Interview: Marchesi de’ Frescobaldi CEO Giovanni Geddes FilicajaNovember 20, 2014
With a prestigious Italian portfolio including Frescobaldi, Ornellaia, Masseto, Luce della Vite, Danzante and Attems, Tuscany-based Marchesi de’ Frescobaldi has posted impressive sales growth recently, including a 19% jump in the U.S. market last year. Globally, the company’s wine sales rose 4.3% in 2013 to €84 million ($105m), on volume of about 10 million bottles, and it’s projecting a 6% global advance this year. In the U.S., which accounts for around 15% of revenue, Marchesi de’ Frescobaldi’s wines are handled by Folio Fine Wine Partners. Shanken News Daily senior editor Daniel Marsteller recently met with company CEO Giovanni Geddes Filicaja to get an update on progress and discuss the group’s plans for the year ahead.
SND: How has your U.S. business evolved recently, and how is it performing?
Geddes: The U.S. is going very well now. We’ll be up about 7%-8% this year. The slow but sure restructuring of (our importer) Folio has made it much more powerful in terms of sales and marketing, so we’re very pleased with that. The new CEO, Paolo Battegazzore, is someone I’ve worked with, having hired him in 1998 as general manager of Luce della Vite. He worked with me until 2005, when he moved to the U.S. to join Folio, and now he runs the business. Folio has become a strong company, without too many brands, which is an important factor. We want to keep all our brands separate and distinguished from one another (from a marketing perspective). What we don’t want is the piggyback route, where you say, “If you take that, we’ll give you this,” and so on. You can do that within a given brand, but not overlapping different brands in the portfolio. Usually the one you’re trying to push then loses its image and recognition.
SND: Which wines in your range are driving growth in the U.S.?
Geddes: In the last three years we’ve done very well with Luce della Vite (about $105 at retail). Ornellaia ($240) and Masseto ($650)—the most expensive Italian wine—are all on allocation, and they’re growing steadily year-on-year. Nipozzano ($25) is widely distributed, and is in some of the big chains. In the on-premise, the fine dining segment is doing well. As much as 70% of wine sales in the U.S. on-premise are by-the-glass, and we participate in that with some of our brands, like Lucente ($30 at retail) from Luce della Vite, Nipozzano from Frescobaldi and Le Volte ($30) from Ornellaia. We’re doing a very good business there.
SND: How do you see the U.S. situated as a market for luxury wines, compared with emerging areas like China?
Geddes: China went crazy for top-end Bordeaux in recent years, but a lot of it was based on financial speculation. If you look at the market of actual wines being consumed there, about 90% is still Chinese wines, with imports only around 10%. There’s a lot of talk about China, but in reality it’s still very small. Japan is still our biggest market in Asia. By contrast, the imported wine market in the U.S. represents about 27% of a very large wine market overall, with Italy of course the largest player by volume, and about equal to France in value terms. I’m a firm believer that the U.S. will stay the most important wine export market for producers like ourselves for many years, especially for expensive brands.
SND: Do you have any new projects on the horizon?
Geddes: We will be building two new wineries, one for Masseto starting next year, and one for Luce, probably in two and a half years’ time. We’ve also just expanded the central winery of Frescobaldi. And we’ll keep investing in the vineyards. We now have about 1,200 hectares (3,000 acres) planted, almost all in Tuscany, which is about double what we had 10 or 15 years ago. We plan to keep investment spending at about $10 million a year through 2018. We’ve also formed a joint venture with a Turkish group to open a new restaurant in Mayfair in the center of London this month. The site used to be a Cipriani restaurant. The name is Ristorante Frescobaldi London. That will be the flagship of the concept, and we’re looking at New York as possibly the next location.
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