what future for small italian wine producers?

Brand vs. OriginWhat future for small

Italian wineries?Presented by Reka Haros

For MIB School of ManagementDecember 2015

Who I am I am a seasoned marketer and wine business developer with a solid background in brand management and communications thanks to my prior career in FMCG and Advertising industries. I am managing partner at Sfriso Winery in Italy and a marketing and business development consultant for both in and outside the wine industry.

@RekaHaros

A quick look at the Global Market

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Global production in billions of liters

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 20140.00

5,000.00

10,000.00

15,000.00

20,000.00

25,000.00

30,000.00

23,851.1023,994.5024,296.4024,742.2024,827.1025,224.1025,537.9026,128.1026,379.3026,679.9027,263.2027,814.2027,969.0027,857.7027,873.80

WorldWestern EuropeAsia PacificNorth America

Fonte: Euromonitor 2015

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1) Global production +10%

2) European production -10%

3) Asia and North America +50%

But in the past 4 years, production has been stable!

Trend over the past 14 years

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Global per capita consumption

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 20140

5000

10000

15000

20000

25000

30000

35000

40000

Western Europe North America World Asia Pacific

Fonte: Euromonitor 2015

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Trend in the past 14 years -17% in Europe

+37% North America

+ 55,5% in Asia

-1,8% globally

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New consumers are coming from new markets

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Italy’s global market

position: Sempre fra I primi produttori

Among the first in volume production

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Third consumer in the world with 8.26% of

the total volumeUSA

France Ita

ly

German

yChin

a UKSp

ain

Argenti

naRuss

ia

Austral

ia

Rest of

Worl

d0

5

10

15

20

25

30

35

8.26%

% World Consumption

% World Consumption

Fonte: http://www.wineinstitute.org/files/World_Wine_Consumption_by_Country_Revised_Nov_2015

.pdf@RekaHaros

Italy’s global market

position:

Italy ranks 13th with 33.3 liters per capita consumption

NB: Although US ranks 1st for consumed volumes, it consumes only

10.25 liters per capita

Fonte: http://www.wineinstitute.org/files/World_Per_Capita_Wine_Consumption_Revised_Nov_2

015.pdf @RekaHaros

Italy’s global market

position:

The question is:How can small producers

compete?

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Focusing on consumers

Understanding their needs and their emotional world

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Brand vs. Origin?One does not exclude the other

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Just understand where your

consumers areItaly or Abroad?

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What do foreign consumers think about “country of origin”?

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The value of “Made

In Italy” by county of

origin according to foreign consumers

Fonte: “Made In” the value of Country of Origin for future brands by FutureBrand @RekaHaros

The "Made in Italy" is important in brand communications! It offers companies the opportunity to create competitive advantage and differentiation

It guides consumer purchasing decisions

The "Made in Italy" ranks second most valuable in the category of Food & Beverage

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But be careful not to create too much confusion@RekaHaros

Italian denominations are confusing

More than 300 DOC

More than 70 DOCG

Imagine if all wineries talk about their origins!

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Effective communication of

"Made In Italy"Should not be done through the registered designations of origin but through four key areas:1. Authenticity: The production of

unique products and services has to be related to the history, people and geographical situations of the country.

2. Differentiation: proving a different cultural approach from competitors.

3. Quality Standards: showing commitment to safety, craftsmanship, excellence and production transparency.

4. Competence: to be identified as the 'best' in a category or have created or defined a category.

Fonte: “Made In” the value of Country of Origin for future brands by FutureBrand @RekaHaros

The combination of these four areas becomes a powerful

engine for the differentiation and the authenticity of a

brand.@RekaHaros

The more a brand is associated with a country of origin that has

1) unique products, 2) diffirentiated message, 3) an authentic experience

4) high standards of quality in its own category,

the more likely a consumer considers it.Fonte: “Made In” the value of Country of Origin for future brands by FutureBrand

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So, the 'Made in Italy' in our industry is especially important if our consumers are abroad!

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And in Italy? How can a brand benefit from its origin?

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P A T R I O T I S MDone locally

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Because the #1 brand in Italy is Tavernello!

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The real market is…

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This!Foto by Reka Haros

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The real competition is at this level

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Foto by Reka Haros

In 2014 the top 20 wine companies were

1. CANTINE RIUNITE & CIV 2. CAVIRO 3. GRUPPO CAMPARI 4. PALAZZO ANTINORI 5. MEZZACORONA 6. FRATELLI MARTINI SECONDO LUIGI 7. CASA VINICOLA ZONIN 8. CAVIT CANTINA VITICOLTORI 9. CASA VINICOLA BOTTER CARLO & C. 10. ENOITALIA

11. GRUPPO SANTA MARGHERITA 12. GRUPPO CEVICO 13. CANTINA SOCIALE COOPERATIVA DI SOAVE 14. GIORDANO VINI 15. LA VIS 16. COMPAGNIA DE' FRESCOBALDI 17. CONTRI SPUMANTI 18. SCHENK ITALIA 19. RUFFINO 20. COLLIS VENETO WINE GROUP

Fonte: http://www.mbres.it/sites/default/files/resources/download_en/Summary_wine_2015.pdf@RekaHaros

With a turnover ~ € 3 billion

Fonte: http://www.mbres.it/sites/default/files/resources/download_en/Summary_wine_2015.pdf @RekaHaros

Small businesses can not and should not compete

with the giants in the same battle field!

Foto: www.leadernetworks.com

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They need to do what the giants DO NOT do!Which is exclusive local storytelling!

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B R A N D I NGA viable option for the success of small producers

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Purposeful Branding

Is what adds value and differentiates

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A purposeful comedian does not think about how he can be

funny, but tries to understand why

people laugh.

Foto: www.flickr.com/photos/cayusa/ @RekaHaros

A purposeful shoe designer does not just consider what will look good on you, but how it

will make you feel wearing it.

Foto: www.flickr.com/photos/_sk/ @RekaHaros

A purposeful architect does

not just take into account the

orientation of the building, he/she

is also concerned about how people

feel inside.

Foto: www.zingarate.com @RekaHaros

A purposeful winemaker should

not only make good wines, but should

think about how its wines will make

people feel when and where they drink it.

Foto by Reka Haros @RekaHaros

The purpose of a producer

must not only be to sell wine, but to attract

and retain consumers.

Foto by Reka Haros

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A small winery can compete if:1. It puts the consumer at the center of its business strategy2. Creates a strong purposeful brand to differentiate itself3. Can clearly define its own market4. Maintains a flexible and innovative mindset, keeping pace with

the changing needs of consumers5. Doesn’t do what the giants do6. Has the courage to be different

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Thank YouReka Haros

Twitter: @RekaHarosEmail: harosreka@gmail.com

@RekaHaros