Large wine companies are growing almost twice as much as small ones; above all, they're three times as profitable: in an ultra-competitive market, Pambianco Strategie di Impresa concludes, it's necessary to aim for the high-end market segment to create value, but this requires extremely high quality, targeted communication, international distribution and financial resources.
When these are lacking, it might be worthwhile to start considering the possibility of forming an alliance with a strong partner, as in the case of Biondi Santi purchased by French group Epi, Sella&Mosca by Terra Moretti, Tenuta San Giorgio by ColleMassari and Canevel, acquired by the Boscaini family's Masi brand, all in 2016.
Pambianco's survey on the wine industry's performance (the top-performing food sector in Italy, with €5.5 billion's worth of exports) analyzed the balance sheets of a sample of 171 companies that, all together, realized a €6.2 billion turnover for 2015. Average revenue growth was 5.2%, while EBITDA grew 10.4%. The survey then extracted the high-end wineries from these 171 companies: there are 48 of them, recording a €1.25 billion turnover and 7.8% growth in 2015.
These are the most renowned wineries (with all of their brands), including Antinori, Frescobaldi, Ruffino, Lunelli, Banfi, Masi, Fontanafredda, Terra Moretti, Berlucchi, Ca' del Bosco. While the 123 midrange wineries showed a €4.96 billion turnover and 4.6% growth in 2015, the top-of-the-range companies' revenue growth was 7.8%. The biggest difference, though, was in EBITDA: top wineries recorded a 23.1% incidence on revenues, while the mid-range ones showed a scantier percentage of 7.2%.
“If we further compare the Top 10 wineries in terms of turnover, we note their EBITDA are even higher, above 27%, than the high-end wine companies' as a whole,” said Carlo Pambianco.
A veritable wine star is Tenuta San Guido with its famous brand, Sassicaia: a turnover of €27 million and over 55% EBITDA – absolutely the highest – and profits for €10 million.
“Aiming for the high-end market is possible, “adds Lamberto Frescobaldi, president of the eponymous Tuscan group, “but you need top-notch knowhow and expert specialists. And of course, also large amounts of capital.”
The challenge pertaining to value is as pressing as ever for Italian wine which, quantities being equal, generates little over one half of the turnover of French wine.
“In fact if we separate Champagne and only count the still wines, the figures for Italy and France are quite close,” said Frescobaldi. “Generally speaking, I'm optimistic about Italian wine's future performance: Millennials and subsequent generations are less informed and less biased, so they're more responsive to the qualities and true worth of our wine.”
In 2016, the Frescobaldi group reported revenues above €100 million (up from €95 million the previous business year) and a production of over 11 million bottles, a million more than in 2015.
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