Italian market of organic wine: A survey on production system characteristics and marketing strategies

Abstract

The overall objective of this study is related to the international debate on organic food, to its authenticity assurance and to the policies adjustment according to trends emerging both in production and in consumption terms.
Indeed, recent years have witnessed a growing interest in alternative certification and distribution strategies of quality products. While certainly third-party certification (regulated in the European context by EC Regulation 834/2007 - 28 June 2007) represents a useful tool for consumers in providing guarantees regarding production processes and food quality, it is less accessible to small-scale producers and lower income consumers worldwide. In addition, whereas organic certification programs have contributed to the global expansion of the organic foods market, an increasing number of consumers are discontented with the globalization of organic food provision. Consequently, the adoption of alternative quality assurance systems has become an important issue for both producers and consumers.
Currently, there are two main alternatives to third-party certification, the Internal Control Systems (ICS) and the Participatory Guarantee Systems (PGS). In Italy, several Alternative Food Networks (AFNs) are starting implementing PGS models. In particular, CampiAperti association represents one of the best-organized networks of producers and co-producers embedding PGS principles. The Italian experience offers the chance to claim for a widespread remark on the need for policy adjustments supporting the different productive practices as well as the several experiences of small processors, as also advocated by Genuino Clandestino movement.
In Italy, policymakers have started discussing what actions are to be taken in order to protect family farmers and their production paradigms. For example, Regulation n.19/2014 of Emilia- Romagna Region recognizes and defends the application of solidarity economy experiences. This regulation enhances the importance of peasant agriculture and its practices and it also recognizes the participatory guarantee as a model that ensures environmental and social sustainability, animal welfare and workers’ rights alike.
The present contribution is based on the analysis of Italian AFNs adopting PGS and on their potential influencing policymakers according to their experiences and needs.

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Wine Economics and Policy 3 (2014) 71–80
Italian market of organic wine: A survey on production system
characteristics and marketing strategies
Alessandra Castellini
a,
n
, Christine Mauracher
b
, Isabella Procidano
b
, Giovanna Sacchi
b
a
Dept. of Agricultural Sciences, Alma Mater Studiorum University of Bologna, viale G. Fanin 50, 40127 Bologna, Italy
b
Dept. of Management, Ca' Foscari University of Venice, Cannaregio 873, 30121 Venice, Italy
Received 5 August 2014; received in revised form 1 December 2014; accepted 3 December 2014
Available online 12 December 2014
Keywords: Italy; Organic wineries; Marketing strategies
1. Introduction
Wine is commonly recognized as a particular type of
processed agrifood product, showing several different char-
acteristics. Above all a close relationship seems to exist
between wine and land of origin, the environment and the
ecosystem in general (including not only natural aspects but
also human skills, tradition, etc.) based on a complex web of
interrelation between all the involved elements/operators.
Since 70s the interest on “clean wine-growing”has been
increasing among the operators; this fact has also caused the
development and the improving of organic processes for wine
production (Iordachescu et al., 2009). Consumers recognize
the close connection between this product and the environment
(Thach and Matz, 2008) and they like to know that the
wineries adopt green and clean practices to sustain the
environment and support natural habitats and wildlife.
Since 2000 organic regulations of several non-EU countries
(Australia, Canada, New Zealand, USA, etc.) started to include
specific standards for organic wine making (IFOAM, 2012). In
Europe for long time the legislation framework on the organic
wine regulations has been incomplete and inefficient: EC Reg.
2092/91
1
and afterwards EC Reg. 834/2007
2
were extremely
generic and through these regulations it has been only possible
to certify as “organic”the raw material (grapes from an
organically growing technique) and not the whole wine-
making process. In 2012 the European Commission approved
Regulation (EU) no. 203 which allows the use of the term
“organic wine”for those products complying with specific
requirements and standards and with Organic Certification
(released by an external figure). Before Reg. 203/2012 entering
into force, it was only possible to use the wording “wine made
from organic grapes”. Currently, for organic wine it is meant a
product obtained from organic raw materials that (i) uses
products and (if available) substances authorized in Annex
VIIIa of Reg. 203/2012, obtained as well from organic raw
materials and (ii) is subject to processes and enological
treatments provided in Reg. 203. Even before this regulation,
in the wine sector many stakeholders had shown a growing
interest for organic production. In Italy, and in many other
countries, in recent decades a movement of producers has
grown, who have started referring to their wines as “natural”,
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n
Corresponding author. Tel.: þ39 051 2096129; fax: þ39 051 2096105.
E-mail addresses: alessandra.castellini@unibo.it (A. Castellini),
christine.mauracher@unive.it (C. Mauracher),
isabella.procidano@unive.it (I. Procidano),
giovanna.sacchi@unive.it (G. Sacchi).
Peer review under responsibility of Wine Economics and Policy.
1
Council Regulation (EEC) no. 2092/91 of 24 June 1991 on organic
production of agricultural products and indications referring thereto on
agricultural products and foodstuffs.
2
Council Regulation (EC) no. 834/2007 of 28 June 2007 on organic
production and labeling of organic products and repealing Regulation (EEC)
no. 2092/91. It is interesting the point 19 “(whereas…) Organic processed
products should be produced by the use of processing methods which
guarantee that the organic integrity and vital qualities of the product are
maintained through all stages of the production chain”but this proposal has not
been further specified for the wine sector.

and to rely on official certification model and Origin Based
Labels (PDO and PGI).
In recent years European Union has established equivalence
arrangements with 11 non-EU countries—Argentina, Austra-
lia, Canada, Costa Rica, India, Israel, Japan, Switzerland,
Tunisia, USA and New Zealand
3
—for the import–export of
organic products. With regard to the organic wine sector,
regulations of USA and New Zealand have been recognized as
equivalent to the European one but only a small number of
certification bodies are accepted.
4
Most third-country organic
wines have, indeed, to be imported through import authoriza-
tions issued by EU member states. Considering for instance the
equivalence arrangement established between EU and US,
5
Organic Certification from EU Reg. 203/2012 is totally
accepted from the US market without any kind of further
document needed: this is very important for the organic wine
export because US consumers appear really interested in
organic wine purchase (Vastola and Tanyeri-Abur, 2009;
http://www.winemonitor.it, last access in October 2014).
The wine sector interest in the environmental sustainability
is also stimulated by the increasing consumers “green attitude”
in their purchasing behavior; the environment-friendly char-
acteristic of a product has become a significant marketing tool
useful for the differentiation on the market. It must be noted
that “only”environment-friendly wine cannot be sold as
organic: they are two different beverages.
According to FiBL-IFOAM data, in 2010, worldwide
surfaces cultivated with organic vineyards exceeded
217,600 ha, almost doubled since 2006; more of 88% located
in Europe (192,671 ha; þ51% since 2006). During the period
of 2006–2010 North and Latin America registered interesting
upward trends: þ25% and þ23% respectively. Also in other
countries, like New Zealand, the organic wine movement is
increasing. The NZ organic wine producers declared that in
2020 the 20% of vineyards in their country will be organic, an
increase of around 15% considering that in 2011 this surface
represented the 4.5% of total vineyard area. Argentina is the
country in which organic viticulture is most spread in the
world (4048 ha; 2010). In EU, Italy France and Spain,
traditionally wine producers, since 2000 have registered a
steadily increase of the organically wine-growing surfaces,
despite the lack of a clear legal situation. Nevertheless, at a
worldwide level the organically wine-growing sector still
represents a small quota of the total wine context. As far as
this fact is concerned it could be interesting to remember what
Willer has emphasized in 2008 (Willer, 2008): “the share of
the organic/in-conversion grape area, however, tends to be
lower than that of organic farming general because of the
production based problems, the direct payments are not high
enough and the competition from Southern countries to the
Northern producers. There are signs of a strongly growing
market for organic wine in many countries, triggered by a
generally growing interest in organic products and growing
demand (particularly in Europe and North America)”.National
Rural Network 2007–2013 (2012) data show that, in 2010,
Italy was the second EU member in terms of organic
viticulture surface after Spain, with more than 50,000 ha and
628 certified wineries processing organic grapes. More recent
data from Italian Confederations of Farmers (CIA) show that,
in 2012, the Italian organically cultivated vineyards overpassed
52 thousands of hectares, more than 96% of these producing
grapes for wine processing. The leading regions are Sicily
(þ65.5% from 2009), Apulia ( þ12% from 2009) and
Tuscany (þ12.4% from 2009).
2. Background and aims
This paper aims to analyze the main characteristics of Italian
organic wine sector before the enforcement of regulation 203/
2012, taking into account also biodynamic and similar
productions. In particular the study focuses on marketing
practices adopted by wineries both in promotional and in
strategic terms. Based on the results obtained by the survey,
the potential of European certified organic and biodynamic
wine on the Italian market can be defined.
To the best of our knowledge, the literature related to the
exploration of the organic wine sector is up to now scarce.
Some authors emphasize a lack of materials and of data (Stolz
and Schmidt, 2008;Willer, 2008;Remaud et al., 2008) from
different points of view: production, surfaces, yields, distribu-
tion channels, consumer expectations and marketing strategies.
Before 2012 when an appropriate regulation was still missing,
the lack of clarity along the production chain has strengthened
the purchaser's uncertainty about the product (Vastola and
Tanyeri-Abur, 2009). An important outcome of the ORWINE
project (see next in text) was the Recommendation for EU
Rules on organic wine comprehending proposals and advices
for the elaboration of rules for organic wine production and
labeling in EU Regulation. Currently, the large part of
scientific studies focuses on wine “from organically growing
grapes”, without a complete certification of the process
because of the extremely recent EC Reg. 203/2013. Further-
more in several research works organic wine is often included
in a wider class of environment-friendly products like biody-
namic, “natural”,“true”and other bio-soundings (http://www.
teatronaturale.it, last access 2013-05-14) or non-conventional
wines (Vastola and Tanyeri-Abur, 2009).
An important work on organic wine sector is the collection
of studies originated from the European project named
ORWINE (http://www.orwine.com), which surveyed many
different aspects of the sector, concerning technological,
economic and sensory analysis issues.
There are two main fields of study in the economic literature
on organic wine.
(a) Surveys about wine system, mainly addressed to get a
clear picture of the sector dimensions for small contexts
(Crescimanno et al., 2002;Rossetto, 2002;Brugarolas et al.,
2009) or for bigger ones, but in this case sometimes it is
3
See Annex III of Reg. (EC) no. 1235/2008.
4
See Annex IV of Reg. (EC) no. 1235/2008.
5
That means that as long as the terms of the arrangement are met, organic
operations certified to the USDA organic or EU organic standards may be
labeled and sold as organic in both countries (http://www.ams.usda.gov, last
access 2013/11/30).
A. Castellini et al. / Wine Economics and Policy 3 (2014) 71–8072

possible to register some lack of accuracy or precision in the
data (Jonis et al., 2008 and others from 16th IFOAM Orwine
Congress). Some interesting studies allow defining the state of
the organic wine sector (Jonis et al., 2008 and others from 16th
IFOAM Orwine Congress). According to Micheloni and Trioli
(2008) at European level, the organic wine-makers present
medium-scale activities: only 8% of wine farms produce more
than 1500 hl (nearly 200,000 bottles) while 42% register a
production level around 300 hl/y (40,000 bottles). The
biggest wine farms are located in France and in Italy, where
this kind of production is a traditional heritage. As far as the
marketing strategies (especially distribution and price choices)
are concerned, in Veneto region small wine growers appear to
prefer a wine quality strategy and sell their product through
traditional retailing. On the other hand, large-scale wineries
pay attention to price and product variety and prefer foreign or
domestic supermarket chains or direct selling to final con-
sumers (Rossetto, 2002). Studies related to the analysis of farm
profitability (Corsi and Strøm, 2013) enhanced that organic
qualitative characteristic seems to influence the components of
wine price, like a sort of premium price obtained not only
adding a plus value to the price but also acting on the price
components; therefore organic wine final price appears higher
than the conventional one. A general framework of organic
wine market (structures, operators, dimension of the sector,
trend of the organic wine market and consumption aspects)
derives also from the ORWINE project (particularly Stolz and
Schmidt, 2008). This project emphasizes that four main
obstacles appear to constrain this sector: low consumer knowl-
edge about organic wines and production, lack of marketing
strategies, strong competition deriving from the conventional
products and the high price of organic wine.
(b) Surveys on organic wine consumer aimed to define his
purchasing behavior (including choice decision elements) and
needs. According to recent research, organic characteristics do not
generally influence consumers' preferences, even in countries
whereorganicfoodislargelycommoninthemarket(e.g.
Switzerland in Mann et al. (2012)). The most important factors
determining consumer choice are the country of origin, the blend
of grapes and the price (as in the case of the conventional wine
market). In particular, price is a fundamental benchmark for
consumers because it is considered strictly linked to the quality;
price is considered often too high (Jonis et al., 2008)and“healthy”
characteristic is not a sufficient reason for this (Iordachescu et al.,
2009). In some extreme cases organic certification label has also a
negative influence on price causing its reduction; thus some
American organically wine-makers do not use this label on the
bottle (Delmas and Grant, 2014). Furthermore, US consumers are
confused about organic definition; they appear to prefer biody-
namic wines seen as “a holistic and friendly approach to the
Earth”(http://www.wine-business-international.com). Also in
Austrialian market the organic attribute receives a low value by
the so-called “average Australian wine consumer”;ithasafew
relationships with consumers' mind (Remaud et al., 2008;Sirieix
and Remaud, 2010). An important obstacle to organic wine
spreading is originated by a bad reputation not only linked to the
wine price but also on its taste (Stolz and Schmidt, 2008;Delmas
and Grant, 2014). This is enhanced by the literature and it appears
widespread, mostly in Italy among the other EU producers
(National Rural Network 2007–2013, 2012). According to con-
sumers' judgments “organic wine is good for the environment but
not for those who drink it”. This may be affected by several
factors, e.g. the inexperience of the winemakers (National Rural
Network 2007–2013,2012; Delmas and Grant, 2014).
3. The survey
An explorative web survey was conducted in order to collect a
set of information aimed at getting a picture of the organic,
biodynamic and natural wine sector. A questionnaire composed
by four sections (34 questions) was sent via mail to a sample of
wine producers during summer 2011. The first section of the
questionnaire considered the firm in general terms and its
products. It is composed by 14 questions (i.e. year of foundation,
vineyard areas per production technique, presence of organic/
biodynamic certifications etc.). The second section is focused on
issues linked to marketing and communication strategies. There
were administrated 17 questions ranging from motivation for
producing organic/biodynamic/natural wine, distribution chan-
nels, target markets etc. The third part of the questionnaire
investigated more in depth respondents' perception of several
organic and biodynamic wine attributes by administrating five
questions such as strengths and weaknesses for producing
accordingtoorganicandbiodynamic methods, opinion on
organic regulation, and the possibility of implementing an organic
winemaking regulation. Finally, the last section is focused on the
entrepreneurs' personal data. For more details about the ques-
tionnaire structure see Table 1.
The sample included both certified organic/biodynamic wine-
ries and producers of natural wine (like organic/biodynamic
without certification) all around Italy. The first group of firms
includes certified companies extracted from Biobank and Sinab
6
database and the biodynamic units from Demeter database; the
arrangement of the second group was more difficult because a
specific list of Italian natural wine-makers does not exist. Thus,
the authors collected all the firms belonging to specificAssocia-
tions
7
and to organic–biodynamic–natural producers consortia;
the list was completed with the units found in specialized
websites
8
and finally there have been considered those wineries
which participated at least to one specialized trade fair
9
or
exhibition during the last two years.
After a further selection,
10
the final sample frame included
891 units, located in different Italian regions. The return rate
has been about 21%—183 filled questionnaires.
6
BioBank is one of the most important Italian website on the organic sector.
Sinab is the Italian Information System on Organic Farming.
7
VinNatur, ViniVeri, Renaissance Italia and Triple A.
8
www.vinobio.com, www.viticolturabiodinamica.it
9
Mainly VinNatur and VinoVinoVino in Italy, Biofach in Nuremberg
(Germany) and Millésime Bio in Montpellier (France).
10
The selection process excluded: organic/biodynamic firms not involved in
wine production; conventional firms with no organic productions; wine
cooperatives; entrepreneurs involved only in bottling phase.
A. Castellini et al. / Wine Economics and Policy 3 (2014) 71–80 73

4. Results
4.1. Characteristics of production system
Table 2 shows the main characteristics of the final sample. Over
70% of the sample declared to cultivate organically part of their
vineyards, a surface between 0.5 and nearly 102 ha. The majority
(63.91%) is the areas up to 10 ha but just six over 50 ha and almost
one-third of the interviewed wineries show intermediate values.
The average of the entire sample stood at 10.4 ha. With regard to
biodynamic producers, there are 48 companies that claim to
cultivate according to this technique. In this case, the hectares
average is less than 3 ha per farm. 39 out of 49 declare to be 100%
biodynamic producers; in other words, all wine grapes are grown
by this method, while 8 of them claim to cultivate also organic
vineyards. Just nine companies claim that grape is obtained
according to conventional methods but they also have some
hectares certified as organic or in conversion phase.
The total average wine production of the sample is around
821 hl/y, approximately 62,000 bottles of wine. However, this
Table 1
Structure of the questionnaire.
Section Sentence Number of options Question type
1 Q1. Company activity 4 Dichotomous
Q3. Presence of a certification 12
Q5. Organic/biodynamic methods adopted before certification 2
Q8. Future production expectation 3
Q10. Future number of labels expectation 3
Q13. Public subsidies 2
Q6. Annual production per method 3 Multiple choice with text entry
Q7. Hectares per method 5
Q9. Number of labels 3
Q11. Grape varieties 3
Q14. Extra cost perception for non-conventional production 5
Q2. Foundation year Open
Q4. Year of first certified bottle
Q12. Turnover
2 Q18. Main reasons to produce organic/biodynamic 6 Dichotomous
Q24. Advertising channels for organic and biodynamic labels 8
Q27. Organic/biodynamic labels promotion 2
Q28. Fairs participation 5
Q30. Reasons for not participating in fairs 6
Q31. Meetings and wine tasting organization 2
Q19. Sale channel distribution weight 6 Multiple choice with text entry
Q20. Sale markets for organic and biodynamic productions 8
Q21. Factors influencing business strategies of wineries 9 5-point Likert scale
Q15. Number of employees Open
Q16. Average age of management team
Q17. Year of last change in ownership or management
Q22. Average price for organic/biodynamic wine
Q25. Percentage investment on turnover
Q26. Investment expectation
Q29. Annual expenditure for fairs participation
Q23. Importance of organic/biodynamic characteristics 8 Rank order
3 Q32. Opinion on production disciplinary of organic grapes 4 Dichotomous
Q33. Interest in a law regulating organic winemaking 2
Q34. Advantages of organic production 6
Q35. Main problems of organic production 10
Q36. Presence of no-certified organic production 2
4 Q37. Company title 7 Dichotomous
Q38. Province of company headquarters Open
Q39. Respondent qualification within the company
Q40. Contact details (optional)
A. Castellini et al. / Wine Economics and Policy 3 (2014) 71–8074

data change significantly if the different methods of production
are considered separately (Table 3): in fact the organic wine
average production of the sample stands, indeed, at about
480 hl while the biodynamic one is about 110 hl.
In relation to the number of employees per winery, the average
data is quite low (4.42) and shows a reality of small companies.
Nevertheless, the data are strongly influenced by some outliers
within the sample: only 5% of companies claims to have more than
15 employees, while 94.54% has a lower number of employees.
More specifically, less than 65 companies (35.5%) are composed
just by the owner or rather, and more than two-thirds of the
companies do not reach 4 permanent employees (68.3%) (Table 4).
As it is easy to infer from Table 5 (question with multiple
answer; respondents could choose more than one), among the
reasons that have led companies to adopt organic/biodynamic
production the most important are ethical aspects (89%). 54%
of respondents pointed out the qualitative factors, considering
both the absence of chemical residues and specific taste of
wine connected with the territory. Regarding the economic
reasons, product differentiation from competitors (23%) and
response to consumers and market needs (13%) appear less
important among the other items. Government grants for
organic farming do not seem to be considered among the
main reasons (only 7%). Finally, the difficulty in selling a
conventional product does not appear decisive (3%).
Afive-point Likert-scale (1 ¼not important at all, 5 ¼very
important) was used to measure the relative importance of the
factors influencing business strategies of wineries. Table 6
shows the mean values of respondents for each factor. Quality
seems to be the most important: 89% of respondents, indeed,
tick a value of 5 and the final mean value is 4.9, even if with
lower evaluations, price,promotion and brand are considered
important, obtaining a mean value around 3.5.
The most used sale channels are represented by wholesalers
and traders (33%) (Table 7). Direct selling also plays a key
role for these wineries representing the second sale channel
with 29% preferences assigned and it is considered also an
important way for communication with the consumers. The
other channels used are represented by wine shops/bars and
Ho.re.ca which respectively reached a value of 16%.
The most important market for all the interviewed wineries
is Italy while European Union reaches a quota of 25% on the
total export, followed by North America with 10% and by Asia
Table 2
Sample characteristics: number of wineries according to technique of cultivation and the dedicated vineyards surface.
Categories of vineyard surface Total respondents
0 0.1–10 ha 11–30 ha 31–50 ha 450 ha
Organic
a
51 83 34 8 6 182
Biodynamic 135 31 15 1 1 183
In conversion 153 21 7 2 0 183
Note: In this table vineyard surfaces are considered organic or biodynamic with or without official certification (in this last case wine growers declared to follow that
standards or natural practices but without certification).
a
One winery did not answer.
Table 3
Sample characteristics: number of wineries according to the technique of vinification and the relative production volume.
Categories of production volume
a
Total respondents
0 (hl/y) 0.1–100 (hl/y) 101–300 (hl/y) 301–500 (hl/y) 501–1000 (hl/y) 41000 (hl/y)
Organic 48 33 50 16 18 19 183
Biodynamic
b
135 16 13 4 11 3 182
Note: In this table winemakers stated to produce organic or biodynamic wine, with or without official certification (in this last case they claimed to follow the same
standards or natural practices but without certification).
a
Average of last three years.
b
One winery did not answer.
Table 4
Sample characteristics: employees per winery.
No. of employees Total respondents
12–34–56–78–10 11–15 415
No. of wineries
a
65 60 22 6 8 8 11 180
a
Three wineries did not answer.
Table 5
Main reasons for wineries to produce organic/biodynamic wine (percentage).
Ethical choice 88.5
Higher product quality 53.8
Differentiation 23.1
Demand response 12.6
European contributions/subsidies 6.6
Difficulty in selling conventional product 3.3
A. Castellini et al. / Wine Economics and Policy 3 (2014) 71–80 75

with 5.2%. All the other countries exhibit values below 5%
(Table 8).
As far as different promotional tools concern Table 9 shows
the frequency of their use. It emerges that almost half of the
wineries (43%) stated they do not use any tools to promote
their wines (some of them participate to fairs but not with the
primary goal to advertise their organic/biodynamic labels) and
even a significant 39% adopts a simple brochures. Only 12%
of wineries use traditional media (television, radio, and poster)
presumably at local level. Strategic is the role of the fairs,
which are becoming more important among different promo-
tion activities. In particular, Vinitaly shows the highest
participation: almost half of the sample attended it. VinNatur
and ViniVeri obtained surprising results. Significant presence
was registered within two foreign exhibitions: BioFach in
Nuremberg, one of most important European events dedicated
to organic farming, and Millesime Bio in Montpellier, focused
specifically on organic wine world.
Considering the modern communication tools, it has been
asked if organic and biodynamic labels were promoted by a
website and/or sold by an e-commerce channel. In the first case
over the half of respondents (55%) answered that they use a
website to promote and enhance their wine, while the second
issue was adopted only by 16.6% of them. Consequently 45%
of firms of the sample do not use the internet as communica-
tion tool. Finally, 70.06% of respondents claim to propose
wine tasting in order to promote their product and almost 90%
(89.82%) of interviewed wineries stated to organize guided
tours to their cellars and to their production areas.
4.2. Cluster analysis
In order to perform a cluster analysis, six questions have been
selected from our dataset
11
(Table 10). To the first variable “How
important are the following aspects of your business strategy, in
relation to organic and biodynamic production?”has been applied
the principal component analysis to reduce the numbers of 8
options provided by the questions (see Table 6.Thevariable
“specialized guides”was excluded because it does not represent a
specific marketing tool of a winery).
Three methods were used to identify an appropriate number
of components: the cumulative variance explained by the
autovalues (Table 11), the screeplot (Graph 1) and Kaiser
criterion based on the average autovalue so that three
components were chosen.
Table 12 summarizes the contribution (in percentage) of
each variable defining new axes. Thus it is possible to attribute
a name to the dimensions. The first component may be called
marketing mix, the second Certification and the last Product
characteristics.
After a principal component analysis the dimension of data
matrix is 162 14 and the variables are either quantitative
continue and dichotomous so we use the metric “Gower”to
calculate the dissimilarity matrix and the divisive algorithm
PAM for clustering.
Using the average silhouette index 4 clusters are identified
(Table 13). The first cluster (C1) is composed by 55 companies
(34% of the sample). Considering the clustering variables, this
group assigns to the strategic levers of marketing mix a higher
average score compared to other clusters and to the sample
mean. The other two clustering variables, products character-
istics and certifications, obtain as well as a higher score
preference compared to the sample mean.
Looking at the communication/promotion variables, the first
cluster is characterized by companies that use traditional
communication means (press, brochure and poster) as well as
more modern tools linked to the internet. Deepening those
Table 6
Main factors influencing wineries' business strategies (mean).
Quality 4.86
Price 3.57
Promotion 3.53
Brand 3.52
Distribution 3.47
Packaging 2.86
Specialized guides 2.82
Certification 2.81
Certification of origin 2.45
Table 7
Sale channels distribution weight (frequency).
Wholesalers/export agents 32.8
Direct selling 28.8
Wine shops/bars and traditional retailers 16.3
Ho.re.ca 16.2
Mass retail channel 2.7
Other firms 2.0
Table 8
Wineries' sale markets for organic and biodynamic wine (percentage).
Italy 56.0
Others EU 24.6
Other European countries 3.6
North America 9.6
South America 0.3
Asia 5.2
Africa 0.1
Oceania 0.6
Table 9
Place/channels adopted by wineries to advertise their organic/biodynamic
labels (percentage).
Fairs 57.1
Brochure 39.0
Press 8.8
Internet 8.8
Radio 1.6
Poster 1.1
Television 0.5
No advertising 42.9
11
19 statistical units were dropped due to missing values.
A. Castellini et al. / Wine Economics and Policy 3 (2014) 71–8076

aspects linked to exhibitions and fairs, companies in the first
cluster take part mainly to the most important international
wine fair, Vinitaly, and to other fairs as Biofach. Finally,
companies of this group show to resort more than companies
of the other clusters to wine tasting and guided tours
considering them very important promotion means.
42 companies characterize the second cluster (C2), 26% of
the sample. In this case the strategic levers obtain lower
evaluations even under mean regarding the 4 marketing mix
levers and the product characteristics, while the preference
score for certification is coherent with the sample mean. In
general terms it is possible to state that values assigned are
close to sample mean.
The aspects linked to communication/promotion are much
lower than in C1 and, in this case, they are identified in
particular in the high participation to exhibitions and fairs,
especially VinNatur event. Cluster 3 (C3) is composed by 36
companies, 22% of the sample and it is characterized by very
Table 10
Clustering variables considered.
Questions Number of options Variables type
Q21. How important are the following aspects of your business strategy, in relation to organic
and biodynamic production?
8 Quantitative discrete
Q24. Does your company make specific advertising for organic and biodynamic labels? 4 Dichotomous
Q27. Concerning organic and biodynamic labels your company…3 Dichotomous
Q28. What wine exhibitions and/or fairs have you attended in the last three years? 5 Dichotomous
Q31. Do you organize meetings and wine tastings in order to promote organic and biodynamic wines? 2 Dichotomous
Table 11
Cumulative percentage of variance.
Eigenvalue Cumulative percentage of variance
Comp 1 2.947 36.831
Comp 2 1.340 53.581
Comp 3 0.895 64.771
comp 4 0.783 74.554
Comp 5 0.609 82.168
Comp 6 0.581 89.431
Comp 7 0.505 95.745
Comp 8 0.340 100.000
Numb er of Comp onen ts
Autovalues
12345678
0.5
1.0
1.5
2.0
2.5
3.0
Graph 1. Scree plot.
Table 12
Loading percentage contributions (bold values are the highest for each row (the
most significant)).
Comp 1% Comp 2% Comp 3%
Product quality 2.510 22.938 57.198
Price 9.813 6.969 0.086
Distribution 17.613 3.079 0.023
Brand 21.452 3.876 3.885
Packaging 16.976 0.106 19.089
Communication 15.214 10.036 0.182
Certification of origin 8.939 29.466 4.950
Certifications 7.483 23.530 14.588
Table 13
Clustering variables: descriptive statistics for each cluster (bold values are the
highest for each row (the most significant)).
C1 C2 C3 C4 Sample mean
Strategic levers
Marketing mix 0.63 0.17 0.60 0.20 0
Certifications 0.17 0.06 0.16 0.22 0
Product characteristics 0.21 0.11 0.11 0.11 0
C1 C2 C3 C4 Relative frequency
Advertising
No advertising 0.18 0.19 0.86 0.97 0.48
Brochure, poster, press 0.82 0.60 0.06 0.03 0.45
Exhibitions/fairs 0.89 0.95 0.22 0.17 0.63
Internet 0.22 0.05 0.03 0.00 0.09
Internet usage
Promotion 0.98 0.00 0.81 0.00 0.51
Selling 0.25 0.00 0.28 0.00 0.15
No usage 0.00 1.00 0.14 0.93 0.46
Fairs
Vinitaly 0.58 0.17 0.33 0.62 0.43
VinNatur 0.18 0.38 0.31 0.10 0.25
Viniveri/Vinovinovino 0.18 0.24 0.33 0.10 0.22
Other 0.35 0.17 0.11 0.07 0.20
No fairs 0.02 0.05 0.08 0.10 0.06
Other type of promotion
Wine tasting 0.78 0.69 0.78 0.34 0.68
Visits 0.95 0.88 0.86 0.79 0.88
A. Castellini et al. / Wine Economics and Policy 3 (2014) 71–80 77

low evaluations for strategic levers of marketing mix compared
to the values of the sample mean. Looking at the mean value
assigned to item no advertising, 0.86, it is possible to state that
the companies of this group do not consider important
advertising. In this cluster, indeed, companies refer to specific
fairs for organic wine (especially Viniveri) in order to promote
their product.
Finally, within the last cluster (C4), 18% of the sample (29
wineries), either marketing mix levers or certifications obtain
values slightly below the average of the sample. Companies
belonging to this group do not use any kind of advertising or
of the internet to promote their product.
Compared to the other clusters, in this case, companies that
do not take part to exhibitions and fairs prevail, those
companies that claim to go, and stated to prefer in particular
Vinitaly. Turning to the analysis of those variables that have
not been used in the clustering process and looking to data
reported in Table 14, it is possible to state that companies more
market-oriented (C1) are mainly located in the central regions
of Italy as it is possible to infer from Table 14. Furthermore,
these companies are the biggest in dimension terms and, thus,
they have at their disposal more resources from all points of
view. Compared to the other clusters, companies of C1 have a
broader organic production area (15 ha), a three-year period
Table 14
Clusters profile: descriptive statistics (bold values are the highest for each row (the most significant)).
C1 C2 C3 C4 Sample mean
Distribution channels (%)
Direct selling 29.16 30.02 33.44 25.17 29.62
Wine bars, traditional retailers 12.64 19.10 15.56 19.86 16.25
Ho.re.ca 14.91 15.62 15.58 19.14 16.00
Wholesalers/exporters 36.16 30.48 31.33 34.10 33.25
Markets (%)
Italy 57.84 55.43 52.33 56.03 55.67
UE 25.95 24.38 28.11 18.45 24.68
North America 9.69 7.57 10.11 13.86 9.98
Asia 3.58 7.26 4.17 5.41 4.99
Other markets 2.95 5.60 5.28 6.24 4.74
Average price (€/litre) 7.64 8.08 8.12 12.01
Average number of labels
Organic wine 5.57 4.33 3.38 2.55 4.20
Referred to DOC/DOCG
a
2.63 2.49 1.32 1.55 2.10
Biodynamic wine 0.73 0.56 1.50 1.38 0.98
Referred to DOC/DOCG 0.33 0.18 0.91 0.59 0.47
Average area (ha)
Organic 15.35 7.42 5.87 6.20 9.51
Biodynamic 2.12 2.19 3.09 5.69 3.00
Average production (hl)
Organic 757.19 383.58 237.17 181.55 439.76
Biodynamic 78.44 88.57 135.47 132.93 103.65
Sales volume (€)596,486 292,174 267,476 527,063 441,649.48
Employees (number) 4.96 2.95 3.97 6.58 4.53
Foundation year of the winery 1981 1987 1967 1979
C1 C2 C3 C4 Relative frequency
Italian district
North East 0.22 0.31 0.29 0.36 0.28
North West 0.06 0.12 0.21 0.2 0.13
Central Italy 0.48 0.31 0.26 0.24 0.35
South 0.15 0.19 0.15 0.2 0.16
Islands 0.09 0.07 0.09 0 0.07
a
DOC means Denominazione di Origine Controllata (Controlled Appellation of Origin) and DOCG is Denominazione di Origine Controllata e Garantita
(Controlled and Guaranteed Appellation of Origin). They are Italian quality labels for wine.
A. Castellini et al. / Wine Economics and Policy 3 (2014) 71–8078

producing average of about 760 hl, which means an average
annual sales volume of approximately €600,000.
In addition, firms in the first cluster show the highest
number of organic labels for wine (average of 5.6). Data
related to the products average price get the worst performance
compared to the other clusters, the value mean of the group is
indeed under 8 €/litre. With regard to distribution channels, the
companies of C1 group are characterized by the use of
wholesalers/exporters channel. Finally, by the analysis of the
sales markets it can be seen that C1 presents value slightly
above the average of the sample in relation to the national
market.
To sum up, it possible to say that this group is characterized
by better management performance than those obtained from
the initial sample. This evidence confirms the hypothesis,
already asserted in several empirical studies (Lynch et al.,
2012), that a market-oriented approach provides the best
performance from many points of view. In group C2, it
appears evident that firms are characterized by a higher level
of exports towards Asian market.
Third (C3) and fourth cluster (C4) show a common trend
towards biodynamic production and a high presence of
companies in the Northern Italy. The number of labels, on
average lower than 2, results to be similar in both groups. On
the other hand, the groups differ for some strategic orienta-
tions. In particular, C3 shows a higher production of biody-
namic wines (135 hl), while production area, sales volume and
number of employees result almost halved compared to C4.
The aspect that basically differs among companies of C3 and
C4 is the distribution channel: the group of companies
belonging to C3, indeed, assigns a value higher than the
average one for direct selling while in C4 companies distribute
their products by wine shops/bars, traditional retailers and Ho.
re.ca channels. Finally, looking at markets, it is easy to say that
C3 exports mainly to EU countries, while C4 exports also to
North American market.
5. Conclusions
In the last decades, changes in consumer's lifestyles and
choices of food products on the one hand and an increasing
market globalization on the other have significantly modified
the wine sector structure both in terms of production organiza-
tion and of marketing and distribution aspects. At the present
time the Italian demand structure and trend show a consumer's
attention for food intrinsic quality, safety, sanitary, organolep-
tic and nutritional properties; furthermore it should be empha-
sized the increasing importance of purchase factors such as
health care, environmental protection and rural areas specifi-
cities as items that are confirmed by the consumers' preference
for organic products (Shafie and Rennie, 2012). For Italian
producers organic wine could represent a new and important
tool for diversification strategy on the market. It has been
noted that the current literature is lacking in information
concerning organic and biodynamic wine sector and the choice
of an exploratory analysis is motivated by this state of affairs.
This paper in particular is aimed at surveying the production
system characteristics and marketing strategies adopted by
Italian organic wineries.
The study results indicate a heterogeneous production
system where medium- and small-sized firms represent the
large part of the Italian units. The survey shows that the
majority of companies (89%) adopted organic techniques
because of ethical reasons. On the other hand CAP and/or
governmental subsidies to organically produce, instead of a
conventional method, do not represent an important lever for
almost any of the companies considered in the survey.
Furthermore, the organic wine quality represents the most
important business strategy for Italian wineries followed by
aspects as price, promotion and brand. The high importance
attributed to quality probably depends on a common belief (but
there is a lack of scientific results about this) that wines from
organic viticulture have a lower quality than the conventional
ones, both in terms of sensorial characteristics and a supposed
higher content in compounds harmful for human health
(Comuzzo et al., 2013).
With regard to the sales channels the most used is
represented by wholesalers and export agents (33%) and this
is coherent with the decision to export almost half of the
production and with specific advertising channels. Currently
modern retailing is not playing a primary role, indeed an
important role is acted by direct selling. This is probably
justified also by the low volumes produced. Moreover, this
channel is preferred during the start-up phase, in order to keep
selling at low cost and establish a direct link with the
consumers. It is interesting to highlight that the findings of
this study confirm the results of previous research focused on
non-conventional viticulture in Italy (Vastola and Tanyeri-
Abur, 2009). As far as promotional aspects are concerned, the
most surprising outcome of the study regards the scarce use of
the internet as communication tool and, on the opposite, the
crucial role that companies assign to fairs for promoting their
wines as well as wine tasting and guided tours.
The cluster analysis revealed very different companies
profiles and strategic tools adoption. The large number of the
companies (C1), indeed, adopts different marketing mix
strategies, from the more traditional tools to the use of the
internet and the participation to the most important wine and
organic wine fairs in order to promote their products. On the
other hand, a group of companies composed by 22% of the
sample (C3) claims to refer not to particular strategic tools
except for the participation to specific fairs on organic wine.
Finally a surprising 18% of the sample (C4) asserts that they
do not use any promotional tool for boosting their wines but
some of these wineries participate to fairs.
One of the sector weaknesses that emerges from this
analysis is the lack of consumer knowledge. For long time in
the Italian market many terms were used which define organic
or biodynamic wines such as “natural”,“true”,“genuine”,
“traditional”which refer to quality characteristics without any
certification (Vastola and Tanyeri-Abur, 2009). The new EU
Regulation about organic wine has the advantage to improve
transparency and better consumer recognition but if suitable
communication, either from a public policy or commercial
A. Castellini et al. / Wine Economics and Policy 3 (2014) 71–80 79

perspective, and labeling/certification is not taken into con-
sideration, the added value of the production method might not
be perceived by the final consumers. Facing the people's low
awareness of this type of product, a collective approach aimed
at communicating the organic wine distinctiveness could be
strategic maybe also a collective approach of communication
aimed at better explaining the specific organic wine character-
istics could be strategic for the industry development (Sirieix
and Remaud, 2010).
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