Pogo’s Dilemma is the theme of this week’s Wine Economist. Pogo’s Dilemma? It is a reference to Walt Kelly’s famous cartoon where the character Pogo reflects, “We have met the enemy and he is us.” Sometimes life is like that, or at least it seems that way to me for the successful winegrowers in the Prosecco Superiore region.
As last week’s Wine Economist explained, the Conegliano Valdobbiadene Prosecco Superiore DOCG region in north-east Italy is a remarkable success story. The historic home of Prosecco in Italy (and the source of some of the finest wines today), Prosecco Superiore DOCG is in an enviable situation. Nearly every hectare of available vineyard land is planted, yields are pretty much at the maximum, and the wines sell out at attractive prices. There are not many wine regions that can compare.
By the Numbers
Here is the story by the numbers. Prosecco Superiore DOCG had 8,683 bearing hectares of grape vines in 2022, which produced a total of about 103 million bottles of wine and €634 million in revenue for the 2127 producers and growers (including seven cooperatives).
Italy is the top market for Prosecco Superiore DOCG wines, accounting for about 60 percent of sales. The top five export markets are the UK, Germany, Switzerland, Austria, and the United States (Canada is next at #6).
You might be surprised to see the U.S. below Switzerland and Austria on this list. The U.S. sometimes seems to be awash with Prosecco. You see it everywhere on store shelves and restaurant lists. Surely the U.S. drinks more Prosecco than the export numbers suggest?
Prosecco vs Prosecco
Well, yes, Americans are great fans of Prosecco, but only about 3 million bottles of it are Prosecco Superiore DOCG from the Conegliano Valdobbiadene region. The rest is from the much larger Prosecco DOC zone or, like the big-selling Kirkland Signature Prosecco, from the Asolo Prosecco region. These wines can be very good and are generally less expensive. They pretty much dominate the U.S. market with many of the top-selling brands either distributed by U.S. wine companies (think Gallo’s La Marca brand) or sold under their labels. There is a Cupcake Prosecco, for example, a Barefoot Bubbly Prosecco, and now even a Prosecco from NBA star James Harden.
Prosecco DOC is ubiquitous in the U.S. market, but Prosecco Superiore DOCG can be hard to find. You really have to look for it. But the effort is worthwhile. I have organized comparative tastings of different Prosecco wines a couple of times and the Prosecco Superiore DOCG wines always make people smile and ask for more.
Prosecco DOC and DOCG wines are made with the same grape variety, Glera, using the same production techniques. The DOCG zone’s terroirs account for the wine’s distinctive qualities. It maybe isn’t a surprise that consumers who understand the difference between the wines are following the premiumization path toward Prosecco Superiore DOCG. Interestingly, producers told me, as Prosecco Superiore markets mature consumers tend to shift from the Extra Dry style that is so popular with Prosecco DOC wines to Brut and even Extra Brut Prosecco Superiore.
A Good Life (and its Discontents)
Life is good in the Conegliano Valdobbiadene region, but that doesn’t mean there aren’t plans to move ahead. The goal is not so much to sell more wine (yields are maxed out) but to increase margins on the wine and generate new revenue sources through expanded wine tourism offerings. Wine tourism suffers a bit today from limited infrastructure and the nearby presence of Venice. Venice doesn’t give up her tourists once they arrive at the lagoon (day-tripping to the wine country doesn’t really happen), which makes an emphasis on destination wine tourist facilities critical.
Raising margins means raising prices and this is never easy, even for a wine like Prosecco Superiore, which seems undervalued for the quality it delivers. One part of the problem is competition, which tends to discourage price increases. The Prosecco Superiore producers compete with each other in every market, of course, and compete with other Italian sparkling wine producers for the key domestic market. Here in the U.S., sparkling wines from around the world compete with each other for room on wine shelves and space on restaurant wine lists.
The biggest competition for Prosecco Superiore wines here in America and perhaps in other export markets, too, are the generally less expensive Prosecco DOC wines. These wines are popular, heavily promoted by importers, and have consumer-pleasing quality. Prosecco Superiore’s efforts to increase price are limited, in other words, by the good value that Prosecco wines represent. And, of course, most U.S. consumers don’t really get the DOC vs DOCG thing. Prosecco is Prosecco to them.
When is Prosecco Not Prosecco?
This is where Pogo’s Dilemma (we have met the enemy and he is us) comes in. Many producers of Prosecco Superiore DOCG wines are also producers of Prosecco DOC wines (made with grapes from the DOC zone, not the DOCG zone). So, in effect, they are their own biggest competition when it comes to price increases. The better the DOC wines, the harder it is to boost DOCG prices.
The Moretti Polegato family, for example, owns Villa Sandi, a top Prosecco Superiore DOCG producer. Their wine was featured on the by-the-glass list at a top Verona restaurant we visited. But the family also owns La Gioiosa, whose DOC wines are often found on supermarket shelves. The family strategy seems to be to continue to raise the quality of all the wines rather than thinking about one versus the other and seize other opportunities that make sense, too.
For example, you can enjoy a glass of Prosecco at the Villa Sandi wine bar at the Venice airport, or have an excellent meal and perhaps spend the night at Locanda Sandi in Valdobbiadene. The Pogo effect isn’t really a problem in this case.
Smaller producers and those who focus exclusively on DOCG wines must consider different strategies. the family-run Vincenzo Toffoli, for example, produces 250,000 bottles including both Prosecco DOCG and DOC wines from their 20 hectares of vines. Although 95 percent of the wine is sparkling, the family is also exploring the region’s still wine heritage, including sweet passito wines, a delicious dry passito red Colli di Conegliano Refrontolo DOCG, and a ripasso Marzemino Veneto IGT.
The wines of Col Vetoraz are as spectacular as the tasting room view of the steep Valdobbiadene vineyards. Great wine, just don’t call it Prosecco. Prosecco, according to Col Vetoraz and several other producers, has degenerated into a generic term, defined by the big producers on the plains, which doesn’t capture the special quality of their wines. So they’ve banished Prosecco from their labels and literature. The wines they make are Valdobbiadene DOCG. Simple as that.
Refusing the Prosecco name seemed crazy to me at first, but maybe it is a reasonable response to the Pogo effect. If Prosecco is often sweetish and cheap, then maybe a drier luxury wine should have a different name, even if it is one that Americans might be afraid to pronounce. It certainly might work for some producers in their domestic market. Or at least that’s what came to mind when we were shopping for Prosecco Superiore DOCG wines at a big shop in Verona. You can see how the wine display was labeled in the photo.
Sue and I were impressed with the creativity and innovation we encountered during our visit to Conegliano Valdobbiadene Prosecco Superiore DOCG. It is a magical wine from a magical place and the magical people who make it are bound to find solutions to Pogo’s Dilemma.