Allegrini 2018

With diversification and focusing, Cavit closes a 2020/2021 balance sheet at 271 million euro +29%

The reorganization of Cesarini Sforza, La-Vis and Cantina di Cembra, Casa Girelli and Glv subsidiaries works. The comment of CEO Enrico Zanoni
Cavit closes 2020/2021 balance sheet at € 271 million +29%

A strong presence on several channels, in several countries and with different products and for increasingly specific targets, but also an internal reorganization of a complex company system, guided however by simple concepts, such as focusing on the specificities of each individual reality, and synergies of transversal services and exchange of know-how where appropriate and feasible. This is the line of action taken by Cavit, one of the most important Italian wine producers, a second-level consortium that groups together 11 cooperative wineries (Roveré della Luna, Cantina Rotaliana, Cantina di La-Vis e Valle di Cembra, Toblino, Cantina Sociale di Trento, Cantina di Aldeno, Vivallis, Agraria di Riva del Garda, Cantina d'Isera, Cantina Sociale Mori - Colli Zugna and Cantina Sociale di Avio) and controls four different companies such as Cesarini Sforza, a Trentodoc sparkling wine griffe, Casa Girelli, specializing in private labels (both 100%), the commercial Glv (80%) and the German winery Kessler Sekt & Co, the oldest sparkling wine producer in Germany (50.1%), which translate into strong growth in the group's 2020/2021 consolidated balance sheet, at € 271 million (+29%), achieved both through organic growth and the 12-month consolidation of recently acquired companies. With the Cavit Group's net financial position strengthened (to €38.2 million as of May  312021) and back to pre-acquisition levels, despite the financial resources used for the transaction (when in December 2019 Cavit acquired Cesarini Sforza and Casa Girelli, and Cantina di Lavis e Valle di Cembra joined the membership of Consorzio Ravina di Trento, ed.). An important and significant result, therefore, for a reality that brings together 5,250 winegrowers and represents 60% of the total area under vine in Trentino.
In detail, in the Horeca channel, despite the prolonged closure of bars and restaurants and the consequent reduction in “out of home” consumption, there was a decidedly positive trend in the premium sparkling wine segment with +27% for Altemasi Trentodoc, Cavit’s line of excellence in the Metodo Classico, but excellent results were also achieved by Cesarini Sforza Spumanti, which with its Metodo Classico Trentodoc recorded sales of 5.7 million euros in both the Horeca and large-scale distribution channels, marking an overall growth of +30%. The German subsidiary Kessler Sekt & Co KG, despite the downturn in the Horeca channel in which it is mainly concentrated, closed the fiscal year with a turnover of approximately 9.5 million Euro, maintaining its position stable compared to the previous year and strengthening its brand reputation.
In the international markets, which today account for 75% of the Cavit Group’s turnover, the group emphasizes that the health emergency has had the same consequences as those observed in Italy in terms of changing lifestyles and consumption, pushing domestic consumption and penalizing the “out of home” channel. The Cavit Group’s performance on the North American market (the United States and Canada +25%), historically the Consortium's primary export destination, was excellent, where overseas consumers rewarded the most established brands, generating results for Cavit labels that outperformed market trends.
Good results were also achieved in several other export markets, such as Belgium, the Netherlands, Sweden, Denmark, Germany, the Czech Republic, Switzerland, Austria and Russia, while there were problems in some specific markets, such as China and the United Kingdom. In Asia, unlike in the West, restrictions on the movement of people and the widespread smart working regime have led to a net loss of revenue. In Asia, unlike in the West, restrictions on the movement of people and the widespread smart working regime have led to a net loss of turnover, which has not been compensated for by increased take-up in large-scale distribution. On the other hand, in the UK, the Brexit phenomenon has caused a sharp drop in demand and numerous difficulties in logistics, which has been penalized by the criticality of transport services.
But, on the whole, “these are particularly good financial results”, commented managing director Enrico Zanoni to WineNews, “which have come about thanks to the way Cavit is structured: great diversification of countries, sales channels and product lines that have placed us in favorable conditions given the external context. The great transfer of consumption from outside the home to the domestic sphere has helped us, as we are well present in large-scale distribution in Italy, the USA, the UK and the Netherlands, with very significant growth. With regard to the subsidiaries, it must be said for the sake of fairness that they consolidated 5 months in the past financial year, while in this consolidated financial year they have a 12-month result, so there is also a technical growth effect. But in any case”, Zanoni emphasizes, “Cesarini Sforza has returned to significant growth, and having given Cesarini Sforza products the opportunity to be sold in large-scale distribution through the Cavit network has been a boost to growth, while in the on-trade it continues and will continue to be sold by a specific sales network, which is the same as that of La-Vis and Cantina di Cembra. In other words, the Glv sales force, which distributes Cesarini Sforza, La-Vis and Cantina di Cembra, on which we have rationalized and focused our efforts, with the sole objective of creating value for those three brands, whereas before we did more third-party work and other activities that we are removing in order to focus more on the sole mission of creating value, with fairly positive results. Casa Girelli, which has its own fairly autonomous management, focused on private labels”, explains Cavit Zanoni, managing director, “is still in a strong reorganization phase, both in terms of the product portfolio and the modus operandi and production, with a horizon of at least three years. The ultimate goal is to continue its specific activity, but with a strategic vision that can generate more value through more partnerships, more innovative products, and find its place in the complex world of large private label producers. The philosophy of the Cavit group as a whole is to make synergies where it makes sense to do so, and not at all cost, while maintaining business focus. It is a reorganization made according to simple principles: understand what the highly specific areas of each reality are and ensure focus and autonomy, and give cross-sector services where synergies can be had and expertise transferred”.
A clear vision, just as Cavit’s future is clear, despite a better picture of the pandemic than in the recent past, but not as much as was hoped. “On the one hand, we continue to pursue the objectives of diversification and segmentation by channel, product and country, as we have done over the last 10 years”, explains managing director Enrico Zanoni, “so much so that we are increasingly present in the markets, with lines dedicated to the various channels. Then there is sparkling wine, primarily Trentodoc, but also the charmat and sparkling segments in which we have invested and continue to do so. The third objective is to consolidate the acquisitions from an organizational and structural point of view. So we are quite clear where we want to go, in a context that is anything but simple. The increase in the cost of materials, for example”, Zanoni continued, “is at a level we did not expect, as are the supply difficulties, so in the short term we will be under great pressure. I don’t like working in such an inflationary context, there is tension on raw material prices that we cannot fully discharge onto the market. I have this concept of 1/3 per head between producer, distributor and consumer, to try to balance the situation, but in the short term there will be some problems with margins, and not only that. In the medium term, on the other hand, we need to monitor the acceleration of changes in consumption styles in countries such as the USA, the UK and Canada, where elements that can determine the success of a brand or a type of wine are changing much more rapidly than in the past. Today's truths may not be tomorrow’s, and always have been, but today it happens much more quickly, so knowing how to read between the lines of markets and trends becomes much more important. However, the market is recovering, it has been a very positive year for us as a company, and we are looking to the future with reasonable confidence, but we must not lower our guard or give in to excessive triumphalism, because there are still complex dynamics, especially in certain markets such as Asia, where the results we expected have not been achieved”.
But the solidity of the Cavit Group, which, at the assembly, confirmed Lorenzo Libera, in his second term of office, as Chairman for the next three years, is a more than comforting basis for looking to the future: “we are particularly satisfied with the results achieved which, although in a complex and difficult context, have once again guaranteed good remuneration for the wines supplied by member winegrowers this year”, said Libera. “In a critical period such as the one we have been experiencing, Cavit has shown how crucial its role is for the entire wine production chain in Trentino. Our cooperative model, which is more valuable than ever at this time, has the mission of supporting the first-class social wineries and the winegrowers associated with them, regardless of the contingent situation”.

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