Sunday, June 15, 2014

How to bring your Italian wine to the American market

No matter which party is dominant in Washington, no matter if the Dow is 26,000 or 1,600, no matter if we are in an unpopular war somewhere in the world, no matter if it all seems like the earth is a big fat match getting ready to be struck on the side of the matchbox, no matter – people want to sell their Italian wine to America. The dream of America is still alive in Italy. Let’s take a look at some of the routes to market.

Andrea Fassone started up in Oct 2008 - oops - his business has blossomed
The traditional import route - Ever since the end of prohibition, there have been companies, usually centered on the New York metro area, which have brought wines in. Maybe they originally attempted to sell on the east coast, and as they got a little traction, they expanded west. One groundbreaking company for Italian wines was Winebow. Originally dedicated to Italian wines, this firm sought high value producers, from Giacosa to Allegrini in the north to the lesser known wineries in the south which represented great values. Wineries like Cosimo Taurino, Librandi and Tasca d’Almerita. Winebow posited the one-stop shopping solution for Italian wines and many wine lists in the 1990’s were dominated by wines like Anselmi, Maculan, Altesino, Argiolas and Tiefenbrunner, as well as the aforementioned wineries.

In that time, other importers sprung up, feeding a thirst for even more Italian wines. Importers like Vias, Neil Empson and VinDivino.

Concurrently, larger companies like Kobrand, Palm Bay, Paterno (now Terlato) Banfi and Frederick Wildman offered Italian wines in their portfolio. Paterno and Banfi originally started out all-Italian but ventured to other wine producing countries. Kobrand, Palm Bay and Frederick Wildman have prestige brands from Italy to complement wines from other countries as well.

A second-generation phase of importation was initiated by Brian Larky with Dalla Terra Winery Direct®. Dalla Terra takes a leaner role in the profit percentage they work on (15% vs the more traditional companies, which work on 25-50% gross profit). The thinking is they can offer better value to the American market and move more wine, thus creating more gross dollars. It offers a good 2nd road for those lucky enough to be in the Dalla Terra portfolio.

“In House” Importers - Sometimes wholesale distributors do their own importation. If a distributor is large enough one can get pretty good coverage. Bill Ippolito has an import division he looks after at Charmer Sunbelt in NY. Bill came from Kobrand and Winebow and has a good feel for what works in the markets he is involved in. His is a hybrid importer, imbedded in a large distributor. Not that the sales they generate are “gimmies.” Bill and his team have to work hard to get their wines in the stores and on the lists. But it’s a good cross-model that has promise.

All of these are relatively traditional routes to market.

Going "direct" – in the last 20 years there has been a trend for some wineries to sell directly to the wholesale distributor in a variety of regions. This has been met with some success, but it is labor intensive. This plan allows the winery to charge a little more and use some of the profit to travel the market, pinpointing which clients are best for their product. Wineries like Felsina do this. Some try and find pretty fast it is not their cup of tea. Walter Fissore of Elvio Cogno recently left Vias and went direct. I hear now he has decided to go back to a more traditional importer, Wilson-Daniels. Scavino just left Banville & Jones to go direct. It is a more labor intensive effort to go direct. You must like to travel, all the time.

Direct to Consumer - There are models being developed that offer more of a DTC (direct to consumer) style as has been developed in the US by special ops companies like Free the Grapes, Wine Intelligence and Ship Compliant. Paul Mabray at VinTank is pushing the envelope with imported wines lately. So there are rumblings in that area and this is a tank full of fish, some sharks, some dolphins. A place to watch in the next five years as global efficiencies become leaner and more streamlined.

That said… the questions you, as a winery somewhere in Italy looking to sell your wine, should be asking are…

How much wine do I have/ want to sell in the foreign markets? Is my domestic market (Italy) working well? Is it important to me to sell my Italian wine in Italy?

How important is America to me? All of America? Or just New York, San Francisco, Los Angeles, Miami, Chicago, Houston and Colorado (for example)? America has 51 different regional governments and there are many different issues with laws, compliance and taxation. It can be very complicated. Just ask Giulio Galli who recently went in partnership with Terra Moretti (Bellavista, Contadi Castaldi, La Badiola and Petra wineries) and found out just how different Pennsylvania is from Texas, Oklahoma is from Georgia, California is from New Jersey. So, you need to ask yourself, where in America do I want to sell my wine to? If it is everywhere, you might want to look at a more traditional company. If it is just a few places, you might be able to do it yourself.

I can see how enticing the lure of America can be to an Italian in these times of economic uncertainty. I have heard the horror stories about not getting paid on time (or at all) from clients in Italy (restaurants, wine shops, etc.). One winery I know early on decided not to sell any of his wine in Italy, preferring to concentrate on America, Russia, Germany, South Korea and China. He is always, I repeat, always, on the road. But he loves it.

I have had many a meeting with a starry eyed producer who looks at me (I work in the trade) as someone that can be the answer to all their problems. The problem is, many people have already reached me and people like me. Our stock lists are full. We need to sell what we have.

When I read on blogs that it is a shame such and such a wine is not available in Texas or Pennsylvania, Georgia or Oregon, I pause. What about those that are already here? Do we not have a responsibility to do right by them? They made the trip, got their route to market. Now we have to get it from the market into the hand of the wine lover. Not that there isn’t room for one more. But the route must be different. There need to be some thought, some creativity, along with the quixotic passion. Making good (or even great) wine is not enough. Getting 90+ points from Galloni, Larner, O’Keefe, Sanderson and Suckling is not good enough. That’s the reality on the ground.

My point in all of this isn’t to provide a comprehensive answer to everyone’s queries or to offer a one-size-fits-all solution. It’s more of an attempt to offer a sober look at the state of wine importation from Italy to America in 2014. We’ve come a long way from the 1980’s when the Italian wine revolution started. The market is more mature, but the selections are vastly more. There needs to be a need for your wine. And chances are you are probably going to have to create that need. Making the wine is not enough. Not in these times.

written and photographed by Alfonso Cevola limited rights reserved On the Wine Trail in Italy
wine blog +  Italian wine blog + Italy W
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