Italian wines conquer China and Usa

The 2007 was a good year for Italian wine exports to the United States: 845 million litres sold, and an 8% increase on 2006. The growth, says http://www.vinitaly.com/, is set to continue in the following years: in 2010 the wine cases sold in the United States will be 337 million, and could reach 354 million in 2015. "The American market is treacherous - explains Aniello Musella, director of the Foreign Trade Institute in New York - and can never be considered acquired; it needs to be approached carefully, because if there are opportunities to gain, the biggest importer abandons the supplier". With the euro quoted at 1.60 on the dollar, importers are already reducing their profit margins, since the prices of Italian wines increased by 2.5%. "But the continuous increase in wine consumption in the U.S. - added Musella - makes us optimistic about the future". Among American consumers, in addition, the price increase has not yet being perceived, because for this segment the price is not a determining factor of choice. Today Italy is the leader in U.S. for export in volume, while in value is second after France. According to the Assoenologi director, Giuseppe Martelli, it is now necessary to focus on innovative products. "With market analysis and studies aimed exclusively at American public", he says. Another market destined to become crucial for Italian wine exports is China: from 2003 to 2007 Italian exports have risen from 400.000 to 20 million dollars. A real explosion, if you consider that the main sale channel is still that of hotels and catering. The analysis of the Asian market potential was given by the Assoenologi Congress, as reported by http://www.vinitaly.com/. "The great opportunity for Italian wine depends on the possibility of entering the Chinese restaurants - said Antonino La Spina, Ice executive in Beijing - because today the "Made in Italy" wine is a symbol of social change for a population with a middle income class of about 200 million people". Entering the circuit of Chinese restaurants is an opportunity because, according to Ice, in China the wine is consumed mainly outside home, expecially to celebrate (for the Chinese New Year there is a 30% peak of sales). The challenge for the Italian producers is to fit in a market where France has always been the leader, with 98 million dollars in sales in 2007, thanks to the strong presence of retail chains like Carrefour (250 hypermarkets) and Auchan. According to Ice the Chinese wine producers, represented by 4-5 groups of medium and large size, will aim at an increase in production. "The cultivated area - concluded La Spina - will rise from over 46.000 hectares of 2005, half of which Sauvignon, to 66.000 hectares in 2010".

(translated and adapted from http://www.b2b24.ilsole24ore.com/articoli/0,1254,24_ART_88474,00.html?lw=24;6)

Ok: the 2007 has been a good year for the Italian wine industry. But what about margins? Italian wines, in fact, still have a very low average price on the markets, and in the future the industry will have to work hard in the premium range. Not easy in China, where a lot of wine is still sold in bulk, neither in Usa, where the competition is getting harder and harder.