From the start of the Coronavirus pandemic in Italy and in the United States, many people have wondered what would happen to Italian wines in the US market, a reality that represents a huge share for our wine and food products. The doubts are still many.
Has the worst already happened or is it yet to come? What is the latest situation? And how is Italy facing it?
These are some of the questions on our minds at this point.
The truth is that we know what happened but still don’t know what will happen in the following months, a future that is difficult to predict.
“Fortunately, during the pandemic and in the following months the wine consumption in Italy was good but the way of consumption was different especially for restaurants, a category that has been hit very hard. For them the recovery seems to be harder and slower than other businesses,” said the president of the Consortium of Barolo and Barbaresco, Matteo Ascheri.
Tara Empson, CEO of Empson&Co., stated that, “This year has been difficult, the country was in a turmoil and we had much to learn and to adapt differently from the past. Some restaurants still can’t reopen, maybe they could in September. It’s difficult to predict but the recovery seems slow.” So the future still concerns us.
For sure, this moment was characterized by a strong forward momentum. In fact, new online outlets were born and therefore, new strategies of trade and marketing that otherwise might have been delayed in emerging.
But is the importation of wine still blocked in America? And how has that changed the market in the US?
Nunzio Castaldo, president of Panebianco Wines Import, said, “We are facing an important challenge as importers and retailers. Without assistance it would be difficult to promote our little excellences of Italian enology. There is a necessity of compactness with Consortiums in Italy as well, a resource that is fundamental for us. We’re still working with antiquated laws in America that at least, thanks to this situation, have been changing. That’s why I’m optimistic.”
Fabrizio Bindocci of the Consortium of Brunello di Montalcino adds that, “2020 was a year that started with great optimism; in Tuscany we were about to receive new orders from the US and what happened next was a tragedy. Unexpectedly, the question of tariffs has been fortunate for our business because many businesses in America have increased their orders from Italy, concerned by the possibility of an increase of tariffs on Italian wine and food products by the end of the year. Now, more than ever, we must act as a team.”
In New York City many businesses are still closed, in Los Angeles many are closing again. So there is uncertainty and fear, but thanks to the E-commerce’s platforms, the American market is still our first foreign market, and fortunately the west and the east coasts of America are reacting well to these difficulties.
Gino Colangelo, president of Colangelo&Partners stated that, “Our two main coasts aren’t reacting very differently. I believe that the important thing for Italians is to keep promoting their wines and educating their customers now as in the past, because Americans are still buying Italian products but they’re buying what they already know. In this period there is no possibility of experiencing new wines.”
That’s why, at least for now, if they are to survive and not to lose an important part of their sales, the smaller brands need to enter the American market connected to bigger ones.
This is the time to stay strong and keep moving forward, and to know how to take the greatest advantage of the funds offered by the OCM to Italian wineries to support Italian wine businesses. But change is necessary in the bureaucratic process: “Red tape must to be reduced to allow businesses to access the funds more quickly and easily,” suggested the business strategist Silvana Ballotta.
Among some of the new wines under the Italian brand that have appeared in the American market and that have faced these circumstances, there are some from Etna that are establishing themselves well in the US and gaining great appreciation in general for the wines of southern Italy.
Antonio Benanti, president of the Consortium of Etna wines, said that for the time being sales in Sicily remain strong and wineries are meeting the demand. This is a great outcome for this new region that has entered the market, but now more than ever needs to invest in the promotion of wines from Sicily.
Sales online are changing as well, and by now this is an obligatory market outlet.
In the previous months numerous businesses have failed because of their online marketing, many of them caught unprepared, as a new public was born. Millennials are now buying and educating themselves about wines online instead of in brick and mortar wine retailers. Thanks to them, the stiff competition existing in the wine markets has been highlighted.
Although wines from California, Australia, New Zealand and Chile are establishing themselves in the US market, Italy, with its centuries-old tradition of wine making continues to reign supreme, challenged only by French wines.
Italy is fascinating and maybe this becomes even clearer when we travel outside of its boundaries, where it is considered a special land unique in the whole world. A land of good food, fine wines and timeless beauty with breathtaking landscapes. That’s the power of Italy; it strikes directly at the heart of every tourist that will forever recall its beauties for life.
That’s why tourism plays such a key role in the consumption of Italian wines in the US market. The 5 million people a year who visit Italy from the United States will continue to choose Italian products once they find themselves back in America.
So the key is to learn how to transform challenges into opportunities, and even more important, we need to work together as a team.
We also need more stability, both in Italy and the United States. So our wish is that, in addition to a quick recovery of the market, the next President of the United States will commit himself to supporting the bond existing between our markets, as, and even more than before.
