Ep. 1769 The Sunshine State Of Wine | wine2wine Business Forum 2023

The Italian wine podcast is the community driven platform for Italian winegeeks around the world. Support the show by donating at italian wine podcast dot com. Donate five or more Euros, and we'll send you a copy of our latest book, my Italian Great Geek journal. Absolutely free. To get your free copy of my Italian GreatGeek journal, click support us at Italian One podcast dot com, or wherever you get your pods. Official media partner, the Italian One podcast is delighted to present a series of interviews and highlights from the twenty twenty three one to one business form, featuring Italian wine producers and bringing together some of the most influential voices in the sector to discuss the hottest topics facing the industry to Don't forget to tune in every Thursday at three pm or visit the Italian wine podcast dot com for more information. Alright. Good morning, everyone. I'm Marilyn Krieger. I'm based in New York City. And I've had the incredible opportunity to support wineries from Italy and around the world in PR and communications. Thank you for joining us today as we talk about the Sunshine State. So it was my pleasure to introduce our esteemed speaker, Aaron Demara. With a career spanning over three decades, Aaron has been in the wine and spirits industry on all sides, the import side, the distribution side, in the restaurant side and covering all major markets in Florida. He is currently in his eighth year at Zonan eighteen twenty one, Fine wine and spirits, and he oversees the entire state. Among his impressive accomplishments, Aaron is a certified Sommelier by the Court of Master Sommelier's certified wine educator by the Society of wine educators and a Vin Italy International Academy Italian wine Ambassador and educator. He is also a contributing author of the Italian wine guide two point zero. Aaron is not only passionate about Italian wine. He is deeply committed to the business of wine. And believe that together through collaboration and the exchange of ideas, we can foster mutual success for all. Erin, we are fortunate to have you here today to share your knowledge and your insights to help us navigate the diverse, the vibrant, the dynamic, and sometimes the old school sunshine state. So without further ado, I will pass the mic to Aaron. It's probably more than I expected, but thank you all for joining us to hear today and full disclosure. We joke in Florida that no one is actually from Florida. But I have lived there for twenty five years and it worked in the, the, with the wine, and spirits trade, for that time. And I think like a lot of people originally, and and certainly the Italians that I work with, they have conceptions about Florida. Many of them are misconceptions because I think a lot of people think about, selling wine in Florida. They're gonna start with Ocean Drive and South Beach. You know, people think about Miami Beach, but don't consider that most of Miami is Latino and Little Havana is as big a part of it as, south beach is where they think of Orlando just being Disney World and Mickey Mouse, but it's also, fine dining and theme parks like Gatorland. They consider going to work the market of Florida starting in Miami going to Key West, but to go the other end of Florida to the, shores of the Panhandle is fifteen hours by car. Probably thirteen if you're Italian driver, but it's a it's a large market and there are important parts of my of Florida besides Miami within the market. I mean, for size, it's about half the size of Italy. It has about a third of the population. The major metropolis of Miami to West Palm Beach in South Florida is over six million people. But what we consider these secondary markets, Naples, to Tampa Bay, is over five million residents, Orlando, and those beaches over two million people. Jacksonville over a million. And that, panhandle which is a major tourist destination for the Southern United States has over a million residents. And so Florida is quite a diverse market. Like I said, it's about a third of the population of Italy or twenty two million people. We had over seven hundred thousand new residents just in the past year. The projections for Florida are to be over thirty million people by twenty thirty. And one quarter of those will be over the age of sixty five. The importance of that I will get to in a minute. But tourism is the number one industry in Florida, over a hundred to a million people and spending over a hundred billion dollars. Interestingly, only in the last year, a hundred and thirty thousand visitors from Italy, that's half of what it was before the COVID pandemic. So, certainly for a consumption of Italian wine in my market, and we like to see those Italians come back. And but why do people move to Florida and visit? We actually have a very, particular tax structure. There are no income taxes for state income. Your home and, vehicles are protected. There is a benefit of being a resident. Obviously, we talk about the the weather in Florida If you like it to be, sunny, hot, humid, it's that, year round, obviously, recreation like beaches, just in my home county. There are more golf courses than there are in the entirety of Italy. There are a lot of things that people enjoy about living in Florida. There was one graphic there that didn't get loaded, but, you know, who are the the floridians live there? One quarter of the population, is Latino, mostly centered around that Miami and Southern Florida market. Florida gets more homogenous more white as you move further north and get into these sub United States, but it's still becoming a more diverse state as it grows every year. And what are Floridians drinking? Well, not the largest consumption per person in, in Florida. Just over two liters per person per year, which if you're in the wine business, it seems kind of low. But, Florida last year, consumed over three hundred million liters of wine as a state, second only to California. That trend seems to be continuing to grow. The trend in wine we know in Europe is mirrored in the United States. It's been down in sales over the last two years, in the last year, in the United States, about seven percent in total wine consumption, but in Florida, it's growing. It's growing among the population that is sixty years and older. The trend in premium wine, which at the retail level, they consider above fifteen US dollars per bottle, is not growing in the US, but it is growing in Florida. And when we talk about wine consumption in the United States, one third of Americans do not drink alcohol. Another third only consume, about one alcohol drink per week. So it's really, the top third of Americans that are doing all of the wine consumption, but that number is still over seventy million people. So it's still a large market, and that's why it's become a target market for, especially for the Italian wine business. And even with all the people that abstains alcohol, or are trending to drink less alcohol, tourism tends to, buck that trend as people travel. And here's a graph from a book, published a few years ago about wine consumption in the US by decile. And you can see that guess our target market is going to be the top third of drinkers. And my wife is a, physician, and I showed her this slide and said, according to this author and his research, ten percent of Americans are consuming ten drinks per day. And she said, well, that might be a good target market to sell your wine, but those people don't live very long. So Florida is going against many of these national trends. And then only do we have a a demographic that is drinking more wine as they retire or as they you know, chase the benefits of the Mediterranean diet, but, they're also retiring earlier and moving to Florida for those residency benefits with money. Our tourism increases every year, especially we've already surpassed the pre COVID numbers. And there's also been a a market increase in the dollar spent in dining out. And I wanna delve into some of those numbers here. And this comes from the National Restaurant Association, Florida has forty seven thousand total restaurants a million people work in that industry. Now that number does include, fast food and and cafes. But that industry was worth sixty nine billion dollars in twenty twenty two. To put that into perspective, The entirety of the restaurant business in Italy was thirty six billion euros in that same year in terms of actual restaurant dining and fine dining before COVID to after in this three year span, four of the six, most increased markets in the United States for eating in restaurants are in Florida, Fort Lauderdale, Miami in the south of Florida, and then Naples and Tampa in that, Gulf Coast. So people that move to Florida are eating in restaurants and drinking wine out more often And that industry, you can see will account for twenty eight billion dollars in sales this year. Florida has the fourth most number of, full service restaurants as they're called in the United States. And four of those cities are in the top ten of dollars spent per household in dining out. So it really is a robust market, and wine certainly goes along with that. Now selling wine in Florida, there are, some hurdles, some some impediments. Florida almost perfected what we consider the three tier system. So direct to consumer is very difficult there. You must go through an importer who goes through a distributor who then sells to, license account, and those restaurants can have varying types of licenses. Some only sell beer and wine. Some sell beer wine and spirits. Florida has the highest tax rate for wine over fifty cents per liter for still wines and almost a dollar per liter for sparkling wine. So if you're doing business in multiple markets, you have to adjust your prices for things like Perseco and and other sparkling wines. And Florida suffered the highest rate of inflation increase. And so dining out has cost a lot more, as the supply chain increases. And that was kind of mirrored in the number of dollars spent in, in restaurants in these past years. But, it's quite a robust market. This is information that was shared with me from, our national distributor. My company works with a with the second largest distributor of wine and spirits in most of the markets of the US. And visit their top fifteen accounts on premise for wine. It's by dollars. So, obviously, the Apex goal for any wine supplier would be to do business with these accounts, hotel chains, large national restaurant chains. You know, they, like, you know, if you can get a wine into one of these accounts, you feel like, you know, your business is solved. But the reality is that most of the wine business as seen in this pie here has done in independent bars and restaurants in Florida. Only twenty percent of the wines sold, into chain restaurants. And then the other part of that pie there are considered luxury chains or luxury hotels. So the beginning must be doing your business in the independent restaurants. It's the easiest hurdle. It just requires the most leg work. In terms of retail business in Florida, most of it is dominated by chain business, by large groups of grocers, or retail buying groups. And while there are a number of independent there in the red, what my distributor considers the fine wine retail stores only account for about two percent of total sales. How does this play out for us? Well, doing business in the independent restaurants, which is always the first start, will then influence the buyers for those chain restaurants. They will not buy a wine until they see it already has some popularity in their region. And And then if the chain restaurants will add your wine, which puts you in in multiple locations, only then will the in will the chain retailers that large buying groups of retailers consider a wine. They don't build brands. They only sell what is already popular. But there are opportunities. There are ten thousand full service restaurants. So restaurants you would consider to have wine lists in Florida. Only a quarter of those are a chain business. And, I'll remind you that, I am making these, this presentation available, after wine to wine. And so, these numbers are not necessarily proprietary, but happy to share them with you. Where are, Florutyens then drinking these wines? Well, there are over two thousand Italian registered restaurants in Florida. I'm sure none of them make pasta as good as your mama, so I don't need no way to bother. But like Italy, Florida is full of seafood restaurants. Over twenty five hundred of them, it's a peninsula surrounded by water seafood is a part of the, the dining culture there. And over a thousand registered steak restaurants, I can think of another country that's quite famous for. It's Vasteca. Americans having these experiences or looking for connections to Italy and two of these Italian wines. Florida is a growing market for fine wine. The Michelin review has finally come to Florida. Nineteen restaurants have received at least one star, and the wine spectator has awarded two hundred and seventy one restaurants now with the awards for their wine lists, including one one of the, original grand award winners that is the world's largest wine list at, Burns Steakhouse in the in the town of Tampa. It's where something that's been around for sixty years. But it's a become a worldwide destination, you know, in that little town. In terms of independent retail and the opportunities there, yes, there are over two thousand, liquor and wine stores, but talking with my distributor, they would consider three hundred of those to be fine wine shops. Still, you know, quite a large number and and, you know, quite diverse. And then who is going to sell your wine, in Florida? Probably the most important part of, of importing and distributing wine, finding the right partnership there are fifty full service wine and spirit distributors in Florida that include five of the top ten largest nationwide registered within the state because it's a state that has a lot of, sea ports, almost five hundred beverage distributors and I actually got this number from the Tax and Trade Bureau of the United States over two thousand registered, importers of alcoholic beverages in Florida. Obviously, some of those are going to be very small. You wanna make sure that if you're partnering with an importer may might also be a distributor that they have, the the sales capacity, you know, to handle your wine needs. This is retail data. These numbers are very small, kinda looking at the top thirty four wines in what they call the Nielsen reports. These are for the wines that are reported by retailers that the wine must scan at a register. So this is really for grocery and big box scores. Of these top thirty four thirty three of them are white or sparkling or sweet or a combination of those three. It's not until the thirty fourth wine that you get. A a a large producer of multiple gianna. La Marca Persecco is the number one selling wine at retail in Florida, followed by Santa Marguerio. What you see there is some of these wines are up, some of these wines are down. This is, over the course of the last fifty two weeks, so one year of sales. But almost all of them have shown an increase in what they're selling for at retail. So Floridians are willing to pay more for the wines that they already know. The opportunity becomes and this is a different look at the same data but divided by region of Italy. You may see a lot of red numbers here that show that the sales for these different regions are down, but that's only at grocery and, and large retail chains in Florida. I think what's interesting here is that almost all of the retail price numbers, have increased. So, again, we're paying more for the for these wines. And the final column there, anything in red means that it's under indexed. I mean, that means a region that doesn't have the shelf presence that it should for how popular the wine is from that area. So there's a lot of opportunity you can see because anything in green, they call over index, meaning that it has more, items on the shelf than it needs. So Italy is still undervalued and underrepresented, in a lot of Florida. And, to to delve deeper into that idea, I did a number of interviews across the Italian wine business in Florida. And this is what, many people in in multiple parts of the industry have told me, you know, for example, there's a chain of higher end Italian grocers in South Florida. Their Italian wine sales are up. You could see eight percent versus a total trend down seven. And while you're going to see here that a lot of the most popular regions still dominate their sales, like Tuscany, like prossecco, white wine sales have been up over the last year, including, varietals that are not the mainstream, grapes, you know, Vermentino, Fallanghina from this particular chain of, of stores, adding new wines from Sicily, which you'll see will be a bit of a theme here. And, that their customers are willing to pay more to try new wines, than they have previously. Fifteen dollars in retail in the United States is considered the premium category, and there are categories above that. But it's certainly, not the lowest denominator wines from a statewide importer distributor of Italian wines. Their sales were up twenty five percent last year. Typical wines of Pinabrillo, Persecco, Keandee still dominate. But as you go north into Florida and you get into the Southern United States, sweet wines tend to be much more popular. In this case, Sanguita Judah and, sweeter Perseccos. And certainly another distributor noticing an uptick, an increase in wines like Guudilo and Vermentino, within their portfolio And even though, they noted that they had decreased sales in wines like Pecarino and multiple channel, it was because anecdotally, I was told other larger importers have picked up those wines and maybe taken some of that business. Coming back to America, Van Italy International Academy, the ultimate Italian wine qualification will be held in New York City from four to six March twenty twenty four. Have you got what it takes to become the next Italian wine ambassador? Find out at benitezly dot com. From the buyer for a large Italian wine group, based in Florida with about a dozen locations. Again, this is the first year he said that Italy has outsold California in dollars on his wine lists. And, well, again, pinot grigio and and and the quixante's tend to be strong. He's seeing great success with wines either from the coast or wines from the south near Adabala, Vermontino. And also, he note there wines that have a flavor profile that can be transition wines for, American palettes. Wines like Aleianico, fiano, for, the large white triggers, Narodavala is another good example. And lastly, the buyer at a large five star hotel, again, mirroring some of the same, things that we talked about, but, you know, wanting to to make a point that, again, transition wines for American palettes were very important and that, if he replaced, say, a second or third pinot grigio with something more interesting like a Cetticante, he'd see sales for that, that wine increase. And so Americans want to know these wines. The first restaurateur I ever worked for said that they're not willing to go and learn about them, but we can make them available and and teach them and show them how diverse and how great, you know, Italian wine is. And certainly in the last couple years, we have seen this, influence of television travel. I think you probably know what I'm gonna show here. I experienced firsthand with my family, the Stanley Tucci effect last summer, that, places he had visited and and shown on American television had become very popular with American tourists that were traveling to Italy. You know, reservations for restaurants were impossible to find wines that he had tasted were already sold out. And, I think we all know what happened in, Sicily this past year, even Tarmina Gourmet, had to change the date of that festival by two weeks because there was a a dearth of hotel rooms. I think I stopped counting at about fifty. The number of people who use spritz as part of their handle on Instagram. So these the Italian spritz has become aspirational as a drink. The idea of Sicily has and and the southern coast of Sis of, Italy have become aspirational for Americans even if they can't travel there themselves, but they are definitely traveling there. This comes from Allianz, the travel insurance company that for the first time among the top destinations in Europe for American travelers, booking airfare, Milan has joined Rome on that list of top ten cities. And by their numbers, You can see here that American travel is up fifty percent or more than fifty percent over last year. And following COVID was up six hundred percent the previous year. In terms of dollars, you can see there before the pandemic, over six million Americans spending six billion euros traveling to Italy just in the third quarter. So, July, August, September of last year, four and a half million Americans went to Italy and spent over two billion euros. So they are going. And it is the number one destination now. This is anecdotal evidence, but a friend of mine is a travel agent. And she says for a particular type of floridian, meaning, they're still young, forties or fifties. Their children have gone off to college or moved out, and now they are free to travel throughout the year. Their high net worth generally. Italy is the number one, destination, over France even two to one. But they can they consider it, you know, a a a aspirational destination, a romantic destination, and they want to experience Italy when they come back. So where are the opportunities to, to sell wine to them? And, we've seen kind of where, the Florians are eating and drinking. Yeah. Certainly, there are thousands of restaurants and hundreds of of independent retailers in Florida. We have one of the states that's growing the fastest in population. And not only that, they're not just moving to one part, of Florida. Also, as I showed, the, the demographic of Florida is getting older. Yes. But it it's people that are fifty years of age and up that are the increasing wine consumers. Professor, shen shenza alluded to it in the previous talk that the wine industry had not done a great job of communicating and increasing wine sales among the youngest generations. And that is a concern and to talk for, you know, someone else's, you know, half an hour or two hours. But certainly, the opportunity for the next ten years in Florida is still increasing quite dramatically. Do you become successful? Other people more experienced than I have already spoken about this. You need to bring the right products at the right price, to the market. But it's no longer, is no longer a a a thin market of just a handful of of wines that Americans and Floridians will drink. Probably the most important thing is finding the right importer and the right distributor partners. I wish I had time today to delve into you know, where to, to look for those partners. But, they are available and, you know, word-of-mouth goes a long way in finding the the right people to represent your wines. And if you do your legwork on your end by creating information that's available, to these people, you can create ambassadors, for your brands, and Florida is, is a great market for it. And we've always said working with Italian wines that your story is the most important thing. That people want to hear your story. They want to learn about, your wine, your town, your family, your region. Often they want to go there, which is great that we're able to travel again. But certainly, it's a connection that, I think is unique, for Italian wines that they can make with Americans. And if you really wanna know more about, you know, the the all the nuts and bolts of, the important things about, you know, getting into the US market, I mean, this book is for sale. Steve Ray is great. He's been in the business for a long time and has written this how to get US market ready. It's, it's something I've read through already having been in the wine business. So what do I hope that we can take away from, a talk like this today? Well, want this to be practical. You want this to be, you know, something where you can do successful business in Florida. And if you have the right wine, and there are many opportunities, price points now are becoming much more flexible. People are willing to pay more. It may are drinking, less wine in in in America, but often they're paying more, to drink better wine. And then finding great representation. Oh, it's always key, but you've seen there there are multiple channels of opportunity in in Florida. You know, this talk did not give me time to to go down to the, you know, the account level base, but, there are buyers large and small out there that are looking for, new wines, unique wines. And certainly, Florida has, what we call five important markets, you know, in in over twenty million people as consumers, given all that, you know, it is possible to with time and effort. And, you know, originally some money spent to to get a real good return on, the investment you make in the Florida market. I've seen it for, the twenty five years that I've lived there. And, one last note about investing in Florida or or where to find the funds for that. This is just a quick snapshot of some of the events that I've done for my company over the last two years, with the OCM fund. I hope that everyone that works in the Italian business is familiar with the fund. There are hundreds of of opportunities, to use some of these funds for marketing, but I've seen great success and other companies doing as well. Using the fund in a different way, more down to the consumer level. It takes, some leg work. It takes representation, in Florida to be successful with this. It takes some advanced planning. And I know that this fund these funds are not available at the the small winery individual winery level, but it's a great way to to market your wines to show your wines to the end user. Either to to work through the buyer of a restaurant or retail shop to promote, a tasting and and make sure that the wines are ultimately getting into the the the glass and the mouth of the consumer. Because we all know that if we make good wine, that everyone that tastes it is going to enjoy it, but how do you get around and through, the gatekeepers, if you will, as, as you heard, you know, the Tucson Hayes talking here, as long as the wine's delicious, they're going to give it a chance within within their accounts. And I think that, most buyers in Florida would mirror the same thing. Again, the OCM fund is probably a two hour discussion at a minimum. But it's a reminder that there are many ways to, to improve your chances of doing good business in Florida. And with that, I wanna thank you all for the time, the attention, the opportunity to speak to everyone. And certainly, if you have any questions, comments, feel free to write to me to, I don't post much on Instagram. Although, my company and my, my wife are pushing me to do to do more of that, and I've been inspired by, by many of you. Thank you, everybody. We're at time. Thank you so much. Listen to the Italian wine podcast, wherever you get your podcasts, we're on SoundCloud, Apple Podcasts, Spotify, email, IFM, and more. Don't forget to subscribe and rate the show. If you enjoy listening, please consider donating through Italianline podcast dot com. Any amount helps cover equipment, production, and publication costs. Until next time, Cheaching.