Cavit, positive financial statement and remuneration in line with pre-Covid times for Trentino giant

To see a financial statement that holds, and even grows, albeit slightly, is already a positive thing these days in the wine world. To see that the remuneration of members, which, for a cooperative is the first objective, remains at pre-Covid levels, despite rising production and management costs and margin compression, even more so. And it moves on these two tracks the financial statements of the Trentino giant Cavit, which, in the past few days, in Trento, at an assembly, in the presence of renowned economist Carlo Cottarelli, approved the consolidated financial statements of one of the most important groups in Italian wine (covering the financial year 2022-2023, ending in May 2023), closed at 267.1 million euros, a slight increase (+0.9%) over the previous year.
Achieved, as has been pointed out, thanks to “flexibility and resilience”,to a long-standing strategy based on diversification by product lines, sales channels and geographic areas, and with an approach for growth that looks carefully at sustainability and the well-being of the territory in which Cavit insiste, which brings together more than 5. 250 winemakers covering an area planted with vines of more than 6,350 hectares, which is more than 60% of that of the entire Trentino region, with an export share of 76% of the total, with the brand being the most popular for Italian wine in the US. More in detail, looking at the financial statements of what is, in fact, a second-ranking consortium, the parent company Cavit Sc, “after the exceptional 2020-2021 financial year (which had marked a +20% surge over the previous year in the lockdown), turnover-as predicted in the budget-recorded a moderate contraction (-1.9%) over the previous year. Results that remain, however, significantly higher than the pre-pandemic period (+14% over FY 2019-2020)”.
The positive trend of the group’s sparkling wine lines continues, with satisfactory results for the premium brand Altemasi Trentodoc, and sustained growth for Cesarini Sforza Spumanti and Kessler Sekt, which all benefited from the return of out-of-home consumption, the good performance of the sparkling wine sector and, in the case of Cesarini Sforza, the distribution expansion achieved thanks to the support of the parent company: in particular, sales of the German subsidiary Kessler Sekt & Co KG. (the oldest producer of sparkling wine in Germany, with a history of nearly 200 years for quality sparkling wines of the Classic and Charmat methods) ended with 13 million euros (+10% over the previous year) and net assets 4.9 million euros.
In addition, the group’s shareholders’ equity is growing steadily and stands at €113.5 million, confirming Cavit’s solid capitalization. The net financial position also remains largely positive at €24.5 million, above the pre-Covid figure (FY 2019/2020), which was followed by the two-year period of significant increase in sales 20/21 (+20%), achieved by the parent company Cavit, a figure confirmed in the following year, which increased the size of the net financial position in the previous two-year period.
As mentioned, one of the keys to success is market differentiation. “Exports continue to account for more than 76% of turnover, despite the fact that in all the main importing countries”, Cavit explains, “there has been a generalized decline in demand. In particular, in North America, which represents the most important wine consumption market in the world and the main outlet market for Cavit, the contraction in wine consumption is gradually taking on a structural character as a result of the changing tastes and consumption styles of the new generations, which show a progressive disaffection preferring other types of products such as Spirits, Ready to Drink and new types such as Hard Seltzer. In the United States, as it did last year, the Cavit brand continued to react better than the market, with +1.9% in value compared to the market average of -1.9% (source: Nielsen data), further confirming its leadership position with the Pinot Grigio grape variety”.
The slowdown in wine consumption is also confirmed in European markets, where sustained inflation and rising interest rates that have drained consumers’ spending power. The United Kingdom, Germany and the Netherlands continue to lead the ranking of outlet countries on the old continent for Cavit, which presides over all channels, both large-scale retail and horeca. In Asian countries, the weak sign of recovery recorded at the beginning of 2023 was thwarted by the negative international economic situation, in markets such as Japan and South Korea. A separate note deserves the Chinese market, which continues the negative trend of recent years, with no signs of a counter-trend in the short term. In Italy, the second largest market for the Cavit Group after the United States, brand loyalty and product quality have enabled it to maintain its positions for a total turnover that continues to represent 24% of consolidated sales.
“We can be satisfied with the level of liquidations that, once again this year, we were able to guarantee to our member wineries, despite the downturn in consumption and the strong impact of energy and raw material costs”, says Lorenzo Libera, president of Cavit. “Our cooperative model is based on a business network that combines the dedication of the winemakers, who are committed to sustainable practices, the expertise of the wineries and the decisive support of the Cavit Consortium: in these difficult times, this integrated approach has been more fundamental than ever, ensuring cooperation and stability regardless of the contingent situation”. “Ability to adapt and flexibility have allowed us to maintain a more than satisfactory result in a complex scenario”, commented Cavit managing director Enrico Zanoni, “which has seen the concomitance of two contrasting phenomena: the drop in consumption and the simultaneous increase in costs. Important challenges await us in the coming years. The strong capital and structural base is a key asset for our group, on which we will have to continue to develop value, further enhancing our capacity for innovation and ability to adapt to complex phenomena with readiness and agility”.