Anatomy of Italian Wine Industry Success

Economics is sometimes called the “dismal science” and I guess it is true that the Wine Economist is often focused on the problems that the wine industry faces (see the recent column on California vineyard profitability, for example).  So it is a pleasure to write about two wine regions in Italy that have achieved rather remarkable success.

The regions I want to highlight here are Conegliano Valdobbiadene Prosecco Superiore DOCG — home of many of Italy’s best sparkling wines — and Lugana DOC on the shores of Lake Garda, makers of one of Italy’s most distinctive white wines. Although the wines of the two regions are very different, the sources of their success have some things in common. Why are these regions successful? What challenges do they face? Read on.

Wine and Words

Sue and I came to Italy as guests of the Conegliano Valdobbiadene Prosecco Superiore Consorzio to participate in the first edition of a wine literature festival called Co(u)ltura Conegliano Valdobbiadene held in the scenic and historic Castello San Salvatore di Susegana. It was two days of author interviews, masterclasses, walk-around wine tastings, and more that drew a large and appreciative crowd. A highlight was the special recognition of five young Italian writers whose essays on this region were collected and published for the event. (The photo at the top of this column shows a fantastic video-mapping demonstration.)

Sue and I took advantage of this opportunity to meet with winemakers and Consorzio officials and learn as much as we could about this dynamic wine region. When the festival was over, we changed locations to join a small press tour organized by the Lugana and Garda wine consortia. The result was a very revealing set of experiences.

Signature Grape vs Taste of the Place?

I am not sure that anyone has ever thought to directly compare the Lugana DOC and the Conegliano Valdobbiadene Prosecco Superiore DOCG (henceforth Prosecco Superiore DOCG) regions the way we found ourselves doing, but it is an interesting exercise. Although the wines are completely different in terms of sensory and market characteristics, there are still interesting shared qualities that are worth considering.

Each region is best known for wines made from a single grape variety. Glera is the go-to grape in Prosecco Superiore DOCG, producing several variations of sparkling wines as well as traditional still white wines that you can find if you look for them. Lugana DOC is built on the Turbiana (a.k.a. Trebbiano di Lugana) grape variety, which is made in several styles of still white wines and sparkling wines, too.

You might think these wines would be defined by their signature grape varieties, but you would be wrong. These are wines of place. The Lugana DOC wines are different from the many Trebbiano wines you will find in Italy and the particular climate and especially geology of the Lugana region at the south end of Lake Garda has a lot to do with it.

The Prosecco Superiore DOCG wines are distinctive, too. Although you can see the family resemblance in many cases between the Prosecco Superiore DOCG wines and similar wines made from Glera using the same processes from the Prosecco DOC and Asolo DOC zones, to my taste the DOCG wines are often brighter, more alive in the glass. They always make me smile.

The wines of Lugana DOC are distinctive, too, and for a long time, I found it hard to describe them. But a masterclass we attended led by the brilliant Constantino Gabardi has given me the words I need. The Lugana DOC wines are not so much defined by fruit as we often think for white wines, but by salinity and minerality held in tension by acidity. It is a different idea of wine than I am used to and so it is no wonder I find the Lugana wines so fascinating.

In both cases, the land and the grapes interact to create a complicated but fascinating experience. The landscape between the wine towns of Conegliano and Valdobbiadene is varied and stunningly beautiful, which is why, I suppose, it has been designated a UNESCO World Heritage site. Vineyard regions are often pretty, but these vineyards are special — even more spectacular than the Douro Valley. The dramatic landscape terroir is reflected in the wines. Fruitier, they say, in the more rolling hills near Conegliano. More structured on the sharp peaks and valleys near Valdobbiadene.

The area around Lake Garda is beautiful, but it is nothing like the stunning Valdobbiadene landscape. Yet the more subtle variations here matter a lot. The balance and dynamic interaction of Lugana DOC wines stem from the land, in this case, the complicated geology that was left behind as glaciers scraped the landscape eons ago. The soil is very different at lower elevations closer to the lake and the wines reflect this and the balance of salinity and minerality that is so attractive in the glass is the result.

Victims of their own Success?

Both regions have achieved great success and are developing strategies to climb even higher on the wine wall in the future. Having navigated the shifting market tides of the Covid era very well, producers in Prosecco Superiore DOCG find that they have hit a plateau. Virtually every available hectare of potential vineyard land is planted (to Glera for the most part) and yields have been effectively maximized. The challenge is not so much to produce and sell more wine, but to better differentiate the wines in the market to increase margins.

Lugana DOC producers are also victims of their success to a certain extent. The Turbiana grapes that go into Lugana DOC wines sell for several times the value of other grapes in the region, creating a prosperous environment for producers. Lugana is effectively differentiated and benefits from its reputation. The potential problem, I was told, is that just a few export markets dominate sales. What happens, one winemaker asked me, if tomorrow Germans decided they don’t like Lugana wines so much?

The Prosecco Superiore DOCG producers hope to raise margins. The Lugana producers who to expand and diversify their markets. Neither of these tasks is easy in today’s competitive marketplace, but then there was nothing easy about getting to their current high plateau, either. Watch for additional analysis of these two fascinating regions in the weeks to come.

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