Antinori and Frescobaldi – market dynamics of Italian wine

Some industries practically stopped in the quarantine period, but in the wine market, this has been a period full of activity, and emotion. This week, I had the information about the market dynamics that started last year and should be public until next month.

Antinori, the century-old Italian winery, had changed because of a global alignment action.

Since 2010, Antinori had an exclusive agreement with Winebrands. And the Winebrands/Antinori partnership was very good for both. The Winebrands has made and maintained Antinori as Italy’s leading brand in premium and super-premium wines (FOB over USD 30 per 9 liters). On the other side, carrying the Antinori brand offered the foundation for Winebrands to be born and, in a few years, reach the #29 position in the ranking of importers. At the same time, however, the brand was an anchor to the importer’s potential in the Brazilian market.

As required by Antinori, Winebrands could not incorporate a more powerful brand from Chile, where it also produces wines, fighting with a hand-tied behind its back in a 40% slice of the Brazilian market. The same was happening on a smaller scale with Puglia, whose Primitivo de Manduria was favored by the Brazilian consumer and created sales champions.

Antinori goes to his historic distributor in the United Kingdom, Berkmann Wine Cellars (BWC), a great specialist in on-trade. The relationship between Berkmann and Antinori has existed for decades.

In the 1960s, Mr. Joseph Berkmann had several restaurants in England and found it difficult to buy the wines he wanted to serve in his restaurants. Mr. Berkmann then started importing wine for his restaurant and then started selling wine to other restaurants, focusing on France, more specifically Burgundy. In the 1980s, Antinori became part of the BWC portfolio. The restaurants were sold, but Berkmann became the largest family-owned importer in the UK.

With Antinori, globally, the company will “swallow a bone” in India and “a  filet” in Brazil. Berkmann was founded 5 years ago, in Rio de Janeiro, Brazil, with the same strategy as the head office, focused on on-trade service. According to data from Ideal Consultoria, BWC ranked #72 among Brazilian importers last year, with 0.1% of the market.

If it had counted sales of Antinori and Haras de Pirque in 2019, the company could had reached position #36 among Brazilian importers. This is a really good thing and also a beautiful challenge that, according to Paulo Bruno Cordeiro, CEO of BWC, is demanding a lot of investment. “We strengthened the commercial team in São Paulo, we are going to hire a brand ambassador and invest to increase awareness of the entire portfolio, reinforcing what has already been done by Winebrands, which is a very well-structured importer.”

More than once I was asked what conditions were necessary to launch a new importer in Brazil. In my opinion, a big brand and a lot of capital are needed. And without the big brand? There, it is necessary to multiply the need for capital by 5, or by 20 the patience to grow little by little.

The reaction of Winebrands

I spoke with Ricardo Carmignani, CEO of Winebrands, and he said: “In fact, I would not like to have no more Antinori in our portfolio. But it is also true that it is the help we needed. We see the movement as a great opportunity ”.

The loss of Antinori seems to have given the importer a boost – a kind of liberation.

And the dynamics continued.

Winebrands brought to its portfolio another Italian reference name, Marchesi di Frescobaldi who has not organized itself in Brazil since it has left Expand. Frescobaldi was elected Winery of the Year 2020 by the prestigious Italian guide Gambero Rosso, who attributed the title “to the success in combining tradition with strategic vision and innovation”.

Since January this year, Ricardo has signed agreements with a winery in Puglia, Masseria Borgo dei Trulli, in addition to the great icons Ornellaia and Masseto.

In my analysis, Winebrands acted precisely to remain its position as a relevant player with its new portfolio from Italy. Now, the crutial move will be the ability to migrate loyal Winebrands customers, from Antinori to Frescobaldi and their new Bota portfolio.

The realization of the company’s full potential, however, will happen even when finding the right match in Chile, and also in the south of Portugal, more precisely in the Alentejo. and the most important point will be to develop and find the right dose between B2C and the other sales channels. In times of coronavirus, it may not be okay to use the Chinese proverb that crisis is synonymous of opportunity, so I will rather use a common sentence: “Sometimes, one must reinvent itself”.

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