Dr IlariaIppoliti is the export manager of Pasqua, a producer from Verona for over three generations.

Family owned and operated, the company has focused on improving the reputation of Soave and Valpolicella in the export market. The global wine industry faces numerous challenges today. Climate change and its potential effects on our wines are part of multiple environmental concerns that we take seriously. More immediate are the challenges raised by increased competition on the one hand and the consolidation of distributors and importers, in particular in the United States, on the other. The increased power of retail chains and the sometimes quickly shifting patterns of demand are also a concern - as is the increasing strength of the anti-alcohol lobby in some countries. For our business, the strong euro, diminishing consumer buying power and how clients react to the inevitable price increases for Italian wines will be at the centre of our concerns this year. As we and most of our main competitors lack economies of scales, take individualistic approaches to export markets and cannot rely on a generic promotional programme for Italian wines, we must be proactive. Fortunately, we are a family owned company with a long tradition, a state-of-the-art winery and the ability to deliver quality at almost any price point. That said, we must remain innovative with both products, in collaboration with research centres at various universities, and packaging (e.g. PET), and invest heavily in marketing and communications and find synergies with international wine companies on export markets. Remaining profitable in this environment, while integrating the third generation into the management of our company, are our chief goals.

Daniel Pi is the winemaker at Trapiche, the brand that put Argentina on the international wine map. In particular, he has ratcheted up the brands reputation for value for money to a new level. At Trapiche, we do not think that 2008 will bring any significant changes to the trends of the global wine industry. The problems of the growth or lack thereof - in the American economy is something that could well affect consumption of high priced wines, but the general trends will continue. Some markets, which are already mature, may show less growth, but others, like Latin America, China, Korea and Canada show real growth opportunities, at least for our wines. In this context, the Argentina wine industry needs to provide more diversity to its offer. Today, Malbec is leading the export charge with 29% of total sales, which are now at $650m. In the last five years we have been growing at a rate of 25% per year. In 2008 we are facing not only rising inflation, but also a further appreciation of the peso against dollar, so the favourable exchange rates will no longer work to our advantage. In this environment, we must work to improve the consumer perception of our wines, both domestically and off-shore.

Global warming a threat to wine industry

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Researchers working with computer models warn that global warming could have a severe impact on California's $3.2 billion wine industry before the end of the century. According to a story published in Proceedings of the National Academy of Sciences, the study warns that the average temperature in California could rise by as much as 10[degrees]F if the world does not dramatically cut its dependence on fossil fuels. The study plotted two computer models, one in which the industrial world maintained its current reliance on coal, oil and gas and a second in which there was massive investment in new technology and alternative energy sources. Under the bestcase scenario, there could still be a temperature increase of up to 6[degrees]F. There would also be significantly longer summer heat waves, no matter which path is taken. In either case, there could be an almost 90% reduction of the Sierra snow pack, from which the state gets much of its irrigation water. The higher temperatures would cause obvious problems for coastal winegrape growers, and probably make any sort of viticulture in the Central Valley virtually impossible. The study emphasized that the California dairy industry and the wine industry are especially vulnerable to an increase in temperature. It forecast that the average temperature in coastal cities would be similar to that now experienced inland, and that inland areas would experience "Death Valley-like" temperatures. "We are already in a situation where we have seen some warming and we have seen some impacts," said lead author Christopher Field, director of the Carnegie Institution's Department of Global Ecology in Stanford, Calif. Field added that even though California has taken stronger action than other states to reduce emissions, "it cannot save itself. California has something like 2% of the world's total global greenhouse emissions. Even if California were to aggressively adopt emissions controls, global climate wouldn't respond to that directly." Field said that California could inspire the rest of the U.S. and the world. The situation for winegrowers in Europe doesn't appear any brighter. At the 32nd World Geology Conference in Florence, Italy, Gregory Jones of Southern Oregon University warned that global warming could have a dramatic impact on Europe's classic wine regions within a few decades. "We estimate that within 50 years, temperatures in the region of Chianti, where summers are already very hot, will rise by an average of 2[degrees] Celsius (3.6[degrees]F)," Jones said, according to a report in Agence France Presse. He said that vineyards in Bordeaux and Chianti may come to resemble those in northern Africa, and the ideal growing environments that made them prosper could shift northward. "The ideal climatic conditions for producing what we today call Chianti will be in Germany, just as those for producing Champagne or Bordeaux wines will be found in southern England," Jones predicted. (If you have experienced what you believe to be examples of global warming in your vineyards, Wines & Vines would like to hear about it. Please e-mail Larry Walker at:winewalker@aol.com. In an upcoming issue, Wines

&Vines will publish a detailed report on global warming and its impact on the wine industry by Jamie Goode, a London-based journalist who has a Ph.D in plant biology.) COPYRIGHT 2004 Wines & Vines

Challenges and opportunities for the wine industry

JUNE 30, 2010 BY WINESUR | IN BUSINESS, NEWS

The world of wine economists met in Davis, from June 25th to June 28th, at the 4th Annual Conference of the American Association of Wine Economists. With the aim of sharing researches, views and prospects about consumer trends, markets, distribution and strategies, several businessmen and economists from all over the world met this important event. Mendoza was also present through readel Vino.
Some 200 people met at this annual event, which presented the new challenges and opportunities for the wine industry. Wine executives, academics and entrepreneurs were at Davis for an update on consumer, production and distribution situation. As an introduction, the conference opened with a seminar entitled Outlook and Issues for the World Wine Market. For more than four hours, experts shared their knowledge and experience with a great audience. The conference was chaired by Robert Smiley, Professor Emeritus and former Dean of the UC Davis Graduate School of Management. The main subjects were the post crisis situation in developed countries, the opportunities in Asia, the Australian case in the US market and the new consumers and demands. In an interactive and dynamic conference, speakers offered their view and answered questions from the audience. Dealing with emerging markets, Daniel Sumner highlighted the great opportunity for wineries in China, Russia and India. As Director of the Agricultural Issues Center and Professor at UC Davis, he explained that the population and economic growth in these countries determines their high attractiveness to the wine industry. Additionally, he mentioned that the age pyramid is interesting as it defines big focus groups. When asked about the real interest for wineries in the short term, Sumner answered that a big portion of something big is always big.

James Lapsley, Adjunct Associate Professor in the Department of Viticulture and Enology of UC Davis and former president and winemaker for Orleans Hill Winery, spoke about issues and prospects for California wine. He worked over consumer projections for 2030, establishing at 407 million cases the expected volume of sales. Out of this volume he estimated that most of consumers will be hispans and that the number of abstainers will reduce in future years, reaching international level. Wineries situation was also analyzed and the fruit source and distribution appear as main issues. In 10 years American wineries have doubled in number as domestic and foreign demands grow, but cultivated yields have not grown at this rate. According to James, there will be a need for 500,000 more tons of grapes in the next years. The Australian case was presented by Kym Anderson, Professor of Economics and Director of Wine Economics Research Center from University of Adelaide. He explained the main problems faced by Australian wineries, with falling sales in all major markets. He shared his ideas of new markets and new marketing as the main tools to recover from the crisis. For new markets he meant the Asian countries and concerning the new marketing needed to address consumers, he pointed out the Wine Australia s marketing campaigns, which were designed to reconquer consumers basically in USA and UK. Anderson gave special importance to the bulk wine business as one that needs analysis but can definitely be of interest for many wineries that cannot work for Premium wines. In the case of Argentina, Javier Merino and JimenaEstrella, General Manager and Content Manager of readel Vino respectively, spoke about the competitiveness of small companies in the Argentinian wine industry. They pointed out that Argentina s wine industry has experienced great transformation in the last decade mainly driven by exportation. Moreover, Merino and Estrella explained that the creation of new wineries and brands has been very fast, encouraged by a growing external market but threatened by local crisis and vulnerability of small young companies. According to the speakers, this phenomenon, which is widespread among New World producing countries, needs to be addressed to ensure a long and profitable performance for the industry. Finally, Merino and Estrella highlighted that the two key factors to work over are definitely availability of working capital and market focus. At the end, the conferences were commented by two special guests: Jon Moramarco and Tom Selfridge. Former CEO of Constellations, Moramarco defined three different businesses a winery can be in: commodities, mainstream and quality wines. The ability of the winery to define these and to work consciously in creating those markets is the key for success, according to Moramarco. Besides, bulk wine offers some interesting advantages for both consumers and wineries. First, it reduced the carbon footprint as wine is transported in without bottles and thus reducing the weight of transportation. Second, it allows better quality controls and wines are bottled and labeled close to the consumer. Third, glass can be recycled in the destiny market much easier. Finally, this business offers a quick answer for retailers, as the wine is always closer to the markets. Moramarco concluded that the bulk business is a very interesting one that should be operated under special rules. To conclude the seminar, Tom Selfridge explained that one should be optimistic but careful. Former president of The Hess Collection Winery and Chalone Wine Group, he explained that emerging markets are great opportunities but need a detailed plan to work over it. He emphasized the new consumers as the great opportunity for wineries: This generation, the millennial, are 72 million people and each year 4 million is turning 21 and becoming a core drinker almost immediately. They are willing to expend some 20 dollars for a wine and are interested in learning about it. The conference was a complete success and will be repeated next year in Bolzano, Italy.