineries succeed and fail. For too long, the authors write, wineries have focused on an overly limited number of outlets for their wines. And in some cases, companies have even “snubbed” certain sectors, like supermarkets and online retail platforms. Today, those choices have left countless producers highly vulnerable.
– Sustainability and organic farming, they predict, will increasingly become a focus for winemakers as consumer demand more transparency and clarity in terms of how producers present their wines. Authenticity and health concerns will become primary drivers of how wines are marketed and sold and how end users perceive them. This trend had already emerged over the last decade, they note, but now it will be “accelerated.” The nature of the COVID-19 crisis will heighten the demand “organic, biodynamic, natural, and sustainable” wines, they believe. Wineries who embrace these categories — and more importantly — those who are prepared and have the resources to market their wines as such will enjoy a significant advantage over those who don’t.
– There is an increased need for the government to regulate payment terms, they note, so as to ensure prompt transfer of funds. Chronic delays in payment, a systemic problem throughout the Italian business world, make wineries more vulnerable, especially in times of crisis. The authors cite the case of a major northern Italian winery group that faces bankruptcy because of unpaid, overdue invoices that it is now unlikely to collect. Italian legislators, they argue, should intervene to ensure that credit terms are respected, including government-imposed penalties for late payments.
– Restrictions on movement, and especially intercontinental travel, will make it extremely challenging for winery ambassadors to visit foreign markets. As a result, wineries will increasingly have to rely on agents already present in the market. The authors foresee the rise of ad hoc brand ambassadors. (Similarly, travel restrictions will lead to a rise in domestic tourism in Italy. The Italian wine industry needs to be bolster its hospitality programs in order to take advantage of a surge in Italian tourists with better education and a more highly trained work force.)
– Because of the new challenges of market work, especially when budgets are stretched thin, wineries will have to be more selective and demanding when designating a wine ambassador. As the authors note, wineries often delegate market work to employees — like winemakers — who have no sales experience. Sales skills, not technical knowledge, and robust training of sales staff will be one of the keys to reviving the industry.
– Remote tastings with buyers using video technology are less than ideal, they note, because the variables affecting the wine (temperature, humidity, bottle variation, etc.) are too complex to mitigate. Even tastings conducted with proper social distancing won’t suffice because the two actors — buyer and winery ambassador — still won’t be able to taste from the same bottle. The industry will need to devise new ways for interacting with buyers. The authors don’t have the answers for this seemingly insurmountable challenge.
*The acronym is borrowed from Thomas Friedman’s March 17, 2020 op-ed for the New York Times, “Our New Historical Divide: B.C. and A.C. — the World Before Corona and the World After.”