The global wine industry/market consists of the retail sale of champagne, fortified wine, sparkling wine and still wine sold in: North America, South America, Western Europe, Eastern Europe, MEA and the Asia-Pacific region.
Still wine is the largest segment of the global wine market and accounts for about 80% of the market’s total value.The fortified wine segment accounts for a 12.8% of the market, champagne 5.2% and sparkling wine 2%.
The Global Wine industry is highly fragmented. The market share of Constellation Brands, the leading player in the global wine market, generated only 3.8% of the market’s volume. The other key global player include: E & J Gallo Winery with 2.8% of the market; Foster’s 2.1%; The Wine Group 1.9% and all the other industry participants holding 89.4% of the market share. Wine is distributed in the folowing channels: Supermarkets / hypermarkets 35.8%; On-trade 27.6%; Specialist Retailers 24.2% and Other 12.4%.
According to the Marketline Industry database, the Global wine market has experienced steady growth in recent years. The global wine market is generated revenue of $257,504,000,000 in 2011. This represents a compound annual growth rate of 1.9% between the years 2007 and 2011.
The market is predicted to continue growing moderately until 2016. In 2016, the global wine market is forecast to have a value of $303.6 billion, an increase of 17.9% since 2011 with an average annual growth rate of about 3 %.
The Americas and the Asia-Pacific markets will grow at a higher rate of between 3.4% and 12.6% respectively, over the same period. Their respective 2011 sales values will be $54,258,000,000 and $31,560,009,000.
The Italian wine market has experienced market declines from 2007 and predicted to continue declining marginally over the forecast period to 2016.
Italy is one of the world’s largest and oldest producers of wine. Total revenue in 2011 was $38,060,2oo,000 representing a compound annual rate of change (CARC) of -0.9% between 2007 and 2011. The market’s volume is expected to fall to 2,659.6 million liters by the end of 2016, representing a CARC of -1% for the 2011-2016 period. The largest segment of the Italian market in 2011 was still wine with total revenue of $33,545,5oo,000 equivalent to 88.1% of the market’s overall value. The fortified wine segment will contribute revenue of $3,255,400,000.
The 2011 population of Italy was 60.7 million. The GDP was $1,136.2 billion. The nation is cloaked with vineyards and the wine industry makes a significant contribution to the county’s GDP. Although the Global Market is highly fragmented; with the top four players controll 10.6% of the total market by volume. The Italian market is even more fragmented. Here’s the market share of the top three players: CIVIRO (6.8%), Bacardi 0.8% and Casa Vinicola Caldirola 0.1%. All the other players in the industry control 92.3% of the market share.
CAVIRO is headquartered in Faenza, Italy. The company operates 41 wineries with more than 20,000 growers throughout Italy. Some of the key markets for the company include Italy, the UK, Japan, Germany and France.
Casa Vinicola Caldirola produces still and sparkling wines and produces more than 60 million bottles per year from its bottling facilities in Missaglia and Gattinara, Italy. The company markets its product to 40 countries under brand names like Casa Vinicola Caldirola and Maestri Cantinieri.
The Italian wine market is characterized by intense rivalry. Great wine families have been making wine in Italy for centuries like the Antinori and the Frescobaldi families. They have built very strong brand names with a powerful portfolio of varietals. Wine producers can differentiate their products by the overall segment (still, fortified or sparkling) and by the region of the origin and the varietal. The end product is strongly influenced by the region of origin, the grape that is used in the process and the skill of the winemaker (Datamonitor, 2009). The retailers constitute the major distribution channel in the Italian wine market with over 50% of the total sales.
Winemakers generally pursue vertically integrated business models that involve growing, harvesting, crushing, aging and bottling their wine. Most winemakers own or lease vineyards. Sometimes large companies source grapes from third-party growers and the company-owned vineyards are used for producing premium wines; while third-party grapes are used for producing lower-priced products. Wine is vulnerable to the threat from its substitute beverages including spirits and beer.
The Italian wine industry provides a wide assortment of wines with various aromas, flavors and textures that deploy different wine-making practices. The diversity of these wines tends to harmonize with various types of food because of their overall natural acidity.
The extensive latitudinal range of the terroir allows the grapevines to be caressed by the convergence of many natural forces including climate, temperature variation, sunshine, soil, humidity, slope, elevation, sea breeze and rainfall. Terroir is a French word that passionately describes the total impact of a given microclimate’s geography. These forces produce a kaleidoscope of wines in many distinctive wine regions throughout the Italian peninsula.
The Italian winemakers rely on the “appellation” system to control the quality of their wine. This is a French concept known as Appellation d’Origine Controlee. This term is used to describe the region or specific area where wine is produced. Since the amount of good terroir is limited, so is the production of outstanding wines.
The Napa area of California and the Bordeaux region of France both provide good examples of the concept of terroir.
In northern Italy, wine regions border France, Switzerland and Austria. The grapes that thrive in these regions and the wine that is produced from these grapes are quite different from the wines that are grown in Tuscany or in the volcanic soil of Campania and Sicily. Apulia and Sicily are the largest regional wine producers: they each control about 17% of Italy’s total production. Some regions produce cool-climate varietals and others do not. Some regions produce mostly white wines from grapes like Chardonnay, Pinot Grigio or Vermentino. Other regions produce mostly red wines like Barolo from red Nebbiolo grapes or Chianti from red Sangiovese grapes. The tannins of red wine generally overpower the delicate flavor of fish, so fish is often accompanied by white wine.
Beyond terroir and weather conditions, wine making offers many opportunities for winemakers to improve or damage their wine. The diversity of Italian wines can be intimidating to some oenophiles because the names are so confusing.
In some regions, wines are named after the grape variety used to make them and in other regions, the wine is named after the village where it is made. Barolo is a village and Barbera is a grape. Sometimes the wine name combines the grape and the village, like Montepulciano d’Abruzzo.
In addition, government regulations define areas where specific wines can be made using the acronyms DOCG, DOC, and IGT. To complicate issues further, some vintages are much better and some wineries earn coveted awards and high ratings from wine critics. Generally, truly great wines improve with age because they gain complexity and character, just like many people. Read this post to learn more about the contemporary history of wine in Italy: http://acevola.blogspot.com/2012/08/teaching-old-do-c-g-new-tricks.html
The Italian government regulates the wine industry and provides production parameters for winemakers. To understand these parameters, we can construct a pyramid that represents the quality of Italian wine. At the pinnacle, we will place the hypothetical best wine with the most restrictive production guidelines and at the base of the pyramid we can aggregate the table wines that do not have to adhere to stringent quality guidelines. These designations formally recognize the areas in Italy that are noted for prestigious wine production. To differentiate these wines the government has created the following evolving paradigm with rigid labeling requirements:
DOCG: Denominazione di Origine Controllata e Garantita
Location is certified and guaranteed
Denotes the most elite wines
Provides more stringent regulations
Requires longer aging periods and lower yields per vine
*There are over 20 elite Italian wines that have earned special recognition, including:
Brachetto d’Acqui (Piedmont)
Ricioto di Soave (Venato)
Brunello di Montalcino (Tuscany)
Vino Nobile di Montepulciano (Tuscany)
Chianti Classico (Tuscany)
Vernaccia di San Gimignano (Tuscany)
Valtellina Superiore (Lombardy)
Albana di Romagna (Emilia-Romagna)
Torgiano Rosso Riserva (Umbria)
Montefalco Sagrantino (Umbria)
Vermentino di Gallura (Sardinia)
Montepulciano d’Abruzzo Colline Teramane (Abruzzo)
DOC: Denominazione di Origine Controllata
DOC rules describe exact geographic location of the grapes, aging parameters, permissible grape varieties that can be used in blends, alcohol content policies, pruning and trellising systems and winemaking practices.
There are about 300 DOC wines produced in the following regions of Italy:
% of Region’s
DOC Wine Region
*79.1% Trentino-Alto Adige are DOC
*60.5% Friuli-Venezia-Giulia are DOC
*55.8% Piedmont are DOC
*55.5% Tuscany are DOC
*47.3% Lombardy are DOC
*30.5% Umbria are DOC
*29.1% Venato are DOC
*22.8% Aosta Valley are DOC
*21.4% Emilia-Romagna are DOC
*19.6% Marche are DOC
*17.6% Abruzzo are DOC
*15.6 % Sardinia are DOC
*13.9% Liguria are DOC
*6.5% Latium are DOC
*3.9% Molise are DOC
*3.8% Apulia are DOC
*2.8% Campania are DOC
*2.4% Calabria are DOC
*2.4% Basilicata are DOC
*2.1% Sicily are DOC
IGT: Indicazione Geografica Tipica
These wines are from a typical geographic region and adhere to less restrictive regulations.
There are more than 120 IGT wines and these wines are considered better than average table wines
Table Wines: Vino di Tavola
****Remember: Wine consumption depends upon your personal preferences.
A wine that you love may be an ordinary table wine, IGT, DOC or DOCG. Your pallet should be the judge, not the government’s rating system!!
Some people prefer a blend to a wine that is made from only one exclusive grape.
Some prefer still wine and others prefer a sparkling wine. Experiment with the local wines when you have your “Vino con Vista”—Salute!!
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