Pound the pavement to break into the tough American model. United States, target of the moment for wine business

13/10/2015 10 things to know about the American market from the latest Focus USA

One of the three fastest-growing world markets in the last few years, the United States is certainly the target of the moment for wine business, especially for Italian wine business. What is absolutely necessary to know about the USA?

1. The USA is the top market in the world for consumption and imports, followed by Great Britain, Canada, Germany and China (which recorded a 2,600% increase from 2004 to 2014). Comparing China and the USA, the American market is certainly easier to approach.

2. Californian wines aside, Italy is the foreign leader that imports wine to the USA with 32%. The other countries in which Italy tops the imports are Germany, Switzerland, and Russia, while in others like China (6th place), Japan (3rd), the UK (2nd), it follows France.

3. The most recent data from the first quarter of 2015 shows how the United States is still growing. But the most interesting bit of information is that Italy is keeping up with the demand: while the total import numbers have grown by 21%, Italy is in line with a 21% increase.

4. The biggest competitor for Italy is local wine. What is produced in the USA? There are currently about 228,000 hectares of vineyards, and the most cultivated variety is Chardonnay. Of course, 85% of the production is in California. Unlike Italy, most of the production is strongly concentrated in this area.

5. The adjectives that characterize the American market are mature, curious and interested in international wines. While in Italy, the crisis can still be felt, after the 2009 crash in the USA, things have started up again and for the next five years, it will continue to pick up with unemployment rates under 5%. Also, the strengthening of the American dollar signifies more competitiveness of our wines compared to those in the southern hemisphere.

6. An interesting survey on American millennials (20-40 year olds) shows how this generation will replace today’s consumers of Baby Boomers (50-60 year olds) in the future. Millennials play a fundamental role in consumer dynamics.

7. The distribution system is strongly regulated: it is a three-tier system. The three rings of the chain are importers, distributors (approximately 100, but the system is dominated by few), and retailers (GDO, liquor stores and Horeca channels). At the base of this system theoretically the producer may only sell to the importer, but the system can actually be bypassed in 42 states and the producer can sell directly to the consumer. The future of the rigid American model is not easy to foresee. This model requires the wineries to be more present on the market and in contact with importers and distributors.

8. With a great fragmentation of supply, there is segmentation in demand. The American consumer looks for diversity and does not tend to be loyal. This expands the possibilities; there is an increasing number of specialized importers for specific markets and countries of origin.

9. The winery must make even more of an effort to find new importers, meet them, and get to know them personally… they have to pound the pavement. There are specialized importers even for small business that say “we do business together”. They are not big companies, so they need to find wineries with an established identity, people with great charisma and people skills that make their business a winner.

10. To go and find opportunities in such a dynamic, bustling, and important market as the United States, different organizational models are necessary. This involves maintaining one’s own identity, but being able to invest in a professionalism that can travel and can stay an extra day. The touch and go approach is destined to fade. (Source: www.winemeridian.com)