Italian Renaissance

08 June, 2017

Prosecco has enjoyed a remarkable rise towards ubiquity in recent times, thanks to its uncomplicated taste and its status as an affordable luxury. “I’ll be there in a Prosecco,” laugh Brits to one another. “My superpower is making Prosecco disappear. It’s a classy and elegant drink. Two pints of Prosecco, please.”

You know you’ve made it when you’re the darling of a million memes, greetings cards and fridge magnets. That is despite the region doing next to nothing in the way of UK marketing, and not even having any real brands to speak of.

Yet sales of the north Italian sparkler have been on an upward trajectory for years. Prosecco grew 24.7% in volume and 22.6% in value to £450 million in the past year (IRI, year to March 2017). Analysts at IWSR believe it will grow 17.3% in volume by 2020 and shore up ailing still wine sales, while the region itself predicts UK exports will soon overtake domestic sales.

Hence the mass panic that greeted stories in 2015 of a “Prosecco shortage” that was tipped to drive prices up and rob people of their everyday luxury. They were staring down the barrel of an end to bottomless brunches and tipsy Tuesdays, and they did not like it one bit. Matters were exacerbated by news this spring of frost ravaging the region – which extends over nine provinces from Veneto to Friuli-Venezia Giulia – and producers reportedly losing up to 40% of their fruit.

But suppliers are keen to downplay any fears. “There were some problems last year and in 2015 regarding supply of larger volumes for major retailers but now the situation appears to have eased quite significantly with no shortage and even an oversupply, with prices softening at the lower end of the market,” says Nick Tatham MW, wine development manager at Continental Wine & Food.

“It would appear that demand has slackened, at least in the UK, and that new plantings are now producing. It is possible that Prosecco prices will fall further over the next six months, unless the 2017 harvest is reduced by poor weather.”

Tatham says UK buyers need look no further than northern Italy for all their sparkling needs. “It is very well placed to supply the UK with both sweet and drier styles of sparkling wine, including the Moscato wines of Piemonte, Franciacorta, Trentodoc,

Durello, Pignoletto and many branded Vino Spumantes of all descriptions. The problem isn’t the supply but the marketing and UK acceptance of alternative wines.”

That is a challenge posed to the Franciacorta region, which makes high quality bubbly in the traditional method in Lombardy. Some of the 100% Chardonnay wines it produces are exceptional, and they are enjoyed by catwalk models instead of Champagne in nearby Milan.

Convincing their British counterparts to follow suit is another matter, but Prosecco has paved the way and will make it easier to sell alternative Italian sparklers, says Silvano Brescianini, vice president of the Franciacorta Consorzio. “We’re not in competition with Prosecco. Its success in the UK and around the world has paved the way for us and has done a lot to create an interest in sparkling wines outside of Champagne.”

INTERESTING OPTIONS

Stefano Girelli, managing director of The Wine People, adds: “Prosecco has opened the door for other sparkling Italian wines, creating opportunities not only for the likes of Franciacorta, but for areas not normally associated with sparkling wine production. For example, at Santa Tresa in Sicily, we have created a sparkling Grillo, which is an interesting, different option for buyers and their customers.”

Sparkling wine in general is the great success story in the trade, and Italy is very much in the driving seat. Still wine sales, however, are going in the opposite direction, with the Old World bearing the brunt, and Italy is no different: sales are down 6.1% to £630 million (IRI, year to March 2017). As Pinot Grigio dwindles in popularity somewhat, the challenge is replicating the success of Prosecco with other still wines.

“In Italy the decline is largely down to the end of the Pinot Grigio boom and the success of Prosecco in its place,” says Tatham. “Italy is already making a range of white wines which could have wide appeal to former Pinot Grigio drinkers, including old stalwarts such as Soave as well as Lugana, Friulano, Gavi, Pecorino, Vermentino, Vernaccia and a whole host of other fresh, modern, lightly spicy wines.

On the reds the lighter, fresher styles of Valpolicella and Bardolino are well-positioned to take advantage of a move towards lower abv wines as well as the Veneto Merlots from the 2015 and 2016 vintages which have great fruit character.

“Italy is making the right wines – it is now a question of the pound against the euro and the other currencies which will determine whether buyers are likely to stay within Europe or be tempted again by the South African, Chilean or Australian offering. A lot of the retail decision- making will be based on their ability to make good margins at key RSPs.”

Zonin 1821, which has a 40-strong sales team in Britain, grew UK sales by £5 million in 2016 to reach £42 million. “Prosecco is not really growing so much any more in the off-trade,” says president Domenico Zonin. “It is in the on-trade, but in the off-trade it might have peaked. But we are growing still with estate wines from Puglia, Tuscany and Sicily. They are suitable for the UK palate because they have a modern taste, soft tannins, sweet without sugar, elegant and not so heavy.”

Though sales are still climbing, Zonin has a point. In 2015 Prosecco grew 72% in the off- trade, and that fell to 22% in the past year. Thus it is encouraging that growth is coming from other regions of Italy for this leading producer.

Sicily is one region growing in popularity, and Zonin recently bought Feudi Principi di Butera on the island in a bid to produce the best Nero d’Avola in the world. “When we invested in Sicily, the idea was to produce New World-style wines in an Old World country,” says Zonin. “That’s a style of wine that’s very good for the international market. We have a lot more tradition and history for food, wine and culture than competitor countries such as South America, China and Australia. We have to develop a synergy between the food, wine and culture in our market and become more competitive.”

Italian cuisine is booming again in the London on-trade and the British love affair with Armani, Ferrari, the Amalfi coast and la dolce vita shows no signs of abating.

Zonin’s plan is to show the world that Italy is about more than sharp suits and fast cars, and that it deserves a global reputation for quality wine at all price points. Sicily also wants to show it offers more than sun-drenched vistas, warring Mafiosi and fabulous cuisine, and it is ramping up its focus on the UK as it tries to boost wine exports.

We caught up with Antonio Rallo, president of DOC Sicilia, in Catania for Sicilia en primeur, and he was bullish about its chances of international success. “Italy has the highest production in

the world, more than 15 million hl, and we have the biggest vineyard in Italy,” he says. “Sicily must play a role in the international market and we need to come together. To be successful in a very competitive arena you must be able to join forces and this single voice is the DOC Sicilia. Our objective is to promote the name Sicily and its wine. We would like the production of different areas in Sicily to develop. We have a high number of vineyards, but also many identities, expressing the varieties of different areas. From Etna to western Sicily there is great diversity.”

EXPORT GROWTH

Sicily has a larger area under vine than Australia, according to Rallo, but yields are much lower, so the quality is there to appeal to UK buyers. “Italy has grown exports over the past few years thanks to a number of wineries overcoming an incredible challenge,” he says. “In Italy we lost 12 million hl in terms of [domestic] consumption. We insisted on quality and, thanks to Italian entrepreneurs, these were exported across the world. We kept second place in terms of export value after France, and second in terms of volume after Spain. Thanks to Prosecco we have reached many new consumers across the world. I am a producer of still wine, but I am happy about this phenomenon.

“We invested €4 billion in marketing and now we see some results. From 2013 to 2016 DOC exports grew by more than 40% and IGP had a 4% increase. We were able to market more wine with our name on it around the world. There is still much to do but we have achieved a lot.”

The island’s flagship grapes, Nero d’Avola and Grillo, are now protected under DOC status, and producers feel this will ensure Sicily gains a strong reputation for quality on the international market. “We want to safeguard consumers and give them a wine that’s certainly Sicilian and produced in our land, produced using clearly defined rules on lower yields and protecting good Sicilian producers.”

Zonin adds: “Now the two main varieties of Sicily will be of better quality. It’s good for the overall quality of the region. Producers are supplanting French varieties and replacing them with Nero d’Avola and Grillo and the average quality is increasing.”

World-renowned producer Gaia is even getting involved as it has invested in an estate near Mount Etna, which fills Rallo and his colleagues with pride and buoyancy for the future.

Girelli at TWP embodies this optimism. “We have a very strong focus on organic wines and we offer a variety of organic wines, mainly from Sicily,” he says. “They perfectly represent their terroir and at the same time respect nature and our land. Today these are important values for customers and are becoming more relevant when making the decision to buy a product.

“We are also having a lot of success with wines from the south of Italy. In terms of styles going forward, I predict success with lighter, fruit- driven reds such as Frappato and, at the other end of the spectrum, appasimento styles.”

Tatham adds: “We have had a very strong start to 2017, with great success in wines from the Veneto region and from the Marches in particular, where we have expanded our range in the past three years. We see the natural wine category as having great potential and hope that Italy in particular can offer more wines which fit into this bracket.”

Italian producers that DRN has recently interviewed do not seem overly worried about Brexit and are keen to maintain strong trading relations with the UK, particularly at the top end of the market. Leading Brunello producers such as Tenute Silvio Nardi, super-Tuscan producer Ornellaia and Campania producer Feudi di San Gregorio are all increasing their focus on the UK and achieving strong results.

Prosecco is paving the way at one end, and these premium producers are doing a great job at the other end of the market, so there is every chance the middle ground will receive a boost and overall wine sales will return to growth.




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