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ZONIN WINES' FOREIGN STRATEGY: OBJECTIVE USA
More than just a family, it is a dynasty: for seven generations, connected by Veneto, their land of origin, the Zonin family controls the most important private wine producing company in Italy, as well as being one of the main in Europe. The story of the Zonin wine yards is the happy proof that “generational heritage” is not necessarily a traumatic moment in the life of a company. At the side of president Gianni Zonin and his brothers, the new generation is now lined up to take on more responsibility and share experiences made in other continents. We asked Gianni’s son, Francesco Zonin, who was named vice-president of the company at the end of 2006, to give us an overview of Zonin’s international operations.
In which foreign markets can you enjoy the Zonin family wines?
Our wines are present in 89 countries and in all the continents. The strategic sales centre remains in Italy, in the historical location of Gambellara. The export headquarters division employs 35 managers operating in respective markets. In 2007, the percentage of exports on total sales was 37%, but in 2008, for which we are projecting total revenue of approximately 80 million Euros, this percentage will reach 40%.
Do you serve any foreign market directly by operating a local company on site?
Only in the United Kingdom and the United States. We decided to set up two companies to coordinate importing and direct distribution: Zonin UK, headquartered in London, and Zonin USA, located in Charlottesville, Virginia. The United States, notwithstanding the penalizing currency exchange, are our main end market: it is a trend-driven market, uniformly growing in number of consumers and pro-capita spending, which has not been negatively affected by the strong euro. Sales in the United Kingdom, second largest market by volume for Italian wine exports, seventh export market for us, have been more stagnant. Individual consumption here, unlike in the United States, remains stable over the years. The same can be said for the average price of a bottle of wine. In England, our first-phase objective is to see our wines - including Zonin-labelled wines from Veneto and wines from our 10 family farms in Tuscany, Piedmont, Sicily, or Friuli – lined up in the most famous 200-300 restaurants in London.
What about the United States? Different plans, I guess…
Certainly. For a dynamic country and a country destined to become the largest wine market in the world, we project important numbers: The mid-term objective is to reach 50 million dollars. The fact that annual revenue has doubled for three years in a row allows us to hope for good.
Beyond the US and the UK, which are other end-markets for you? What about the Far East?
After the United States, which are our fist market, our major end-markets are in Europe: Germany, Belgium, and Sweden, which comes in fifth. Australia comes in fourth place and Japan is sixth. China is our primary market in Asia: we make up 2.9% of total Italian wine exports to Japan. Second in Asia is South Korea, behind China, today 18th in total sales. We are satisfied with our results in China, where we pioneered our products over ten years ago. After great results in the first few years, namely in 1996 and 1997, we consolidated our sales in the last few years, thanks to partnerships with other European wine makers. Currently, our market share in China, excluding Lambrusco wine, is 6-7% of imported bottle wine from Italy.
Is it possible to approach so many markets with a common sales strategy? Is it sufficient to use the “Italian wine” slogan to easily penetrate a foreign market?
No, it’s definitely not that simple. Our strength in sales is also to manage the good image and notoriety of our wines. This objective is achieved through marketing and communications strategies developed ad-hoc based on the characteristics of each single country and sometimes of each single consumer niche.
Let’s take a step back. Earlier you said that the US company is headquartered in Virginia: that state hosts the only Zonin farm outside of Italy: 500 hectares, of which 92 are used for wine production, in Barboursville. Why did you decide to produce wine in the United States?
Each Zonin family company is self-sufficient: it owns at least 100 hectares of grapes, a wine-making cantina, a bottling line, and a dedicated oenologist, assisted by an agronomist-wine expert. Production autonomy is the key principle applied at each location. Nothing stops, for example in this case, the single wine company to decide to produce wine in the United States exclusively for the American market. Both distribution and production are subject to logic of global marketing.
So, is it possible to envision a positive globalization of the wine market?
Certainly. Our approach is to marry autonomy of the wine farms with the close link between wine and territory and with a proper appreciation for wine types that can be achieved only by using quality autoctone grapes. We aim to grow autoctone grapes through 75% of our 1,800 hectares of land by 2010. This goal is for both Italy and the United States.