Convegno "Il Pinot Grigio Italiano e la sfida del mercato mondiale: storia e prospettive", intervento di Robert Joseph

1. Pinot Grigio – the superstar of wine

2. A brief moment in the Or a long career?
spotlight?

3. A brief infatuation? Enduring love?

4. The Past
Wine evolution Present
The
•People drank wine that was •People drink wine from across the
produced close to where they world
lived
• They drank what their parents • They drink what they like (and is in
drank fashion)
•They cared where wines came •Today they are often more
from. interested in brand, grape and price.
•Wine is bought by women
•Wine was bought by men
•Wine is bought from supermarkets,
•Wine was bought from the or online
producer, or a specialist retailer
•Wine was drunk with food •Wine is drunk without food, as an
alternative to beer and vodka
•They respected official •People no longer respect official
designations (DOC, DOCG etc) designations (DOC, DOCG etc)

5. US Five Year Category Growth Rates
Over the last five years, Spirits and Wine consumption have grown much faster than
Beer consumption
The B.I.G. 2010 Liquor , Wine And Beer Handbooks
5
U.S. Drinks Conference 2010

6. US Wine Consumption Trend
Wine consumption has grown steadily posting 0.8% growth in 2009 to reach a record
level of 296,960 million 9-liter cases.
The B.I.G. 2010 Wine Handbook (Thousands 9-Liter Cases)
U.S. Drinks Conference 2010 6

7. US Wine Consumption By Type
Table Wines represent over 91% of U.S. Wine consumption and they continued to
show growth of almost 1% in 2009
U.S. Drinks Conference 2010
Source: Adam’s 2008 Advance. Volume Stated On A Thousands Of 2.25-gallon Cases Basis.
7 7
The B.I.G. 2010 Wine Handbook (Thousands 9-Liter Cases )

8. This has all been to the advantage
of Pinot Grigio
•Fashionable
•Easy to drink with and without food
•Popular with women
•Widely available
•Easy to find (and pronounce – for non Italians) on the
shelf
•Uncomplicated

9. US Table Wine Consumption By
Varietal
Chardonnay, Cabernet and Merlot combine for 54% of U.S. Wine consumption by All
Other Varietals represent opportunity at 24%
9
U.S. Drinks Conference 2010
Source: Adam’s 2008 Advance. Volume Stated On A Thousands Of 2.25-gallon Cases Basis.
The B.I.G. 2010 Wine Handbook 9

10. Top 25 US Import Wine Brand
Trends
10
U.S. Drinks Conference 2010
The B.I.G. 2010 Wine Handbook (Thousands 9-Liter Cases ) 10

11. UK Table Wine Consumption By
Varietal
11
U.S. Drinks Conference 2010
Source: Adam’s 2008 Advance. Volume Stated On A Thousands Of 2.25-gallon Cases Basis.
The B.I.G. 2010 Wine Handbook 11

12. UK Table Wine Consumption By
Varietal
12
U.S. Drinks Conference 2010
Source: Adam’s 2008 Advance. Volume Stated On A Thousands Of 2.25-gallon Cases Basis.
The B.I.G. 2010 Wine Handbook 12

13. Can the good times last?

14. THE SWOT ANALYSIS
STRENGTHS WEAKNESSES
Popular Unpopular with opinion formers
Easy to understand and like Too widely available?
Affordable Price dropping
Critical mass Becoming a commodity
Strong brands Losing links to Italy
Associated with Italy
OPPORTUNITIES THREATS
New styles (sparkling, pink etc) Other styles (Moscato,
Blends Albarino, Torrontes, Pinot
New Brands Bianco, Chardonnay)
New markets (China etc) Boredom

15. Why do people drink Pinot Grigio?
The flavour

16. Pinot Grigio found a niche in part because it's more versatile and less
assertive than oaky chardonnay… Most serious wine drinkers shun Pinot
Grigio the way they once shunned Soave. And not entirely without
reason… the fact is that 99% of what's called Pinot Grigio from Italy is
dilute and flavor-challenged, a refreshing, lemonade-like food
lubricant/buzz-delivery system.
Like many of my peers, I turned my back on Pinot Grigio early in the
1990s, and I remained slightly embarrassed about my early enthusiasm,
as I did about my earlier reverence for the music of the Monkees…. As its
popularity grew, its identity became more nebulous and it was planted all
over Italy, far beyond its natural home in the northeast.
Jay McInerney- Wall Street Journal

18. Chardonnay Sauvignon Pinot Grigio
Blanc
“Rich”, “Fresh”, “Easy” “Soft
“buttery”, “grassy”,
“oaky” “crisp”

19. Why do people drink Pinot Grigio?
They like the “clean” “fresh”, “smooth”
character.
Some of them might get bored with it, if the
critics are to be believed

23. The critics are being replaced by “people
power”
Pinot Grigio is “the people’s wine” – like White
Zinfandel
Popular – despite the critics

25. But does it have to be Italian?

30. 2010 was the year that Italy might have gone down to below a 50% share of the Pinot
Grigio market, at least for Middle America
Italy: 49% (10% increase in case sales)
California: 36% (18% increase in case sales)
Australia: 9% (11% decrease in case sales)
Texas: 3%, which is mainly California grapes sourced but bottled in Texas (5%
increase in case sales)
Oregon: 2% (57% increase in case sales)
All others: 1%
Italy has lost about 4% since 2008.
Australia has lost 1% since 2009. California value brands are soaring (most notably,
Barefoot).
Italian brands that are still strong, but challenged by the California surge are Bella
Sera (doing well in larger size), Mezzacorona and Ecco Domani.
Pricier Pinot Grigio’s (over $10 retail) are relatively flat.
So it’s still a hot category, but value wines still reign. Italy’s day of Pinot Grigio
dominance look like they are over.
America, once again has assimilated something uniquely Italian, just like their people
and their foods.
Statistics from Alfonso Cevola, / The Blend

32. Breakdow of Purchased Vines -2010
n •Other Whites Include
•French Colombard
Pinot Grigio
Other White •Sauvignon Blanc
4% Cabernet
Muscat Alexander 4% Sauvignon •Symphony
10% 23%
Chardonnay
18%
Merlot
4%
Pinot Noir
7%
•Other Reds Include
•Malbec Other Red
•Petite Verdot 9% Rubired
•Petite Sirah Zinfandel 17%
4%
•Ruby Cabernet
•Barbera

33. Pinot Grigio
Estimated California Pinot Grigio Acreage, 2010 •The Numbers:
30,000 •21% non-bearing
•8.32% AGR
25,000
•The Supply Trend:
5,420
20,000
•Growth at lower
end
15,000 •Plantings slowing
•The Implication:
10,000 20,000 •Growth is
manageable based
5,000 on current sales
•We don’t know
0
market capacity
Bearing Non-Bearing
•May be
cannibalizing other
white wines

34. And what if the brand becomes more important
than the region or country?

35. Gallo’s link with
fashion supports the
“female-friendly”
quality of Pinot Grigio.

39. Cupcake is Italian. Little Black Dress is
Californian.
But they could switch.
And the blogger writing about Flipflop wasn’t
interested in where it came from.

41. DoILikeIt? research into UK Champagne drinkers
“Very” or “Quite” important
Something you know and previously liked 97.5%
Price 97.5%
Critical recommendation 64%
Brand Name 62.5%
Wilson Report research.
Main reason to buy
Wine Intelligence Wine
Consumer research. Main
reason to buy
Price promotions 70%
Grape variety
69%
Brand awareness 65%
Friend/family
Recommendation 60%
Country of origin 59%
Region of origin 50%

42. Ogio – every brand owner’s nightmare. Created in a few
hours exclusively for a UK supermarket (Tesco) and now UK
no 18 best seller without any marketing.
Originally Ogio was created for Italian wine, now the brand
covers French and Californian wine. And the Pinot Grigio
does not have to be Italian...

44. Er… and where’s it from?

45. A “South African” brand,
with a Romanian Pinot
Grigio

46. And what should Pinot Grigio cost

47. Top US selling Pinot Grigio – by volume
by volume by value
ECCO DOMANI SANTA MARGHERITA
SANTA MARGHERITA ECCO DOMANI
ROBERT MONDAVI PRIVATE SELECTON ROBERT MONDAVI PRIVATE SELECTN
CLOS DU BOIS CLASSICS CLOS DU BOIS CLASSICS
ESTANCIA ESTANCIA
CHATEAU STE MICHELLE MID TIER CHATEAU STE MICHELLE MID TIER
RUFFINO RUFFINO
KRIS KRIS
VOGA DA VINCI
STERLING VINTNERS COLLECTION KING ESTATE
DA VINCI VOGA
KING ESTATE STERLING VINTNERS COLLECTION
A TO Z ECCO DOMANI MASO CANALI
ERATH ERATH
GNARLY HEAD A TO Z
LITTLE BLACK DRESS SAN GIUSEPPE
MIDDLE SISTER FRANCIS COPPOLA DIAMOND
ECCO DOMANI MASO CANALI LITTLE BLACK DRESS
DUCK POND GNARLY HEAD
SAN GIUSEPPE DUCK POND
FRANCIS COPPOLA DIAMOND CASTELLO BANFI
EOLA HILLS CANDONI
CANDONI DANZANTE
DANZANTE MIDDLE SISTER
CASTELLO BANFI EOLA HILLS

48. Pinot Grigio – Average US retail price
SANTA MARGHERITA $20-25
ECCO DOMANI MASO CANALI $15-20 Big sellers are
CASTELLO BANFI
KING ESTATE
$15-20
$10-15
still Italian
SAN GIUSEPPE $10-15 $15-20, but
DA VINCI $10-15
KRIS $10-15 California
FRANCIS COPPOLA DIAMOND
A TO Z
$10-15
$10-15
<$10 are
ERATH $10-15 growing fast.
CANDONI $10-15
ESTANCIA $10-15
MIDDLE SISTER
DANZANTE
$10-15
$10-15
Will people
CLOS DU BOIS CLASSICS <$10 Grow used to
DUCK POND <$10
VOGA <$10 these prices?
CHATEAU STE MICHELLE MID TIER <$10
STERLING VINTNERS COLLECTION <$10
ECCO DOMANI <$10
RUFFINO <$10
LITTLE BLACK DRESS <$10
EOLA HILLS <$10
GNARLY HEAD <$10
ROBERT MONDAVI PRIVATE SELECTN <$10

49. In the UK, Ogio,
(and Dino and
others) are either
£9 or half price.
85-95% of these
wines are bought
at £4.49, just over
the UK average
retail price of
£4.45.

50. What about the threats?
Beware of Chardonnay in a more neutral style.

51. Chardonnay
Estimated California Chardonnay Acreage, 2010 •The Numbers:
120,000 •10% non-bearing
11,890 •3.64% AGR
100,000
•The Supply Trend:
80,000
•Growth at lower
end
60,000 •Minimal pullouts
105,000 •The Implication:
40,000 •Growth is
manageable
20,000 •Large crops could
be problematic
0
•Annual
Bearing Non-Bearing
displacement by
imports is
possible

52. And other “new grape varieties”

54. Muscat Alexander
Estimated California Muscat Alex Acreage, 2010 •The Numbers:
7,000 •25% Non-Bearing
6,000
•The Supply Trend:
1,713 •Short thru 2012
5,000 •2010 planting
4,000
explosion begins
bearing in 2013
3,000 •The Implication:
5,000
•Big shift in supply
2,000
coming
1,000 •Limited use, but
hot!
0
•We don’t know
Bearing Non-Bearing
market capacity
•If it’s a fad, we’re
in trouble

55. So does Torrontés have Pinot Grigio-like consumer potential? Importer
Des Cross says the Torrontés consumer is "overwhelmingly female, with a
slight tendency to younger women."

56. Other possible contenders:
Pinot Bianco
(Possibly attractive because of the Pinot connection)
Albarino
(Possibly attractive because of the Pinot connection)
Riesling
Always a possibility, but a long time in coming

59. Emerging Markets
•Asia
•China – Prefers French red (Bordeaux) at the
moment but will hopefully develop thanks to
female tastes
•Korea – High potential, following Japan
•India – Not yet a market as such. But has
long term potential and not married to red
wine
•Brazil
•High potential. 200m population. Young
population. Increasingly prosperous. Likes
wine. Likes to try new things.

60. Conclusions
•Italian Pinot Grigio IS a style with a future
•Italian Pinot Grigio IS at risk from cheaper
versions from other countries
•Italian Brand owners ARE at risk from
Supermarket own brands – and others
(which can change nationality)

61. Advice
•Italian Pinot Grigio producers (and/or
regional producers) should design and
protect their own bottle and/or label which
cannot be used by Pinot Grigios from
anywhere else.
•Wines in this packaging should meet
agreed quality and style criteria.
•A budget should be devoted to the
promotion of the packaging
•It should be incorporated into sales