Bruno Berni of CFI Group discusses the fragmented Horeca sector, the need for accurate data management, and the role of trade marketing. He emphasizes the importance of multichannel strategies, managing consumer feedback, and engaging younger generations to ensure the future of wine sales.
In the fascinating world of wine, distribution challenges and monitoring channels are highly relevant and current topics. We had the pleasure of discussing these issues with Bruno Berni, Business Development Manager at CFI Group, who provided an in-depth and insightful overview of the dynamics that wine companies, and beyond, face in today’s distribution landscape.
Berni explained how, despite larger companies being able to gather significant data on retail markets, the Horeca sector remains more complex due to its fragmentation and the numerous variables at play. He highlighted the need for tools and models that allow better tracking of product flows, and emphasized the growing importance of trade marketing and a physical presence on the ground.
The conversation also touched on crucial aspects such as the management of contact databases, often underestimated, and the importance of gathering direct consumer feedback. We explored the current dynamics and trends influencing consumer preferences, as well as the challenges and tools necessary to engage younger generations in the world of wine.
A valuable testimony for the Amorim Wine Vision project, offering a qualified and comprehensive perspective on the complex dynamics of wine distribution, the critical importance of effective data management, and an active presence in the field to capture the market and meet consumer expectations.
What are the main challenges that wine companies (and others) face in monitoring distribution channels, both retail and Horeca?
In the retail and GDO world, minimally structured companies can gather data on the market (sell-in, sell-out, market shares, etc.). However, it should be noted that, as we go down to smaller businesses, there is little attention paid to investing in these aspects.
Certainly, the situation becomes much more problematic in Horeca, a key sector since out-of-home consumption in Italy represents 30-40% of wine sales. There are two factors that determine this context: the first concerns the vast fragmentation of the market in terms of consumption points, with a high level of variability (from beach bars to mountain huts). The second factor concerns the fact that Horeca is a long channel, involving operators, agents, and resellers who often make it difficult to capture the precise flow of wine sales.
I believe that developing retail-like tools in Horeca is unlikely in the coming years. What some companies can start doing is equipping themselves with tools and models that help them understand where their products end up, for example, related to sales by territory, agent, and consumption point.
Furthermore, in the wine world, there is an excessive proliferation of sub-brands. Many wineries, in an attempt to differentiate themselves and occupy market niches, have created small brands that sell 1,000-2,000 bottles. This creates even greater difficulty in monitoring sales and flows and makes it very hard to have commercial references capable of offering the right product to the right networks.
A salesperson selling wine to a venue typically has about 20 minutes to present their products. Therefore, there’s a risk of doing excellent work on paper but then delegating the sales to multi-agent salespeople who don’t have the time or capacity to properly present the product. In essence, we’re putting great quality products out there but not properly controlling the chain that gets the product to the consumer, in the right venue, at the right price.
Today, it’s no longer conceivable for a winery not to rely on a trade marketing professional to go on-site, propose products to commercial networks, and observe how those products are consumed in venues.
It is necessary to develop multichannel systems which, practically, means selling in the retail channel, Horeca, and also through events, training, trade shows, tastings at consumption points in venues, wine shops, shopping centers, and restaurants. The success of my product is no longer built exclusively in the cellar but depends on my physical presence in the market.
It’s fine to have mixed models, but you shouldn’t abandon the cellar; it’s crucial to build direct relationships with the market, study it, and also follow it in person.
What methods would you recommend to a wine company to define and classify consumer satisfaction in different distribution channels?
Here there are two underdeveloped and overlooked areas, particularly the management of contact databases and customer feedback.
Companies have direct relationships with consumers, for example, those who buy wine directly at the winery or attend events. All wineries have a database of contacts that is entirely unused, nobody checks and manages that asset, and it’s often easy to find wrong or outdated emails, missing digits in phone numbers, incomplete data, and other such errors.
Regarding customer feedback, it’s a seemingly trivial issue, but it requires organization and professionalism to contact consumers directly, ask for their personal opinions over the phone, and collect responses. People enjoy giving their opinion, but how many companies put effort into this activity? Very few—at most, they send a newsletter or Christmas greetings.
What are the key performance indicators that wine companies should monitor to evaluate their investments in different distribution channels?
The first thing to keep in mind is positioning; if I want to sell a “value-for-money” product (with a good quality-price ratio, which can be consumed at 360°), today the strategy must be multichannel, and trade marketing and communication investments must take this dimension into account to oversee all channels. When talking about quality-price ratio, it’s important to also focus on packaging. We even see it with discount retailers, who have significantly improved their aesthetics and usability, sometimes surpassing even traditional retailers.
From your perspective, what are the main dynamics and trends that determine consumer behavior and preferences during wine purchases?
I don’t want to say trivial things, but the trend is towards lighter wines. The growth of white wines can be explained by this trend, the need for a simpler, lighter product paired with less complex dishes. Another trend is the rise of sparkling wines because, alongside traditional products, we now see the Metodo Classico sparkling wines like Alta Langa that, just a few years ago, were not even presented in Piemonte. The alcoholic aperitif is slowing down due to economic reasons, while non-alcoholic products are gaining ground. Price will be even more critical in the coming years as salaries in Italy have decreased over the last 30 years and real purchasing power has dropped, making consumers increasingly price-conscious.
Young generations, even in established markets, are showing signs of disengagement and distance from wine. What challenges must be faced and what tools should be adopted to engage and stimulate the interest of young people?
Indeed, for young people, wine is at the bottom of the alcoholic beverage ranking. The dynamic changes when they start working and begin to see wine as a cultural product. There’s a need for deeper marketing work, because for young people, wine is becoming an acquisition tied to celebrations. Today, many young people don’t see wine consumed at home, whereas my generation grew up with this product on the table at every meal, which is an important issue.
For older generations, the experience of visiting a winery is very appealing but has a major limitation: price. Young people also really like the experiential dimension, but this is often at odds with the economic issue. Therefore, it’s essential to create affordable events and opportunities to bring them closer to wine consumption.
Key points
- The Horeca sector is fragmented, making wine sales tracking challenging.
- Trade marketing and physical presence are crucial for success in today’s wine market.
- Managing consumer feedback and contact databases is often overlooked by wineries.
- Young generations are disengaged with wine, and affordable experiences can help engage them.
- Multichannel strategies are necessary to succeed in retail, Horeca, and events.
