BY MONICA LARNER
In ancient times, the Italian peninsula was commonly referred to as enotria, or “land of wine,” because of its rich diversity of grape varieties and many acres dedicated to cultivated vines. In more ways than one, Italy became a gigantic nursery and a commercial hub fortuitously positioned at the heart of the Mediterranean for what would become western civilization’s first “globally” traded product: wine.
Italy’s prominence in the global wine industry has in no way diminished despite millennia of history. The sun-drenched North-South peninsula that extends from the thirty-sixth to the forty-sixth parallel embodies pockets of geographical, geological, and climatic perfection between the Upper Adige and the island of Pantelleria for the production of quality wine. Italian tradition is so closely grafted to the vine that the good cheer and easy attitudes associated with wine culture are mirrored in the nation’s temperament.
Despite Italy’s long affinity with vitis vinifera, the Italian wine industry has experienced an invigorating rebirth over the past three decades that truly sets it apart from other European wine nations. American baby boomers may still recall watery Valpolicella or Chianti Classico in hay-wrapped flasks at neighborhood New York eateries, or the generic “white” and “red” wines of Sicily’s Corvo. Wines like those cemented Italy’s reputation as a quantity (as opposed to quality, like in France) producer of wines sold at attractive prices. But as Italy gained confidence during the prosperous post-war years in the areas of design, fashion, and gastronomy, it demonstrated renewed attention to wine. Thanks to a small band of primarily Tuscanvintners, Italy launched itself with aggressive determination onto the world stage as a producer of some of the best wines ever produced anywhere: Amarone, Barolo, Brunello di Montalcino, and Passito di Pantelleria. Italian wine information and experiences now sit amongst the most coveted wine regions of the world.
Like a happy epidemic, modern viticulture and enological techniques swept across the Italian peninsula throughout the 1980s and 1990s: Vertical shoot positioning and bilateral cordon trellising in vineyards; stainless steel, temperature-controlled fermentation, and barrique wood aging in wineries. As profits soared, producers reinvested in technology, personnel, and high-priced consultants and a modern Italian wine revolution had suddenly taken place.
As it stands, Italy is the world’s second largest producer of wine after France. Each year, one in fifty Italians is involved with the grape harvest. And like France, Italy has adopted a rigorous controlled appellation system that imposes strict controls with regulations governing vineyard quality, yields per acre, and aging practices among other things. There are over three hundred DOC (Denominazioni di Origine Controllata) and DOCG (Denominazioni di Origine Controllata e Garantita) wines today and the classifications increase to over five hundred when IGT (Indicazioni Geografica Tipica) wines are factored in. Thanks to this system, Italy’s fifty thousand wineries enjoy a competitive advantage when it comes to the production and sales of quality wines. These Italian wine terms allow consumers to understand various levels of designation so they can make informed buying decisions.
Interestingly, there is a second wine revolution underway that promises to unlock potential uniquely associated with Italy. It is the re-evaluation and celebration of Italy’s rich patrimony of “indigenous” grapes. (Because some varieties actually originated outside Italy, producers often refer to them as “traditional” varieties instead.) These are grapes—like Nero d’Avola, Fiano, Sagrantino, and Teroldego—that only modern enotria can offer to world consumers. As a result, a rapidly increasing number of vintners from Italy’s twenty winemaking regions are banking on “traditional” varieties to distinguish themselves in a market dominated by “international” varieties such as Merlot, Cabernet Sauvignon, and Chardonnay.
The Italian Alps butt against the long expanses of the Po River plains leaving tiny pockets and microclimates along the foot of the mountains that are each linked to their own special wine. Starting in northwestern Piedmont, Nebbiolo grapes form two tall pillars of Italy’s wine legacy: Barolo and Barbaresco, named in the French tradition after the hilltop hamlets where the wines were born. Like in Burgundy, the exclusivity of these wines has a lot to do with winemakers’ battle against nature and the wine’s extraordinary ability to age. Rare vintages like the stellar 1985 or 1990 Barolos are the darlings of serious wine collectors.
Further east, in the Veneto region, vintners follow an ancient formula in which wine is made from raisins dried on straw mats. With its higher concentration and alcohol, silky Amarone is Italy’s most distinctive wine and can command record prices for new-releases. The Veneto, Trentino, Alto Adige, and Friuli-Venezia Giulia are celebrated for their white wines—such as the phenomenally successful Pinot Grigio. Italy’s best sparkling wine is made in Trentino and the Franciacorta area of Lombardy (known as the “Champagne of Italy”) under strict regulation with Pinot Noir and Chardonnay grapes.
With its cypress-crested hills and beautiful stone farmhouses, Tuscany is the pin-up queen of Italian enology. The region’s iconic dreamscape has helped promote the image of Italian wine abroad unlike no other. Within Tuscany’s borders is a treasure-trove of excellent wines: Chianti Classico, Brunello di Montalcino, Vino Nobile di Montepulciano, San Gimignano whites, Bolgheri and Maremma reds. Italy’s wine revolution started here when storied producers like Piero Antinori worked outside appellation regulations to make wines blended with international varieties such as Cabernet Sauvignon. These wines are known as Super Tuscans and are considered par with the top crus of Bordeaux and California.
Central Italy delivers many more exciting wines such as Sagrantino from the Umbrian town of Montefalco, dense and dark Montepulciano from Abruzzo, and white Verdicchio from Le Marche.
The regions of southern Italy, and the island of Sicily in particular, are regarded as Italy’s enological frontier: Relaxed regulation and increased experimentation promise a bright future for vintners and investors alike. In many ways, Italy’s south is a “new world” wine region locked within the confines of an “old world” wine reality. This unique duality has many betting on its enological promise.
Campania boasts wonderful whites such as Fiano and Greco di Tufo that embody crisp, mineral characteristics from volcanic soils. Its red is Taurasi (“the Barolo of the south”) made from Aglianico. That same grape makes Basilicata’s much-hyped Aglianico del Vulture. Puglia, the “heel” of the boot of Italy, was mostly a producer of bulk wine, but holds it own today among nascent wine regions with its powerhouse Primitivo and Negroamaro grapes.
Sicily has shown keen marketing savvy in bringing media attention to its native grapes like Nero d’Avola(red) and Grillo (a white once used in the production of fortified wine Marsala) and has done a great job of promoting the Italian south in general. Some of Europe’s most sensuous dessert wines come from Sicily’s satellite islands, like the honey-rich Passito di Pantelleria. The Mediterranean’s other big island, Sardinia, is steadily working on its Cannonau and Vermentino grapes to raise the bar on quality there.
As you taste through various regions of Italy you will come to understand the Italian wine dictionary and what makes each region and indigenous grape variety, so special.
Forecasting Wine’s Future
America is now wine’s biggest market, and younger drinkers are starting to shape it
Posted: August 7, 2013
Wine is not tea—there are no leaves at the bottom of a glass that can predict the future. But it is possible to look at how wine sales have changed in the past decade and at what America’s youngest wine drinkers are buying in an attempt to forecast what’s next. Here’s what the sediment says.
American wine drinkers will have an outsized influence on the global wine industry in years to come. The United States is the most important market for wine today and in the foreseeable future. After passing the French and Italians for largest total wine consumption in 2011, according to Impact Databank, Americans consumed 324 million cases of wine in 2012. That’s a 7.7 percent increase over five years ago. And that number is only expected to grow in the next five years. What’s more, 2012 is the first year America was home to 100 million wine drinkers, according to a Wine Market Council (WMC) study. “One hundred million wine drinkers cannot be ignored,” said WMC president John Gillespie, at a presentation of the findings in January.
While Baby Boomers and Generation Xers make up the majority of today’s wine consumers, the large Millennial generation (ages 21 to 34) will shape wine’s future. So what impact are they already having?
One obvious change is the end of a two-color palette, as dry rosé has shifted from a minor player to frequent year-round quaff. Another is the phenomenal growth of sparkling wine, which is no longer being served only on special occasions. The third significant development is that this young generation is buying more imported wine.
Are Americans reliving the ’80s? Pink wine is in and Italian sparklers like Prosecco, Moscato and even Lambrusco are seeing strong sales. Sparkling wine consumption has increased 14 percent from 2007 to 2012, according to Impact, a sister publication of Wine Spectator, and currently sits at 15.5 million cases a year. But while the craze in the ’80s centered on low-priced bubbly, today there’s growth at multiple price points: while spumante Moscato off-premise sales (retail sales, as opposed to restaurants and bars) grew 65.6 percent in 2012 and Prosecco sales rose 35.4 percent, according to a Nielsen report, high-end Champagne imports have surged again too.
Of those bubbly buyers, 25- to 34-year-olds accounted for 21 percent of American sparkling drinkers in 2011, tied for largest demographic segment, according to Impact. “Sparkling is a market for tomorrow,” said Robert Beynat, CEO of Vinexpo, which commissions a look at global trends by International Wine and Spirit Research (IWSR) every two years. It’s also a gender-driven category: 64 percent of bubbly drinkers were female in 2011. Women now make up more than half of America’s core wine drinkers, those who drink wine at least once a week. “In all countries, women will play a big role [in the future],” Beynat predicted.
The rise of rosé is clearly divergent from the blush rush of the ’80s. White Zinfandel sales have been shrinking for years, but premium dry rosé is catching fire, with rosés in the over-$12 category up 33.6 percent off-premise over last year according to the Nielsen report. Provence makes more rosé in this style than any other region in the world, and exports to the U.S. grew 41 percent in 2012 alone, according to the Provence Wine Council.
Young drinkers are also moving away from traditional American regions and toward imported wines. According to Impact, 25- to 34-year-olds represented 24 percent of imported table wine drinkers in 2011, a larger share than any other age group (by comparison, 55- to 64-year-olds were 15 percent of imported wine drinkers). The countries that are reaping the benefits include Italy, with sales growing 12.7 percent between 2007 and 2011 according to the IWSR; Chile, up 14.1 percent; Spain, 16.3 percent; Portugal, 35.5 percent; New Zealand, 44.3 percent; and Argentina,106.6 percent.
While younger drinkers are exploring new options like Portugal more, they’re reaching for California less. The WMC found that while 91 percent of Baby Boomers who drink weekly purchased California wine in the past three months, only 77 percent of Millennials had. Conversely, Millennials were more open to wines from emerging states such as Texas, Virginia, Michigan and Missouri than any other age group.
Americans are also experimenting more with grape varieties. The sales growth of domestic red blends, 21.6 percent off-premise last year, suggests willingness to move away from the comfort of easy-to-understand single grape wines. “At tastings, people used to say, ‘Oh, Malbec,’ but they say, ‘Oh, it’s a blend,’ now,” said Cleo Pahlmeyer, whose family flagship is a Napa Valley Bordeaux blend. “I definitely see more interest in blends. People regard them more highly [now].”
Alternative packaging such as boxes, TetraPaks and other environmentally friendly containers are also catching up: Sales of 3-liter boxes were up 10.7 percent last year and TetraPaks were up 27.9 percent.
With consumers increasingly willing to try new things, the wine industry must continue to adapt with them. While beer sales by volume have declined in the past decade and wine sales have grown, Nielsen found that craft beer sales were up 15.5 percent last year. And spirits growth has matched wine growth over the past decade as well. “If you assume that consumer wallets and stomachs aren’t expandable, then the battle [for beverage of choice] is quite real,” said Nielsen vice president Danny Brager at the WMC conference. While wine sales hold tremendous potential, the future is forever changing.
SWOT analysis and marketing of Italian wine industry in Sweden
This paper shows how to perform the strategic tool of SWOT analysis, introduced by the business and management consultant Albert S. Humphrey in the early 60s. SWOT analysis was thought to help marketers and Chief Executive Officers define successful strategies and gain a competitive position over rivals. Starting from a theoretical section, which will provide a comprehensive overview on SWOT analysis’ structure and functioning, a practical application is developed. More specifically, the research focuses on strengths and weaknesses that affect Italian wine industry and examines the threats it has to face using different kind of tactics as well as the opportunities to exploit when exporting to the Swedish market. The last part of the paper draws some conclusions from the gained information of the SWOT analysis, and depicts several strategies which should be adopted by Italian wine firms to meet the challenges that global competition has arisen.
1. How to use SWOT analysis
2. The Italian wine industry: internal aspects
3. The Swedish wine market: external factors
4. About the Swedish market for alcoholic beverages
5. Concluding remarks on strategic purposes
7. Site links
SWOT analysis is a technique used by marketers to evaluate a firm’s resources and capabilities, but also to monitor the competitive environment it operates in (nota) . This process achieves three main objectives. First, it enables the adoption of the most appropriate marketing strategies. Second, it helps to find the correct position on the target market. Third, it provides a firm with the instruments for prevailing against its competitors and differentiating from them.
SWOT analysis scans environmental factors that are both internal and external. The former two parts are related to the entire value chain and can be classified as strengths (S) and weaknesses W; while the latter are referred to the economic context the organization is settled in, and are grouped in opportunities (O) and threats (T).
Measuring strengths and weaknesses doesn’t mean to list all the features that distinguish a company, which would mean to waste time and miss the focus on what is really important. Instead, strengths and weaknesses imply to examine some crucial features, those relating to critical success factors (Kotler, Armstrong, Saunders, Wong, 2002: pp. 81-85)
More precisely, strengths can be defined as those aspects that a company can draw upon, while others can’t. Thus, strengths contribute to develop its competitive advantage. Examples of such strengths are: good reputation among consumers, exclusive access to the resources and technology needed for production, but also cost-advantages, popular brand names, favourable location of the business and an innovative product.
On the other hand, weaknesses are the lacking essential aspects, or features that could be improved or even, on the opposite, must be avoided. Weaknesses could be: poor reputation, poor quality of a product or service, high costs structure, lack of access to natural resources or distribution networks, badly performed promotion.
Some general evidences have to be considered while measuring strengths and weaknesses. First, they are relative and not absolute: a company can be good at doing something, but that’s not a strength if one of its competitors can do it even better. Moreover, it is important to evaluate the customers’ perspective and to see which strengths or weaknesses they actually perceive.
As far as external factors are concerned, managers need to determine both opportunities and threats they meet in the market they operate in. This evaluation enables to anticipate potential changes that could have a significant impact on the organization.
Opportunities have to be exploited to achieve further profit and growth. They could be, for instance: a new customers’ need, ineffective competitors, the development of new technologies, but also changes in government regulation policies, like the reduction of protection in certain fields, or even changes in social patterns, demography or lifestyle. Opportunities often involve risk, so managers should take in consideration whether expected returns counterbalance risks connected with them.
Threats, the other side of the coin, imply to consider the obstacles and problems that threaten a firm’s business. Possible threats could include: increasing trade barriers and regulations, emergence of new competitors and very aggressive price wars.
Before developing strategies and plans based on the SWOT profile, all the elements developed above (strengths, weaknesses, opportunities and threats) can be used to construct the so-called SWOT matrix, even known as TOWS matrix (nota) . It is a 2×2 grid comprising four areas, one of each representing one of the SWOT elements. This grid has to be filled with suggested strategies to minimize threats, pursue opportunities and overcome weaknesses (Kotabe, Helsen 2011: pp. 283-284).
Italy has been a pioneer in producing wine. Its tradition in this sector dates back to the Etruscans, Greek settlers and the ancient Romans, the first ones to start vineyards and consume wine in the area that is now Italy. All over the following centuries, wine-making was improved, and modern techniques like wine storage or large scale production were initiated. Consequently, the rooted tradition of grape-growing and wine production has contributed to associate wine with Italians’ beliefs, customs and way of life, in other words, with an important part of the Italian cultural capital and identity (Asero, Patti 2009).
Long tradition, high quality wine varieties, autochtone vines and regional specialities like Vin Santo or Ripasso, explain the increasing popularity that Italian wines gain among wine lovers, both locally and internationally. Currently, Italy is the second wine exporter in the world, just behind France (Anderson, Nelgen 2011). The largest importers of its wines are the United States, Germany, UK, Switzerland and Canada, which account for 70% of the Italian wine exports. Further, many Italian wineries possess strong brand names, which enable them to achieve a better competitive position and consumers loyalty. Actually, well-known brands in the Italian industry are associated with a high level of quality. Wine affinados state to appreciate Italian wine, which they consider to be among the best in the world. However, also the internal wine consumption rate is rather high: Italians annually drink almost 50 litres of wine per capita (Wine Economics Research Centre 2009).
Favourable climate conditions
It has to be acknowledged also the extreme importance of the positive climate conditions that Italian wine producers usually can rely on. Italy covers a huge variety of climate zones, from the continental one in the North to the typical Mediterranean climate in the coastal regions, with mild winters and generally dry and hot summers. This results in a vast combination of climate zones and unique micro-climate areas that contributes to what seem to be an endless assortment of grapes, growing in nearly every region of the country. However, this strength could turn in a weakness whenever climate change threatens the harvest of grape, like for example particularly rigid winters or even the globe’s rising temperatures.
Favourable access to labour
Italian wine producers need flexible labour since wine production depends on the weather. As a consequence, it is extremely important to have access to work at the right time of the year. Fortunately, labour force abound in Italy and it’s quite easy to find both seasonal and contracted workers. They are especially immigrants who are usually paid salaries bordering minimum wage. Therefore, it is no exaggeration to say that immigration plays a crucial role in sustaining and nourishing the Italian wine industry.
Four classifications of wine have been established by the Italian Government. The first class is the basic Vino da Tavola (VDT). The second group is the so-called Indicazione Geografica Tipica (IGT), which implies to label wines with the locality of their origin. The other two classifications, Denominazione d’ Origine Controllata (DOC) and the top category Denominazione d’ Origine Controllata e Garantita (DOCG), require to meet stricter regulations. DOC wines have to be produced in certain areas and to conform to certain requirements, while DOCG designation is awarded to DOC wines which accomplish particular quality criteria. Most of the DOCG wines are only allowed to be packed in glass bottles. Other restrictions are referred to the limits on the level of alcohol and grape per hectar that can be produced. This complex but transparent system of rules and legal requirements can be considered, in a certain sense, a strength of Italian wine industry: it is a synonym of high standards and ensures quality and integrity of Italian wines (Vrontis, Thrassou, Rossi 2011). .
Structure of Italian vineyards
In Italy wine production is concentrated into mainly small and usually family-owned wineries, which often do not have any precise strategy. In addition, scarce economies of scale, complex labelling practises, difficulties in affording advertising and the inability to leverage new production could make it challenging for vineyards to emerge and be attractive in the international market competition (Santini, Cavicchi, Rocchi 2006).
One of the main results of wineries being small, family-owned and strictly tied to tradition is their weakly developed ability to tailor production to the changing demand. Knowledge as well as technical and managerial skills can not change as quickly as consumption preferences do (Santini, Cavicchi, Rocchi 2006). In other words, Italian companies have the problem of the so-called “structural inertia”, which means that the speed of reorganization is much slower than the rate at which the environmental conditions change. From this standpoint, tradition is a limiting shortcoming if producers stick to it.
In recent years, some scandals have severely damaged the image of Italian wines in the world, marking a breach of the trust by consumers. In 2008, one of these scandals hit one of Italy’s most prestigious wines, Brunello di Montalcino. Brunellopoli, as the Italian press called it, involved some Tuscan wine producers who were accused for adding, secretly and illegally, unauthorized grapes in the typical Brunello, while rules require to use exclusively Sangiovese grapes. By making fraudulent wine they violated its original purity, inflated production and saved costs (Asimov 2009).
Wine consumption and tastes in Sweden
Sweden produces just a tiny amount of wine, while its wine per-capita consumption are quite high (21.21 litres). As a result, Sweden in fact imports all of the wine that is consumed (99%). In this context, Swedish consumers trust the quality and prestige of Italian bottles of wine, especially premium ones, of which the consumption is in constant rise (The Wine Economics Research Centre 2009).
Favourable exporting conditions
Exporting into Sweden is quite easy for Italian wine producers. First, most of alcoholic beverages are allowed to enter Sweden only by the licensed importers (see “Threats”), this gives automatically the possibility and “the must” to choose between different competent partners. Another important marketplace is the so called tax-free market on the Baltic Sea (ferryboats, cruising ships), but our article is only about the land-based market with its special conditions.
The Swedish wine retail system and the impact of regulations
The Swedish alcohol trade consists of two separate parts: the importers/suppliers and the retailer, the retailer being the state-owned Systembolaget AB which has the monopoly as retailer. The idea of a state owned monopolist company to sell alcohol is quite typical in Scandinavian countries and has historical roots. We should understand that this part of Europe has traditionally belonged to so called Vodka Belt including not only the North-Europe, but also parts of Central-Europe. Knowing this it might be easier to understand the idea that a state owned monopoly as the only retailer for alcohol, with strict and controlling rules, might be able to minimize the alcohol-related problems in a country.
“Systembolaget exists for one reason: To minimize alcohol-related problems by selling alcohol in a responsible way, without profit motive.” This sentence can be found on the website of Systembolaget. In its “2011 Responsibility Report”, the alcohol policy-based mandate given to Systembolaget by the government is described as the foundation of the existence of Systembolaget. “We shall help limit the harmful effects of alcohol by selling alcoholic drinks responsibly. Systembolaget shall, furthermore, work continously to increase its operational efficiency and thereby create scope for development and renewal. Responsibility issues shall be integrated into our corporate culture and the way we manage our operations” (2011 Responsibility Report). This quotation significates clearly the unusual character of Systembolaget, and gives a hint about a very special business environment for the companies wanting to participate in the Swedish trade of alcoholic beverages.
Systembolaget is one of the world’s largest buyers of wine and spirits, it sells and controls the selling of all alcoholic beverages to end consumers, apart from those with less than 3.5% alcohol (Veseth 2008). In Sweden wine importers have two possibilities. The licensed importers are allowed to sell only to Systembolaget, and to Horeca-branch(nota) – and Systembolaget is allowed to buy only from these around 800 licensed importers, from which around twenty can be seen as major actors.
This means that exporting alcohol to Sweden has to go through these licensed importers/suppliers. Nevertheless, 80% of alcohol is sold in the off-trade market, which means through Systembolaget, while only the 6% of alcohol is sold by the on-trade sector to consumers. However, the retail monopoly is widely escaped through the black market. Moreover, consumers go abroad to buy alcohol and to bring it legally into Sweden as soon as they prove that alcohol was for private use only (Hulot 2010).
Not understanding these features about “the Swedish way” quite sure will create threats, understanding them perfectly will be an opportunity. This is also an essential fact to be understood when using SWOT; threats can be turned to opportunities and vice versa.
The change in global competition is seriously harming the appeal of Italian wines in Sweden. Italy risks to lose its leader position in the Swedish market against the so-called “new world” countries: Australia, Chile, the United States and South Africa (Santini, Cavicchi, Rocchi 2006). They have a strong competitive advantage if compared to Old World countries (Italy, France, Spain), since they are offering wines at a lower price and promote them with appealing and catching images. For instance, in 2008 Italy topped the wine sales list. Just two years later, in 2010, South Africa was ahead of Italy with a market share of 20% (Systembolaget 2012). Among the main consequences that the increasing level of competition arises, we can mention two of them: aggressive pricing and intense battle for table place. The effect of them has been the erosion of the Italian competitive advantage, brand names and quality.
The words “state-owned monopolist company” might cause a bias-based picture of some dreary shops where customers can buy low-quality products. Visiting one of these shops could just as easy wipe off this kind of thoughts. The around 400 shops are well-organised, customer-friendly and the personnel is not only helpful, but has an unusual good knowledge of the products. This is simply part of the marketing policy of Systembolaget. All stores are going to be self-service outlets till the end of 2012. The product range of beer, wine and spirits is one of the most comprehensive in the world. Even in little villages without a store the customers have the possibility to order all products from the entire product range just visiting one of the over 500 hundred local agents (for instance a food shop). Additionally to the product range to be found in the stores there is the possibility to order products from a special product range (available-for-order-range) consisting of around 9000 products. These can be ordered also directly from the importers, but also at the stores, from the agents or via the website of Systembolaget) – but they are delivered and sold to the customer in the Systembolaget-store that the customer has chosen.
In this way the customers get in touch also with the importers. The contact between importers and for instance active wine-affinados is often lively and interactive, because there are lots of fairs for food and wine-interested customers, and the biggest importers have customer-clubs, magazines, different kind of events such as wine-tastings etc., and they also organize travels mostly for wine-lovers (wine-tourism). There are also lots of Swedish wine-clubs to be found on the internet, and these also import wine directly to the customers and organize the same kind of services as the licensed importers, but we have chosen not to research this phenomenon.
When thinking about choosing Sweden as target market for wine export, it is crucial to have a very good knowledge of the special environment that this target market means; the important actors are not only the importers, but just as well Systembolaget and the end consumers.
The inter-acting relationship between the customer and Systembolaget builds part of the framework and the base for the product range that Systembolaget decides to launch. The results of the continual monitoring of the operating environment in order to meet trends & driving forces also create part of this framework and the guidelines. The importers/suppliers have to be very well aware of this framework and how it works in order to be able to offer products that fit into it – but at the same time they should understand how the framework emerges and which is the role of the end consumers in this system. The keywords are inter-acting and being up-dated, which means that a high degree of engagement is necessary on this target market.
In order to make it clear what we mean with this, we want to describe some of the features and the policy of Systembolaget a little bit nearer. In the official documents of the company (Launch plan 2013) consideration, knowledge and inspiration are described as the three core value words of Systembolaget for renewing and developing the product range. These words symbolize a wide field of ideas and ideology that also are essential for the mandate, business concept and vision of Systembolaget. Consideration, for instance, is connected with such values as caring and showing respect, not only for the customers, but the world in which we are living. Thus also environmental aspects and sustainability in wide meaning are important for Systembolaget. Inspiration and knowledge are also values that guarantee a high quality level and customer satisfaction, but just as well keep aware the consciousness of the possible problems with alcohol consume – and in which ways it affects the environment, for instance. It is important to understand that the mentioned core values build the base for all acting for Systembolaget, which can be considered to be a special kind of social enterprise.
Systembolaget distinguishes between driving forces and trends; driving forces are changes taking place in the society in several areas like demography, technical development, climate. These forces also have an influence on trends, which in turn affect the behaviour of consuments. Demographic changes, the change of climate, new technologies and urbanisation together with globalisation are all having a part in emerging trends like new channels & networks, individualisation, awareness of ethics and environment but also the health, and consumers seeking of “the experience” and “the real thing”.
Awareness of these driving forces and new trends is a fundamental cornerstone for the product range of Systembolaget, as it would be for any company or organisation wanting to be succesful. As already mentioned, the importance of the three core values should not be forgotten, which in this case means that the combination of these together with driving forces and new trends create the following guidelines for the product range:
Some other important cornerstones for the product range work are the abilities to offer:
At the same time, meeting the requirements for profitability and efficient management in the chain of logistics and in-store is crucial.
Without going deeper into the comprehensive and vast business policy of Systembolaget and the different aspects of it, we only want to underpin the fact that Systembolaget considers the importers/suppliers as “partners”. Using this word instead of terms like “external/internal customers”, also reveals the importance of interacting and cooperating, being part of an entity operating in a business field where also the consumers are having an active role just as well as many other actors. For instance suppliers of suppliers, normally seen only as a part of supply chain, can in this kind of construction get and take a more active role. For doing this succesfully, it is fundamental to have enough knowledge of this special system.
With a quotation from Gert Carl we want to show how this should be understood : “[…] I will not say that I support the monopoly…but once you are in, you have guaranteed volumes.” (Ilkjaer 2007).
The research demonstrates that the changing global environment has enhanced competition and forced Italian wine industry to change and to adopt new strategic marketing processes. Sweden is a particularly challenging market for small wine companies that want to be successful exporting into that marketplace and thus increase their market share. To achieve these purposes, some strategies need to be undertaken.
The first recommendation of this paper is that an innovative approach to wine production and an open-minded culture have to be promoted in Italy. In the second part of this essay we have stressed the importance of tradition as a strength of Italian wine industry. Nevertheless, tradition could restrain the ability of Italian companies to maintain quality and ensure profitability, whenever it leads to rigidity or structural inertia, as I have showed above. Against this background, flexibility can be only achieved through a process of technological and managerial innovations which should be based on tradition as a strong main feature and encourage constant learning.
The second finding is that Italian wineries should continue to exploit their brand names and autochtone vines. From this point of view, wine companies should work on the interrelation that foreign consumers most appreciate: the one between wines and the values and culture of the region these wines come from. The brand image of local wines should be built on this strategy (Vrontis, Thrassou, Rossi 2011).
Further, synergies and collective action by small wine producers have to be developed in order to grow and achieve cost economies. Also the support of the government and the cooperation with other industries, institutions and associations are recommended. In this context, relationship networks could facilitate collective action and exploit the social capital. All this is crucial since the development of wine industry is beneficial not only to wine producers but to many other stakeholders in the region. An example of such an international network is the project by Unioncamere and Assocamerestero in cooperation with Federazione Italiana Pubblici Servizi and Istituto Nazionale Ricerche Turistiche (ISNART), which took the shape of the so called “Marchio Ospitalità Italiana”. It is a certification to be conferred on Italian restaurants around the world, after a meticulous selection process. In order to be awarded, these restaurants have to accomplish some criteria collected in a specific Technical guideline. The purposes are to enhance the image of Italy, guarantee the high quality standards of Italian hospitality and to achieve Italian productive excellence. This project could be expanded to the wine industry, thereby strengthening the Italian competitive advantage in this sector.
In addition to the already mentioned, the fourth suggestion is considering the sector of wine tourism, and investing on it. Wines and tourism need each other. Wine could help to promote and advertise Italian territories through the creation of tourist thematic itineraries. At the same time, tourism creates new linkages between producers and wine lovers (Asero, Patti 2009).
Further, it is necessary for Italian wine marketers to understand who their competitors are and how the Swedish business environment actually works. As we have already noticed, the retail monopoly is a complex mechanism but nonetheless it is not infeasible to overcome legal regulations. Therefore, considering that a better understanding of this environment can provide them with additional marketing options and directions, Italian wine firms have to invest more in knowledge, awareness and information.
As last observation, we consider that restaurants and hotels mostly look for wines with a prestigious image and good quality. Therefore, Italian exporters can also target the on-trade sector via Swedish importers rather than the retailer Systembolaget. In addition, Italian wine industry should rely on importers with a high quality image, since image can provide support in selling their wine. They could also be prepared to take part in the online sales of wine, which are possible in Sweden, thereby avoiding Systembolaget and strengthening the direct relation between producers and end-consumers.