19 July 2018 - Events
With a heritage stretching back almost 200 years, the Zonin family heads Italy’s largest private vine growing and winemaking company. Now a new generation of Zonins is driving the next wave of growth and success for this long-established but always forward-looking business.
The Zonins have been vintners since 1821. From their ancestral home in Gambellara, in the province of Vicenza, the family has built a company whose name is now inextricably linked with vineyards and wine – in Italy, across Europe and internationally. Today, the business produces over 40 million bottles of wine each year, 80 percent of which are exported to more than 100 countries worldwide.
The expansion of Casa Vinicola Zonin’s operations first began in the 1900s under ‘Commendatore’ Domenico Zonin, a dynamic man who laid the foundations for today’s business. Francesco Zonin, company vice president, continues: “Domenico Zonin built the structure behind this company. But it really started developing when my father Gianni Zonin (Domenico’s nephew and Zonin’s current president) took over in 1967. At the start of the 1970s, it was virtually unheard of amongst wine producers to buy estates outside one’s local area. Gianni travelled the world and looked at the future of the wine industry. His gift was to see the potential in other regions and to move ahead of the market.”
“As well as buying up nine estates in Italy, in 1976 he bought the Barboursville Vineyards estate on the east coast of the US. At every stage, his approach was grounded in buying at a good price when others were moving out of the market. Gianni really moved this company from being a regular producer and distributor, to becoming a multi-estate business. Today, each vineyard is independent of the others and only the logistics of the business continues to be centralised here in Gambellara.”
Keeping it in the family
As the business has grown, so its structure has become more complex. In important markets such as the US, China and UK, it has set up subsidiary import and distribution companies to
look after local sales and marketing. More recently, the business bought shares in an importing and distribution company in Japan and further investments are planned in China and Brazil, both increasingly important markets.
Throughout, however, Zonin has remained a family business, and as Francesco says, that provides some real advantages in the wine industry: “The nature of a vineyard means that one must make long-term forecasts – looking 20 to 40 years ahead and sticking to whatever decisions are taken. Being a family-run business helps you to look and think long term.”
“Particularly in the food and drink industries, consumers are more ready to trust businesses like ours. We’re seen as genuine and authentic. Perhaps that’s because, as a family business, we don’t cut corners. Marketing and finance are not the ultimate drivers of everything we do.”
That said, succession between generations can be a difficult issue to manage, says Francesco: “The older generation needs to look to the future, it has to know when to step aside. And the younger generation needs to respect thepast. Each must understand their role.”As one of the seventh generation involved in running the business, Francesco is well aware of the depth of history behind him – and the demands that the future will bring: “My brothers and I have all taken separate roles in the business, as and when they needed doing. I deal with sales and marketing, Domenico deals with technical and production issues, and Michele deals with finance.”
It’s a structure that the family supports and balances by bringing in external management: “The need for external talent depends on the size of the family business. For us, it’s proved to be a smart move,” says Francesco. “We’re just the right size where formal management is required, but the family can still keep control of what’s going on. As we grew over the past 10 years, we recognised we needed to bring in new knowhow to help us. We were lucky to find the right people at the right time.”
Something for everyone
Zonin has a unique portfolio. Because it produces a range of mass-market, high-end and sparkling wines, the company can offer something to every level of distributor, whatever their needs. For distributors looking for something different, it’s a perfect combination.
Even so, Francesco continues, marketing and pricing is a very complicated issue: “Although Zonin is the largest family-owned wine producer in Italy, we still have just one percent of the domestic market here. And we’re small scale compared to some of the massive New World producers from North and South America and Australasia. In some new markets, China for instance, it’s very hard to make an impression and get noticed.”
Although Zonin finds it hard to compete on mass production techniques with some of the largest producers, it can and does compete on the art and science of winemaking, as Francesco points out: “We now employ the largest staff of oenologists and agronomists in Europe. Rather than using new technology, like the majors, we’re constantly refining and investing in our approach to viticulture. It might be more expensive, but it makes for a better end-product.”
A growing market
By using these improved techniques, Francesco believes there’s still space in the market for Zonin to double its sales. The ‘Magis project’ is a case in point. Francesco explains: “In partnership with other wineries in Europe, this project is based on producing good-quality grapes more sustainably. To make use of land and water supplies for the long term, you have to reduce the stress on the land as far as possible. It’s just like personal health – if you exercise, eat and sleep well, you will live to 80 or beyond.”
As the business now stands, Francesco is satisfied with Zonin’s current levels of holdings in Italy, where the company owns over 1,800 hectares of vineyards in some of Italy’s outstanding vine-growing areas. The focus now is further afield: “We already have one estate in the US and we’re currently looking at other opportunities there, as well as in other countries, including Australia and Chile. But we’re in no hurry and will wait for the right vineyard at the right price.
Francesco has also led the family’s expansion into social media: “Communicating with customers on social media has proven to be an important way for us to distinguish our brand and tell our story. People want to know who and where we are, why we make wine, and the values we put into making our wine. We can tell this story directly via social media, which is much less expensive than traditional media.”
While seeking to expand its share in established markets, and raise its profile in new ones, the company finds the ‘Made in Italy’ brand can be a powerful tool. But, as Francesco explains, the company cannot rely on this alone: “Other countries are moving quickly in the wine sector. And they’re very good at marketing their wine. ‘Made in Italy’ has strong connotations of land, history, lifestyle and so on, and we certainly leverage it to promote Zonin wines abroad. But in markets like China – where there are very few Italian immigrants or Italian restaurants – there’s still very little familiarity with the concept.”
New markets can also raise challenges around intellectual property: “Protection of origin is a difficult subject in the wine industry. Unlike Parmesan, for example, grape varieties can’t be protected and brand is more important. Defending the appellation – whether that’s prosecco, Barolo or Chianti – is really the government’s job, and they’re very active in this area on the industry’s behalf.”
Looking to the future
Growing the business abroad calls for continuous innovation, and the rapidly growing appetite for prosecco wines outside Italy provides some exciting opportunities. In the UK (where Zonin commands a 35 percent share of the prosecco denominazione), sales doubled in 2014, with 28 million bottles of the sparkling Italian wine sold for over £180 million. US sales rose 32 percent over the same period.
Already riding a wave of positive reviews for Zonin prosecco (a Gold Medal winner at the 2014 Los Angeles InternationalWine Competition), the company recently extended its range with three colour-coded prosecco editions – ‘Grey’, ‘White’and ‘Black’ (taking its inspiration from DOC regulations that allow prosecco producers to blend traditional Glera grapes with up to 15 percent from other varieties).
The new range is currently being rolled out in key international markets with the tagline ‘Dress Your Feelings’. Francesco continues: “Prosecco now outsells champagne in key markets such as the UK, US and Northern Europe. During the 2008 recession, price was an important factor behind its rise in popularity. But that’s not really an issue anymore – it’s no longer hard to find cheap champagne. I think one of the main success factors has been that producers have maintained consistency so well. It’s hard to find a bad-quality prosecco.”
The next two or three years will be crucial for the international success of prosecco, and it’s an area that Zonin is watching closely, as Francesco explains: “Up to now, champagne producers have been very good at controlling the market – whatever happens to availability, they’ve managed to ensure that the value remains fixed. Prosecco producers need to do the same. Last year, for example, the harvest was bad and that led to scares of a global shortage. It’s vital that we work on a long-term production strategy that can create value for all levels of prosecco producers.”
The next few years look set to be some of the most exciting for a family that’s built a global business on maintaining the quality of its products ‘from the vineyard to the glass’. Salute!