Made in Italy and the Pandemic: wine has resisted better than fashion, says Massimo Ferragamo

Wine and Fashion are two of the excellent Made in Italy products. The first is physically anchored to the territory, while the latter is linked above all to “know-how”, creativity and the Italian style. The two sectors differ immensely in terms of structure, dynamics, and moving business volumes, but they are equally strategic, and especially they represent the finest of the “Italian life style” that the whole world loves so much. Of course, they have not been immune, obviously, to the impact of the Pandemic, also because of the fact that both sectors are projected jointly on world markets. Nevertheless, of the two sectors, wine is the one that seems to have resisted much better, at least up until now. WineNews interviewed Massimo Ferragamo, of the historic Ferragamo family. His name is a symbol of Italian high fashion all around the world, but his heart belongs to wine, and particularly to Montalcino, land of Brunello, at Castiglion del Bosco, one of the most beautiful and antique Estates in the area (2.000 hectares, 62 of which are vineyards, all Sangiovese grapes, and 51 hectares of Brunello di Montalcino, boasting a production of around 250.000 bottles). Ferragamo acquired the Estate in 2003, where the production of the great Tuscan red merges perfectly with hospitality at the highest level (the Rosewood Castiglion del Bosco Resort, where past guests including Barack Obama and Paul McCartney have resided).
“It is not easy to say which of the two sectors, whether wine or fashion, has the right characteristics to start up again first, because they are two very similar, but at the same time, very different sectors. I would say that the wine world has resisted better on a global level”, explained Massimo Ferragamo, “even though it has had to deal with many challenges, such as distribution, i.e., physically arriving in people’s homes. In general, though, the wine sector has suffered less. I am referring especially to the Castiglion del Bosco products and the actions we have managed to take notwithstanding the Pandemic. I must say that it has been a lot more challenging for the fashion sector, however, because of the stores that closed first in Asia for a few months, followed by the stores that had to close in Europe and then in the United States. This definitely did not help the fashion industry. Now, however, in the countries where we have reopened, we are recovering well and I am sure that as soon as we can reopen around the world, we will return to work in a very positive way, even though it will take a bit longer in the HORECA, hotel, restaurant and catering channel. We have two quite challenging years ahead of us before we will actually return to seeing the results we were used to in 2019”.
There are many challenges ahead for the sector. The pandemic and the measures to contain it have heavily penalized companies like Castiglion del Bosco, which live off direct tourism and wine in Italy as well as around the world. We have, however, taken definite countermeasures, and sometimes even in a groundbreaking way. For instance, Castiglion del Bosco adopted the first practical application of the so-called “revolving pledge”; that is, a 4-year loan of 1 million euros (12 months of pre-amortization), fixed rate and repayment of interest and capital on a six-month basis, and wine “capable of becoming Brunello di Montalcino” as a guarantee, in an operation that involved the bank, Banco Popolare di Milano, PwC and the certification agency, Valoritalia. In order to set it up, “first of all, we needed our internal managerial skills”, explained Massimo Ferragamo, “a composite team that adds a significant experience in business and financial management to the skills of production, sales and hospitality, worthy of companies much larger than ours. Then the delicate work of building an absolutely innovative operation, with the support of the bank, Banco BPM, PwC and Valoritalia, began. The Banco BPM made available the first loan in the technical form of an inventory loan, of 1 million euros. In other words, a credit line guaranteed by fine wines in stock to support companies that need time to refine and enhance their products. This financial instrument is useful”, Ferragamo emphasized, “because it guarantees the credit, while leaving bulk wine at the full disposal of Castiglion del Bosco, allowing the vintages close to being put on the market to be bottled and aged. The ultimate goal is to support those companies like Castiglion del Bosco, that need time to refine and enhance their products and create value for the entire denomination. This Inventory Loan operation, based on the revolving privilege, is to date the only operation of its kind in Italy. The privilege appears to represent a simpler and more effective formula than the revolving pledge that was approved in the Decree of August 2020”.
Therefore, it is a pioneering operation in its own right. Meanwhile, however, the wine sector is looking to the future, where it will face new challenges, as well as structural and historical issues. The great fragmentation of the productive sector is, for instance, an example. Up until now, assuming that more or less everyone has resisted more or less well, each company, large or small, has had to deal with its own history, uniqueness and different ways of reacting to external stimuli, whether positive or negative, it consequently, makes one wonder just how much longer, on the whole, the sector will be able to support a framework like the current one. “Unfortunately, I believe that on one hand, many small producers will have to close down due to this very serious crisis”, said Massimo Ferragamo, “because if they don’t have outside help, it will be a real problem to survive for any length of time. On the other hand, looking for the positive side, this crisis could start a virtuous path to consolidate the wine sector, creating more and more employees, but also resolving structural defects. I’m referring specifically to logistics and transportation as well as the inefficiencies in the communication and marketing sector as well as for the Italian wine brand around the world, which have tormented our sector for years, and which instead could possibly find a solution driven by this crisis”.
In the meantime, one of the things the Pandemic has certainly pushed ahead is digitization, even in the wine world, plus the growth of “Wine Clubs”, managed directly by individual wineries. Castiglion del Bosco and its “1100 Wine Club”, has set up a very cutting-edge offer. “I am extremely proud to say that we were one of the first in the world of wine to create a Wine Club for our members not simply to guarantee them a discount on the purchase of our wines”, pointed out Ferragamo, “which is a very common format in the various wine clubs all over the world. Instead, ours is a real community of wine lovers and excellent wines, their identities and territories, based on exclusivity and interpersonal relationships. Our Wine Club is a real “place” where we can share our passion for wine and the Tuscan lifestyle with our members. We have, therefore, created a lounge for them, inside the winery, in an elegant and welcoming design that is truly one of its kind, where each of them physically has their own space in which to store their own collection of fine wines (all wines, not just ours) in our safekeeping, at a controlled temperature and moisture. We have called this room the “Member’' Cellar”, and it is the heart of our “1100 Wine Club”, where our members can come to whenever they want, there are no limits. They can organize their dinners and private events, special tastings or even just enjoy a glass of good wine in the company of their family and friends, in a place that is pleasant to the eyes and the spirit. It’s like a second home in Tuscany, an extended family at Castiglion del Bosco, which also belongs to them. During the year we organize exclusive events and tastings for our members inviting prominent personalities from the wine world (producers, sommeliers and Masters of Wine), dedicated to discovering the most renowned wine regions in the world, or the still little known niche companies. We also organize wine dinners and events not only in Castiglion del Bosco, but also in prestigious venues that often are suggested and promoted by the members themselves, or hosted by the members in their homes. During the months of lock-down, we have organized virtual tastings for members who have not been able to travel and visit us, directly in their homes, offering different themes and wines, so as to keep on discovering and having fun together doing what we like to do best - taste and appreciate a glass of good wine together. These virtual events were highly appreciated and certainly shortened the distances and the loneliness”.