There is something deeply compelling about the Italian beer market - it's in growth. And, according to figures from Brewers of Europe, the Italians' thirst for beer makes it the only European market where beer consumption is consistently increasing.
The country might be better known for its wines but, domestically, beer is growing in popularity. In 2006, per capita wine consumption dropped to a record low of 46 litres, while beer reached new heights, according to figures from the country's beer trade association, AssoBirra.
"Last year, consumption hit a new record of 30.3 litres per capita, against 29.9 in 2005," says AssoBirra president Piero Perron. And, while wine might be the tipple of choice for at-home drinkers, Perron is pleased that when people go out in the evening the sales of wine and beer are running neck and neck.
"A growing number of Italians claim they are drinking more beer because they enjoy the genuine quality of its taste," he says. "Beer is now trendy and fits in perfectly with modern lifestyles."
But the picture is not all rosy. Even though consumption is up, domestic production is relatively static at 12.8 million hl and while it is about 70 per cent of the national beer market, according to AssoBirra, it is in slow decline. The increase in consumption is almost entirely covered by a growth in imports, which rose from 5 .5 million hl to 5 .8 million hl ( up 10.6 per cent) in 2006 (see table page 48).
More than 70 per cent of imported beer in Italy comes from Germany and Holland, and the volumes are growing. Italian brewers say it is hard for them to compete with cheaply-produced imports. "Imports grew, in particular, in the medium-low segment and therefore in the medium-low price range," says Perron.
But despite the problems, AssoBirra maintains that the Italian beer market is in rude health. Currently, there are 16 significant brewing sites in Italy, which employ more than 20,000 people. Says Perron: "In 2006 Italy was confirmed the ninth-largest producer in the European Union, surpassing countries with strong beer-drinking traditions, such as Austria, Denmark and Ireland.
"A further sign of the vitality of our national sector comes from the strong growth in the number of brands produced and/or distributed in Italy."
Results of research published in AssoBirra's annual report this year show a 3 per cent increase on 2005 in beer consumption in Italy. The number of beer fans in Italy is rising along with the popularity of drinking in bars and clubs.
While the common perception might be that most Italians would rather have a Chianti than a Carlsberg, almost seven out of 10 Italians claim they drink beer daily. Indeed, Italian beer drinkers - who tend to be well-educated urban dwellers aged between 18 and 24 - show a great deal of sophistication and product knowledge, which must make the country the envy of the brewing world.
According to the AssoBirra research, Italians view beer as both traditional and modern, a good alternative to wine made with healthy, natural ingredients, and drinkable everywhere. More importantly, it is easy to drink, suitable for women, refreshing and thirst-quenching. "Such positive images influenced consumption, and especially out-of-home consumption," the report states.
Even though most Italians buy their beer in supermarkets, beer is distributed through bars, hotels and restaurants by a network of 2,000 wholesalers. Carlsberg Italia marketing director Jakob Knudsen says: "In Italy the market is promising, as it is showing a moderate increase, even if the beer consumption is less than in northern Europe. Importantly, young people are especially interested in beer.
"Carlsberg Italia's volume trend is rather satisfying - plus 2 per cent versus last year, due mainly to off-trade sales. Tuborg has been relaunched over the past two years and the brand shows a continuous growing trend."
For many, though, the biggest phenomenon in the Italian beer market is the swift rise of microbreweries and brewpubs. In the past 10 years the country has experienced something of a microbrewery revolution, with the numbers of small producers involved rising from 10 in 1996 to more than 150, according to brewing analyst Maurizio Maestrelli. Most are in the beer-drinking north but there also sites in Sardinia and Sicily.
Among the first on the scene were Le Baladin in Piedmont, Birrificio Beba, Birrificio Italiano in Lombardia and Birrificio Lambrate in Milan. Teo Musso set up Le Baladin in 1986 as a pub and started brewing in 1996. A non-conformist, he specialises in interpretations of Belgian beer styles, but has recently started to brew ales - which he describes as "my rapture" - made using wine and whisky yeasts.
Like many of the microbrewers he is exploring the boundaries of brewing style. "Nora is brewed with a Mesopotamian grain called kamut, ginger and myrrh," says Musso. "Xyauyù, weighs in at 12 per cent abv and is the result of extensive research on oxidation to obtain solera-type flavours used in sherry production."
The craft beer movement in Italy has been encouraged by young Italian consumers, who are familiar with beers from Belgium, Britain and Germany. "The first microbreweries were really brewpubs, serving non-pasteurised beer," says Maestrelli. "Then they started to bottle and sell it across northern Italy. This trend is attracting even more entrepreneurs as they see that craft beer is a good business. This obviously means there is acceleration in the development of the microbreweries."
The development of brewpubs came at a time when going out to a pub became a trendy thing for young people to do, says Maestrelli. "The image of beer changed in Italy at the beginning of the 1990s, with the development of Irish pubs, Belgian brasseries and, of course, German beer gardens. We are starting to see quality beers in very good restaurants, and even in places where you could [previously] buy just wine. Today, brewpubs are attracting people from 20 up to 45 years old."
Many of Italy's craft brewers are pushing the boundaries of brewing and developing a unique Italian style. "One brewer uses flowers, another cinnamon, another uses Chinotto di Savona, a kind of orange protected by Slow Food in Liguria," says Maestrelli.
"Lambrate in Milan produces a smoked beer called Ghisa, the dialect name of the traffic policeman in Milan. Bidu in Rodero, near Como, makes a kolsch-style beer, Panil at Torrechiara, in the Parma ham area, makes Panil Barriquée, a beer that ferments in an oak mash tun.
"The brewer Renzo Losi is trying to make the first spontaneous fermentation beer in Italy. There's a lot of fantasy in the brewers' work, not everything is perfect but they try and try. Strong beers such as strong ales, trappist, bock and doppelbock , are proving popular with Italian consumers, who are looking for new tastes and aromas."
Even though Italy is regarded by many as the birthplace of style, the Italian beer consumer perceives international brands to be better than locally-produced beer, according to AssoBirra's report. But SABMiller has found that Italian "pizazz " is something that really resonates with consumers around the world.
The company relaunched Peroni Nastro Azzurro in March 2005 with a new look emphasising its heritage and craftsmanship, giving it an Italian style positioning.
Company spokeswoman Victoria Greenyer says: "Peroni is now much more than a national brand - it is establishing a presence in many other markets around the world." Following a US$50 million promotion in 2006, Peroni Nastro Azzurro is now sold in Japan, France, Romania, Poland, South Africa, Puerto Rico, Colombia, India, Peru, Australia, the UK and US.
"Building on this Peroni Nastro Azzurro is achieving universal appeal through its unique, clear and aspirational brand positioning," says Greenyer. "Peroni Nastro Azzurro's fresh approach and new style has what it takes to challenge people's traditional perceptions about the beer category and to reinvigorate the market."
The Peroni relaunch has reaped rewards in its domestic market too. "Italy does still have the lowest per capita beer consumption in Europe and, although the market is increasing in size, this is largely driven by foreign imports," says Greenyer. "Following the relaunch Nastro Azzurro has enjoyed regular growth nationally in excess of 9 per cent each year - 11 consecutive quarters of growth."
With burgeoning interest among Italy's young consumers, a dynamic and inventive craft brewing scene and a major international brand at the vanguard, the Italian beer market is much more than just "que sera sera ".
=== The big three in Italy ===
l Heineken began its Italian operation in 1974 with the acquisition of the Dreher brewery, adding the Moretti brewery in 1996. Heineken Italy employs more than 1,000 people and has six brewing plants producing some 5.75 million hl
of beer in Pollein (in the Alps), Massafra (Puglia), Messina (Sicily), New Comun (Lombardia), and Assemini (Sardinia).
l Carlsberg started brewing and distribution of Carlsberg and Tuborg beer in Italy in 1975. In 1982, the company acquired 50 per cent of Industrie Poretti, and the remaining 50 per cent was acquired in 2002, whereupon the company became Carlsberg Italia. Production is being concentrated at its brewery in Varese, north of Milan, increasing its capacity by 0.5mhl to 1.4mhl.
l SABMiller acquired a majority interest in Birra Peroni in May 2003. Although Birra Peroni, the brewery, was established in 1846, Peroni Nastro Azzurro, which is the country's best-known brand, was created as recently as the 1960s.
=== Italy beer supply, market share ===
('000 hl) % ('000 hl) %
Heineken Italia 5,649.0 32.6 5,630.0 31.5
Birra Peroni 3,814.0 22.0 3,822.0 21.4
Carlsberg Italia 1,246.0 7.2 1,172.0 6.6
Birra Forst 671.0 3.9 626.0 3.5
Birra Menabrea 104.0 0.6 117.0 0.7
Birra Castello 765.0 4.4 668.0 3.7
Hausbrand Trieste 19.0 0.1 20.0 0.1
InBev n/a n/a 1,272.0 7.1
Others 17.3 0.1 280.0 1.6
Third-party imports 5,054.4 29.1 4,244.0 23.8
Total 17,340.1 100 17,851.0 100
Source: AssoBirra annual report 2006
=== Italian beer market 1996-2006 ( '000 hl) ===
(+) (-) (=)
Year Production Imports Exports Consumption
1996 11.117 3.069 428 13.758
1997 11.455 3.341 261 14.535
1998 12.193 3.681 373 15.501
1999 12.179 3.875 379 15.675
2000 12.575 4.142 428 16.289
2001 12.782 4.414 502 16.694
2002 12.592 4.437 689 16.340
2003 13.673 4.664 884 17.453
2004 13.170 4.873 849 17.194
2005 12.798 5.258 716 17.340
2006 12.818 * 5.814 781 17.851
Source: AssoBirra annual report 2006
*Includes microbreweries and non-associated factories