Marc Goodrich Of Banfi Vintners, Part 2August 3, 2012
In this second part of SND’s interview with Marc Goodrich, the Banfi Vintners COO looks at key brands in the portfolio and discusses how consolidation is impacting the industry, particularly for independent, family-owned players.
SND: For Riunite, is the current trend toward sweeter wines providing new opportunities?
Goodrich: At its peak in 1981, Riunite was at about 11 million cases and had a 25% share of the import segment. It’s at right around 2.4 million cases now, so it’s still a significant brand with a very strong consumer base. Lambrusco is far and away the major varietal in the line, but the Moscato offering has done very well in recent years. We now have a new product, Riunite Sweet, which comes in a sweet red and sweet white, priced like the Riunite Classics at $4.99. But unlike the Riunite Classics, Riunite Sweet is cork-finished and in a Bordeaux-style bottle and won’t have any effervescence.
SND: What are the latest developments with Bolla?
Goodrich: We have a new Bolla Moscato, which should provide significant incremental volume. In early 2009 we entered into a joint venture to purchase the Bolla brand with Gruppo Italiano Vini (GIV), which was producing it for Brown-Forman. One of the first things we decided with GIV was to change the packaging and upgrade the quality of the wine. (Banfi co-CEO) James Mariani personally worked with GIV on both projects. In September 2009, we had a meeting in Italy and did a side-by-side tasting of the existing product and the new blend. The difference was staggering. The new blend went to market by early 2010, and the results have been excellent. Bolla has grown in the last two years, hitting about 680,000 cases last year and expected to be over 725,000 cases this year.
SND: How are the fine wines of Castello Banfi doing?
Goodrich: The 2007 Banfi Brunello is a great vintage, priced at $60, the first to be produced at our Horizon Winery at Castello Banfi, a micro-winery we built inside that facility for high-end wines. The results have been exceptional. We’ve received some scores in the mid-90s.
SND: Has the slow economy affected your business over the last couple of years?
Goodrich: We’ve been very fortunate over this last four-year period, because we’ve got a diverse portfolio. But like everybody else at the high-end, we saw consumers become more cautious. The on-premise was severely affected by the financial crisis. But we had enough volume on the value side to more than compensate for that. So for that period, we were able to grow the business each year. We were willing to suffer softness so we could be properly positioned when we came out of this crisis. Last year, our high-end Italian business grew 10%, and the Brunello business was up over 20% in the first quarter of this year.
SND: What’s your take on recovery in the on-premise?
Goodrich: It’s rebounding, but the paradigm has changed a bit. Certainly prices on wine lists are considerably lower than in the days of conspicuous consumption. Restaurateurs are seeking the same thing as consumers—good value. And that doesn’t necessarily mean low prices. Whether they’re selling a $50 or a $100 bottle, they want that consumer to feel they’re getting some value for it. So the on-premise has reset to a very good level on pricing. I don’t know how long it will take to return to where it was. But the on-trade is always a great segment for us in terms of brand exposure. We have a very strong on-premise push for Frascati, for example, because it’s a great opportunity to get consumers to try something they might not otherwise select from the retail shelf. So it’s a very important vehicle for trial.
SND: Has retail consolidation had an impact on the way your company does business?
Goodrich: Yes. We have a 12-person specialty selling division that only calls on off-premise chains. The big retailers—Costco, Walmart, Sam’s Club and so on—have really changed the mass-market side of the business. Obviously, they’ve become increasingly demanding, which they can do because of the volume they generate. They want much more direct interaction with suppliers, so we’ve had to engage them at the corporate buying level. They’ve also become much more centralized, which has changed the paradigm. But when you work with these chains and others, like Safeway, Publix and Kroger, they can deliver tremendous results.
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