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Allegrini 2018
THE INTERVIEW

“Great attention, but don’ t panic. I don’t believe in revolutions in wine,” Renzo Cotarella says

At WineNews the vision of the present and the future post-COVID of the CEO of Marchesi Antinori, the No. 1 Italian wine company

The Italian wine fleet is going through, like every other sector, the COVID storm. A storm that is still difficult to overcome, but it must be faced with the awareness that a shipwreck can be avoided, which in too many, perhaps, consider inevitable. “Great attention, in other words, but absolutely no panic, because something will change, but I don't believe in revolutions of wine consumption patterns”. This is the message that comes from Renzo Cotarella, one of the most experienced managers of Italian wine, and “helmsman” (managing director) from the flagship of Italian wine, the Marchesi Antinori, the most important private reality of Italian wine, the embodiment of a family history of 26 generations, now led by Albiera Antinori, with his sisters Allegra and Alessia and the “contemporary Leonardo da Vinci of Italian wine”, Piero Antinori, with a turnover of over 222 million euros in 2019, 2. 937 hectares of vineyards with estates in the most important territories of Italy (a galaxy which includes Tenuta Tignanello, Badia a Passignano, Pèppoli, Antinori in Chianti Classico, Pian delle Vigne in Montalcino, Tenuta Guado al Tasso in Bolgheri, Tenuta Montenisa in Franciacorta, Le Mortelle in Maremma, Fattoria Aldobrandesca, Tenuta Monteloro and La Braccesca in Tuscany, Prunotto in Piedmont, Tormaresca in Puglia and Castello della Sala in Umbria), and a crazy profitability with a ratio between ebitda and turnover of 47.5% (according to the analysis of the economic journalist Anna Di Martino).
“It is clear that there are critical conditions - underlines Cotarella - especially for realities like ours that are very oriented towards on-trade and top of the range, because the catering industry in Italy and around the world (which, on the whole, for Antinori is worth more than 60% of sales, editor's note) is in great difficulty, especially, considering our country, in the centers of cities that live on foreign tourism, which is not there now, and with the consumption slowed down also by the massive use of smart working. However, having said that, at least from our observatory, the forecasts of -35/-40% at the end of the year for the sector seem to me excessive in negative. Certainly, 2020 will not be a normal year, and with the great uncertainty that there is not only on the duration of the pandemic, but also in its management, it is difficult to make forecasts, but I think that we can settle between -15% and -25%”.
A hard blow, certainly, but not untenable. “Also because the pandemic was an unforeseen event, of course, but those who make wine and agriculture know that there are risks, and sometimes a frost is enough to cut 20% of the production of a vintage, and consequently the turnover. These are situations that must be managed, with great care, but without panic, especially when you have a solidity not only economic, but also of brand and management as Antinori, also thanks to a family owner who has never drained resources to the company, but left everything inside and always reinvested the profits. And that has also built a management team that shares 100% of its values”. The near future, of course, will depend on the markets, underlines Cotarella. “The monopoly ones work well; it will be necessary to see how quickly Asia will recover and to understand how the situation will evolve in the USA, where all in all consumption in quantity is not so different from last year, but, at this stage, the values suffer, because the mix changes. We are fortunate to have a strong brand and several wines of the highest level even in significant quantities, from Tignanello to Solaia, from Brunello di Montalcino to Chianti Classico wines, from Matarocchio di Guado to Tasso, to Bolgheri, to Cervaro della Sala del Castello della Sala, to name a few, and this helps. Il is more difficult at this stage, but one must look into perspective with confidence and optimism. In our particular case, then, paradoxically, it will be an opportunity to replenish some stocks of these great wines, given that for years we have been experiencing a structural lack of product compared to the demands of the market”. According to Cotarella, then, this phase of difficulty brought by an unexpected event such as the pandemic can be exploited. “In the wine business, just as one thinks of the future when planting a vineyard that will begin to give wine after several years, the same must be done when one thinks of the future of a company. I believe that this situation will certainly lead to some change in our habits in the short to medium term, but not to upheaval. At the restaurant, for example, we have gone so far for the pleasure of doing so and I do not think this is going to change. How it will not change in a structural way the management of the market in the long run, and I believe that the company-agent-customer chain is not in question. Certainly, it will change a little bit the role of the agent, who will have to be only a seller but more and more a promoter of the brand and wines.
There is no doubt that certain processes such as the growth of e-commerce, which was already underway, have accelerated significantly but in a direction that was already marked and that the pandemic has fostered. I for origin, Piero Antinori for passion and conviction, we are very attached to agriculture, which has its rules, its rhythms, and from this derives the conviction that things never change structurally suddenly but always gradually. This crisis will certainly require us to work on making processes more efficient and simpler. Customer service will be even more central and competitive, as will the quality and personality of the products.
Certainly, the recovery of the sector depends both on the foresight and strength of the companies and the support of the State. And on this, Renzo Cotarella’s vision is clear. “It must be premised that the wine market is a complex and articulated thing, often difficult to understand, and one cannot think that a measure that goes well where up to 500 quintals per hectare are produced to make generic wines can also serve in a reality like that of Brunello di Montalcino where we are talking about 70 quintals per hectare, to name two extremes. It must certainly be recognized that it is neither easy nor trivial to manage the sector. Having said that, between the 50 million euros for distillation and the 100 million euros for green harvesting made available specifically for the sector, all I am saying is that this is less than 1% of the turnover of a sector that is worth 12-13 billion to production, and that is a number that comments on its own. To make a joke, there are more resources for the “push scooter bonus”. But beyond that, more than production support, I believe that we should help consumption. The reduction of a few VAT points for a limited period in favor of wine consumption and catering, for example, I do not think it is impossible to do. And then there are considerations to be made about specific measures. Distillation takes some generic product off the market, generates a minimum of liquidity even if we talk about minimum figures. But the green harvest as it is, I think it is useless, especially in the top production areas. It is a measure that producers who make quality already adopt independently, but they do so to guarantee the best quality, not to produce less. Nobody throws good grapes capable of giving great wines just to produce less.
Having said that, more generally speaking, I believe that we must take advantage of this moment and also of the many economic resources coming from Europe, partly in debt partly non-refundable, for a structural modernization of our country. Companies must be put in a position to carry out their activities in the best possible way, that is to say, to produce and make the market to generate income and work. Schools must once again become central in formation and education and thus create the future ruling classes. Simplification must be real and not just announced and ethics must be central in the management of the country and the company. According to some observers, however, the liquidity crisis that many companies are experiencing could also lead to an acceleration of the phenomenon of acquisitions and mergers of companies that has already grown a lot in recent years, in Italy and beyond. “It is possible, but it is also a risk, as I see it. In the sense that Italian wine is also interesting because it is made up of a multitude of companies large and small, and an excessive concentration is not a positive phenomenon. And it is not even in the structure of Old World wine, also because our biggest realities certainly do not reach the size of giants of the new world as they can be Gallo in the USA or Treasury Wine Estate, to give examples. It is essential to overcome this liquidity crisis; companies must be supported in this because losing realities, even if small but important, would be an impoverishment also for the value of certain denominations. It is clear that there are obvious difficulties; many small and medium/small wineries live a lot of tourism in the wine territories that is currently missing. Then, there are realities where the passion for this fascinating world has pushed some entrepreneurs to invest in debt in a significant way, and in a situation like this it is natural that there are more difficulties. I also say that more support would be needed for small companies, perhaps through the Consortia, thinking above all about issues such as liquidity, but also about the physical spaces that are needed in the cellar or for storage. Now, however - concludes Cotarella - is the time to think like ants, rather than cicadas. As for a possible expansion of Antinori we are not, in principle, interested in new acquisitions. If the opportunity of life happens, we will be forced to reflect on it. However, we already have a lot of projects in the pipeline, and a lot of potential to be expressed”.

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