Sunday, November 26, 2017

Selling Your Italian Wine to the US Market - My 15 Minute Talk

I’m going to take off my citizen blogger hat and don my work cap for this post. Read this as if it were a (TED) talk I would be giving to a group of Italian winemakers, hopeful exporters and importers, and young people looking to get into the Italian wine business in the United States.

Good morning,

As I look around the room, I see all manner of folks who are either devoting their life to Italian wine or who aspire to do so as a career. As one who had spent the last forty years doing just that, let me share some thoughts with you regarding the future and how you place your piece of the puzzle into it.

I currently work, in my day job, with a large wholesale distributor of wines, spirits and malts. This is a $17 billion-dollar company with over 22,000 employees. There are many moving parts. My role in it is to manage and direct the growth of the fine Italian wine business in one of the largest states (Texas) that this company is in. We are in the mid-section of the United States and this is a region that is growing rapidly, especially in regards to wine drinkers. And Italian wine is experiencing explosive growth.

About ten years ago, the total volume of all Italian wine exported (ex-cellar) to the United States was US $1 billion. It is now US $2 billion. That is an amazing thing, considering that in that time we had a global economic meltdown, the likes of which we hadn’t seen since the great depression of the early 1930’s. Italian wine is big business for Italy. And like all big businesses there are many facets to it. But on a base level, there is a large amount of business being done in America with the Italian wine community. And it’s been this way for some time.

There are also large companies, like Bacardi, Banfi, Constellation, Dalla Terra, Deutsch, Enovation, Frederick Wildman, Gallo, Palm Bay, Prestige, San Antonio Winery, St. Michelle Estates, Terlato, Treasury, Vineyard Brands, Winebow and Zonin, to name a few. Some might be familiar, some might not be. But they are increasing their business in line with the overall growth of Italian wine, as it has gone from $1 to $2 billion. And as well, there are a mighty number of smaller and start-up companies that are bringing Italian wine into the US, along with wineries who are direct importing into the US. Include in that mix, large national retail companies like Total Wine, Cost Co, Lidl, Kroger and Whole Foods, plus large regional companies, for instance in Texas, like Spec’s and H.E.B., who are also participating in direct importation of Italian wine.

Italian wines are commercially successful products in the US. They are wholesome, safe and dependable. And there are categories that are experiencing unprecedented growth, like Prosecco, Brunello, Barolo and many others. This is just to say both in large scale (Prosecco) and small (Barolo/Brunello) there is great interest in all kinds (and scales) of Italian wine.

There also is a growing category of highly collectable wine from Italy, led (but not limited) by Brunello, Barolo and Barbaresco. Recent sales of wineries in Tuscany and Piedmont are beginning to mirror winery sales in places like Bordeaux, Burgundy and Napa Valley. And prices of wines from those regions are escalating. Where once we could regularly drink 1st growth Bordeaux and Grand Cru Burgundy, now those wines are reserved for the uber-wealthy. And Italy is experiencing some of that inflationary activity as well. But in the meantime, there still is plenty of exciting, delicious and desirable wine coming out of Italy that is affordable to many.

Italian wines strength is in its “normalcy.” Wine that is accessible and drinkable and enjoyable for people through many of the economic and social strata of America. And “Italian-ness” is very much in vogue and desirable. I wouldn’t say trendy, because it has been going on longer than the life span of a trend. So, there is some “there” there. And deliciousness is a big part of it, whether is it red or white, still or sparkling, dry or sweet (and now, rosé).

So where do you go from here? How do you start? If you are a winemaker? And exporter from Italy? and hopeful Importer of Italian wines in the US?

Yes, there is a longer answer to all of that than in this little talk. But there are some short hints I can offer.

If you are a winemaker, remember you are entering a competitive world in the US, where wines from all over the world come. Just like people did and still are coming to America. You have to distinguish yourself among the many crying voices in the crowd. And yes, now we have social media, as well as the traditional avenues. And yes, there has been an explosion from the Wine Spectator/Wine Advocate days which now includes influential voices like Antonio Galloni, James Suckling, as well as other influencers like Ian D’Agata, Eric Asimov, Kerin O’Keefe, Monica Larner, Walter Speller and so on. And there are the bloggers, those who are still standing and who are still weaving stories about wines and wineries. Add to that the Instagram/Delectable/Vivino phenomenon, along with the online reads like Punch and Palate Press. And further add to that things like Wine Searcher and the Guild of Sommeliers (and the overall swell of  "Sommelier culture" in America) and progressive upstarts like Seven-Fifty, along with all the articles that run past the daily scrawl of the Wine Terroirist. Of course, we can’t forget the old Silverbacks, Twitter and Facebook. You have a minestrone of media that can help you move your message forward. But the wine must be good and have a value - and – it must have its own story.

And even then, you have to get your story out and people have to be touched by it and it must resonate with someone (or many someones). This is just to say, once you finish with the work of making the wine, the second job kicks in – and that is getting the wine into people’s hands.

As well, if you are in Italy looking to export your wine(s) to America or you are already in the US looking to import from Italy, there are all kinds of hurdles you must clear. It is not good enough that you went to Italy (or you have an uncle who makes wine there) and you want to bring the wine in. This is not to say, “No, don’t do this – you will fail!” But if you do proceed solely with a romantic notion of the wine business, you must be prepared to be crushed by the competition.

The Competition. Wow – what a loaded word. But it is crucial that you understand just what you are up against. And that’s not even considering the regulatory and administrative obstacles that will be placed in your path.

We see so much “glory” on sites like Facebook, Twitter, Instagram, Delectable and the like. But that is not the real world. The real world is driving from Austin to San Antonio to pick up a case of wine to transfer from one warehouse to another, on a Friday when everyone else is taking three hour lunches, and getting the wine to an account that is pouring it and has threatened to pull it (and kick you out of the account) if you don’t get them the wine. Or worse, going to a retail store and paying for the wine (retail) and giving the account the wine (how can you invoice something that has already been transacted?) just to keep the peace. Yes, that happens. And you must be mentally prepared for it, and then some.

America doesn’t need any more Morellino. Or Chianti. Or Prosecco. Or Moscato. Or any more anything. But if you believe in your wine and are willing to roll the rock up the hill knowing that four times out of ten it will roll back over you, then you might have a chance. And this might be the work for you. But if you just want to take a two-hour lunch two or three times a week, or stop work early several times a week to go to happy hour and live the “café society” life – then this isn’t for you. This is hard work, often with low margins, and with many, many, many disappointments. And even when you win it is just temporary. The only thing that you will keep experiencing will be more and more of the same. I’m not saying this to discourage you. It hasn’t discouraged me. But it has surely sobered me much more than any trip to Betty Ford could even do. This is a tough, tough business and there are many sharks and unscrupulous (and dishonest and disrespectful) people in it.

And along with that, there are many, many, many wonderful, lovely people, who are the light of my world, who are in the Italian wine business. Too many to mention. Some no longer with us. Some just starting out. Brothers-and-sisters-in-arms.

Here’s the quick-pick five point list for those who just cannot read 2,000 word essays on the matter.

1) Start with the real estate. Winemaker or wine marketer, choose the right wine for your area. Italy has done the heavy lifting these past several hundreds of years. Don’t try and re-invent everything. We don’t need any more Pinot Noir. Or Chardonnay. Or Cabernet. Or Merlot. Sorry, the field is packed. But…. if you ignore these words and do it anyway, make sure the wine is one thing: Great. Otherwise, resuscitate those indigenous vines and see what made your great- grandparents so excited when they grew them.

2) Importer? Or go it alone? Direct to consumer? Well, if you were in California or Texas or New York and making wine there, I’d say, at this time, you’d have a better chance for DTC. At the very least you are going to have to have a brother or a sister or a son or a daughter or a partner in America, to keep the campfire burning through the night.

3) Travel – you had better learn to love the road, says one who has spent the greater part of the last 20+ years on the road. It doesn’t have to be forever, but America is a big place, “from the Redwood Forest, to the gulf stream waters.” Be prepared to wage your campaign as if you were a politician running for office. Many long days, lots of rubber chicken (or fettuccine Alfredo), driving, driving, forgotten appointments (by the buyers) and follow-up, follow-up, follow-up. Relentless. Hard work. Little or no time for love or family or kite surfing in the Maldives.

4) Understand your competitive set. If you are pushing a Chianti Classico and the leaders are all selling for $20 and you come in at $30, you are at a disadvantage. For one, the perception is that the value is set at $20. And no story, no Instagram feed, no James Suckling 92-point review will get you over that hump. And when push comes to shove, the big wineries will discount heavily to make their number and make room for the next vintage. Which leaves you with very little wiggle room. Get it right in the beginning. It’s extremely hard to run a marathon with ankle braces.

5) Relationships. Remember up a ways I said “little or no time for love or family?” What you will need time for will be for the long-term relationships that you must develop to build your brand. In places like Cleveland, Houston, Birmingham and Worcester. Forget New York, L.A., San Francisco, Chicago. Those are a whole ‘nother battle, for the Lyn Miranda’s among you – the super stars. Tackle the places where America has been forgotten. There’s gold in them thar hills. But in any case, be prepared to spend the rest of your life developing deep relationships. Introverts be warned: this is really, really hard work.

Ok, so I’m going over 2,000 words. And you’re sitting there, squirming in your seats, waiting for the next speaker, the next panel. So, let me conclude.

In conclusion, welcome to a wonderful world. The people, many of them, are great. The wines, most of them, are worthy of the family tables across America in times like Thanksgiving, Christmas, New Year’s and Easter. They fit. Now, you have to find out where you fit in our little puzzle and place yourself in it and complete the picture.

Good Luck – A salute - and  keep your fire burning brightly!

More reading here (from the archives):

January 23, 2011
How to sell your wine to America

September 19, 2013
The Future of Italian Wine in America

June 15, 2014
How to bring your Italian wine to the American market

June 19, 2014
Do Americans love and drink Italian wines more than Italians?

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