The Future Of Italian Wines In The U.S. After The Coronavirus

When it comes to wine, Italy and the U.S. have had a long history together that is evident by Italian wines representing the number one spot when it comes to imported red and white table wines into the American market. According to Nielsen, last year Italian wines totaled 1.2 billion in sales in the U.S. increasing its share by 2%. This fact was proudly stated by Gianfranco Sorrentino, president of Gruppo Italiano and co-owner of the Il Gattopardo Group (a group of Italian restaurants in New York City), during a recent webinar he led that helps the Gruppo Italiano nonprofit mission of promoting the Italian culture and products. And although the big wine brands are thriving in retail and online sales during the coronavirus crisis, Gianfranco expressed his concern about “small, unknown artisan producers” that are typically sold in restaurants and that it was important for the Italian community in America to continue to promote these precious gems that have limited resources. 

Wine Sales

Gino Colangelo, president and co-founder of Colangelo & Partners Public Relations, was there to help moderate the panel as well as give the perspective of a communication company which focuses on fine wine and especially Italian fine wine. There were already shifts in trends regarding the wine industry that have been accelerated by Covid-19; the convergence of commerce and communication (communication companies such as Vinepair selling products and a commerce platform such as SevenFifty coming out with a media company), wine producers becoming more responsible for building their brand’s story as consumers need to connect to the producer and hence the rise of some imported wines bypassing the distribution three-tier system by using a platform like Vinconnect, and finally, the hybrid strategy of marketing wines through events as well as digital. These trends have even become more vital in regards to dealing with the current shutdowns from coronavirus that don’t allow people to travel, meet in large groups or allow tourists to visit wine regions that create longtime, loyal customers for life. All of these trends point to the idea that the wine drinker wants to find as close of a connection to the people behind the wine, they want to know their story and they want to feel a personal connection.

In regards to sales, Gino said that in 2019 wine sales overall declined for the first time in 25 years in the U.S. by 1%, according to IWSR research, due to the rising popularity of hard seltzer and spirits yet since the Covid crisis wine sales are trending up and online wine sales have increased by 234% within the past couple of months. “Many consumers are reallocating money that they would spend in a restaurant to buying better wine and the biggest growth category is $20 to $25”, Gino noted. And certainly this increase in sales has been felt by many in the wine business. Due to the new normal that has been created by the crisis, retail and restaurants only allowed to do pickup/delivery in many states, “consumers are not shopping they are buying and they are buying brands” but Gino says that smaller producers should not be discouraged as Italy itself is a brand and Tuscany is a brand and there are so many different Italian wine regions that have a strong brand in the U.S. and that the strong desire for wine drinkers to connect online is an opportunity that any producer can take advantage of no matter their budget.

Italian Wine Producers

Camilla Rossi Chauvenet, owner of Massimago winery in the Valpolicello wine area in Veneto, Italy, expressed her surprise that a recent online virtual tasting she participated in resulted in several cases of wine being sold. Despite being one of the young, fresh faces of Valpolicella that is bringing a new energy (she is a first generation winemaker with the average age of her employees younger than 35 years old) she had never thought of heavily investing in online tastings – and perhaps that is because it wasn’t done on such a massive scale as it is done on the Zoom app today. But this makes her rethink how much money and time she spends flying to various markets in the U.S. that often has her running around with bottles to several different places not always being able to show the wines in ideal conditions compared to spending time with consumers online who are able to have the wines in the comfort of their own home. As one can imagine, it is difficult for the owner/winemaker of a small winery to constantly travel when there is so much to be done in the vineyards and cellar.

Lamberto Frescobaldi, President of Frescobaldi Toscana as well as being part of the noble Florentine family that has been making wine in Tuscany for 700 years, agreed with Camilla’s sentiments of focusing on social media even though he represents wines that are much more widely known and has received many awards with some commending his company’s work in the digital space. But even with all his success, Lamberto never rests on his laurels and hence why he continues to thrive and have passion for the wine business. He noted that this was a “great opportunity for consumers” as everyone will have to be better than ever before; his wines will have to be better, wine importers will have to give greater service and restaurants will have to give better experiences. But he understood that wines such as his most famous estates would have an easier time than smaller producers and so the idea of helping each other and making sure the multitude of smaller, newer wineries such as Camilla’s Massimago is important to keep Italian wines popular among young people after the Covid crisis. And not all of Lamberto’s wines are well-known blockbusters as he has special projects that amount to tiny quantities being made such as making wine on a penal colony to help prisoners learn a trade that could help them once they are released. These lesser known wines mean just as much, if not more, to Lamberto and not having restaurants being able to hand sell the wine makes it extremely difficult to continue selling them but he will not give up.

Nunzio Castaldo, owner of Panebianco Wines Import, has worked in the U.S. wine market for over 34 years working with one of the top Italian wine importers until he bought his own import business. Panebianco was founded by another great champion of small Italian family wines who passed away a few years ago allowing for Nunzio to buy the company; he still continues the original mission of the company even under this most challenging of circumstances as his wines sell best in a restaurant environment. But Nunzio reiterated the importance of wine producers connecting with the public via social media as that will not only bring in some sales to survive until restaurants are up and running at full force again but it could help to establish more intimate relationships between wine producer and wine drinker that will help importers to not only make placements on restaurant wine lists but to keep them there. Although Panebianco is “suffering” Nunzio says that “every tragedy has a silver lining” and these times are really forcing wine producers to get out of their comfort box and to see for themselves the benefit of engaging with the public on digital formats that extend past tastings on Zoom apps but also include uploading information and photos on Vivino and having a dialogue on the platforms where people are drinking and sharing wines. But he is seeing a little light at the end of the tunnel with wine markets in Texas, Georgia and Florida showing an increase in restaurant wine sales since starting to slowly open on May 25^th as they are only “losing 30% from last year” and that once New York, Illinois and Massachusetts opens, even at just 50% capacity, that it will make a significant difference to those wine businesses dependent on restaurant wines sales.

Nunzio’s feels that a decent amount of restaurants will come back and that was backed up with the added insight from William F. Dahill, partner at Dunnington Bartholow & Miller, who discussed Federal, State and City financial support that are represented in the updated PPP loan (a loan that has complete forgiveness if certain parameters are met), EIDL loan and the New York Forward Loan Fund (NYFLF) specifically for New Yorkers that will provide many small business owners much needed relief and the updated PPP being a lifesaver for many restaurants.

Italian American Perspective

But Italian wine producers were not the only ones invited to speak as many American wine producers with their roots in Italian culture are crucial when it comes to promoting Italy. Peter Mondavi, who comes from one of the most famous U.S. wine families, was there representing one of the oldest wineries in Napa Valley, Charles Krug. Peter briefly went over his family tree which started with his grandparents coming to the U.S. with “virtually nothing” from the Marche wine region in Italy. “No wine history in our background” Peter remarked but his grandfather had an entrepreneurial spirit and took advantage of the Prohibition Era by sending fresh wine grapes from California back East so people could make wine. It was a very successful business and they were able to buy Charles Krug in 1943. His father, Peter, and his uncle, Robert, ran it together until Robert decided to split off and the rest is history. Today Charles Krug is completely owned by the Peter Mondavi side of the family as well as the Mondavi fourth generation finding their own way in the wine world. Since restaurant sales and tourism is down, Peter has had to focus his family’s business more towards online sales from their website as well as phone sales to continue wine club sales. Also, he is exploring the virtual tasting experiences and recently had an online fresh pasta class which connects his daughter as she is part of a startup fresh pasta delivery service in London where she currently lives. And so the Italian culture still continues with his family, with even his son working as an engineer in the automotive sector in northern Italy.

Retail is Up but Restaurants are Down

When it comes to wine sales the problem is not so much overall sales but those specifically rooted in the experiences that are had at restaurants that help to transport guests to another world that encourages them to try something else outside of their normal wine selections. Italian restaurants have been an important part of the American way of life establishing a zest for eating and drinking that is rooted in a long history and deep passion, and as much as these online venues help to ride out the waves of this difficult time, it will never come close to the joy and sense of community that restaurants can bring. “From the bottom of my heart”, Gianfranco Sorrentino proclaimed, “nothing can replace a busy, noisy restaurant with waiters opening bottles of wine.” And Lamberto Frescobaldi seconded that idea and pointed out that Italy has survived many things over time such as invaders coming from all directions and in the end they turned it “into a positive” because those invaders ended up falling in love with Italy, and all things Italian ultimately were shared around the world. During this time all those in the wine industry are being given an opportunity to find other avenues that can, down the line, help to increase wine’s place among the younger generation within the digital space yet Lamberto said he can’t wait to see everyone as he expressed with a warm smile, “I want to hug people as we are very physical and down to earth.”

But that is what makes Italy so irresistibly appealing as the people make one feel she is home and she can be Italian too. Not having that personal contact makes many Italian wine and food lovers in America feel homesick as they can’t visit their favorite Italian restaurants. It is almost as if U.S. people are not allowed to go home because we can’t be with our Italian brothers and sisters. Yet that is just one more reason, and the most important, that when the time comes Italian wine and food lovers will never take for granted the Italian restaurants in the U.S. again as nothing is guaranteed in life; that Italian meal or Italian glass of wine or big Italian hug may be the last one so it should be enjoyed to its fullest. If there is anything this crisis has taught many is that everyone’s life is fragile – fragile yet significant.