Business Week Dec. 16, 2002

“…16,000 small, family-owned Italian wineries stretching from Turin to Trapani …are helping themselves to a bigger share of the $150 billion global wine market and wresting dominance from the once-invincible French. The Italians’ strength is especially clear in the huge American market, where wine consumption is growing faster than anywhere else. U.S. sales of pinot grigio have doubled in three years, to six million cases, challenging the primacy of chardonnay. In the 12 months ended June 30, the value of Italian table-wine exports to the U.S. jumped 21%, to $621 million, surpassing France for the first time.

That’s certainly a milestone worth toasting for Italy’s $9 billion wine industry, which has traditionally emphasized quantity at the expense of quality. Italian winemakers are finally reaping the benefits of years of investment, gaining global market share at every price level.

“Italians have spent the last decade reinventing themselves as makers of modern, sophisticated, new-style wines,” says Rich Cartiere, publisher of Calistoga (Calif.)-based Wine Market Report. “We are at the leading edge of a big [export] wave that will hit worldwide markets.”

Leading the charge is the next generation of Italian wine growers. They are adopting new cultivation techniques, blending local grapes with better-known varietals, and tapping the expertise of leading enologists worldwide.

Not even nature can shorten this winning streak. Poor weather, including hailstorms, will reduce the 2002 vintage by about 20%, crimping production of some superpremium wines and forcing prices higher. But Italian wines should continue to make inroads into foreign markets, particularly the U.S., where distributors and restaurants are enthusiastic about their value compared with increasingly expensive California wines. “They have four or five excellent vintages behind them and plenty more in the pipeline,” says Cartiere.

Sensing opportunity, deep-pocketed U.S. producers are muscling in on the Italian wine landscape. Both Robert Mondavi Corp. and Kendall-Jackson Wines Estates Ltd. have acquired vineyards in Tuscany. But don’t expect the Italians to yield easily. The new generation of winemakers has only just begun savoring its success--and it is aiming higher. “France started making wine 200 years ago and arrived at the top. But I don't believe France is the best place for making wine,” says Alessio Planeta…

A growing number of wine lovers are tipping their glasses in agreement.”