Kudler Fine Foods case study part two

Kudler Fine Foods: Justification of International Market

Kudler fine Foods is planning to expand into other growing markets of the world and this time, it is seriously considering Italy as its next potential market. Kudler is known for its world class wine and its gourmet meats and other grocery items. It is for now only focusing on introducing its class of wine into Italian market and thus seeks to understand the growth potential and the size of the new market.

We must not forget that European Union countries are known for their role in wine production and Italy had once been producing more than 30% of wine coming from EU. However lately the number of vineyards has gone down but Italy still contributes 25% to total EU wine production. What makes Italy a very attractive market for Kudler is the fact that Italy has seen a consistent rise in its wine exports while local consumption has decreased. This means that if Kudler enters the market, it may be able to capture some of that export share as well while also getting significant share from local consumption.

With greater exports, Italy is more than welcoming to anyone who will help them increase their local wine production and become bigger exporters. Kudler can focus on this area of wine market as well while trying to capture the local market. This is because if a country is considered one of the hubs of wine production, it always makes sense to make an entry into that market with your own product.

Before we study this any further, let us see how Italy has been doing in the wine export area. According to research conducted by Association of enologists (Assoenologi), Italian export growth is majorly concentrated in two key areas i.e. two major types of table wines. One is Vini da Tavola which has a very high "export value of 131 million €" and the other is sparkling wines "with value at 77 million €"[1]. These two types of wine alone had contributed to 90% of the total export growth.

Italy saw a major rise in wine production in 2007 which again came from growth in production of sparkling wines. "Trade committee within the framework of Consortium Asti Spumante (Consorzio dell'Asti Spumante) declared that in comparison with the previous year the sales of sparking wines grew by 11.9% to total 78.8 million bottles. Export figures of the organization's members went up by 13% with 80% of the total volumes of products going for export. Such considerable growth is the result of 48% sparkling wine sale increase at the Russian market and 13.1% at the British market respectively." [1]