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Q&A: Giancarlo Bianchetti of Viña Concha y Toro
Giancarlo Bianchetti is chief executive officer of Fetzer Vineyards and a director of Chile-based Viña Concha y Toro, which purchased Fetzer in 2011 for $263 million.
Fetzer bottled wine last year totaled 53.3 billion Chilean pesos (or $111.5 million) on 2.46 million cases, according to the parent company’s reported financials on March 26. That’s up 31 percent by value and 38 percent by volume from 2011. Fetzer total wine sales last year made up 11.9 percent of our total sales, and 8.1% of our total volume of bottled wines.
Mr. Bianchetti will be the keynote speaker at the April 18 Wine Industry Conference presented by the Business Journal. He spoke with the Journal about the company’s interest in Fetzer and his role in the deal.
Giancarlo Bianchetti: I led the acquisition process of Fetzer Vineyards for Viña Concha y Toro. I directly negotiated with Brown-Forman on all points of the contract, including the transitional services agreement that was in place for eight and a half months post-acquisition.
My role at Fetzer Vineyards is chief executive officer. My direct reports include sales, marketing, finance and our wineries. I am very involved in each of these areas on a day-day basis as well as set strategic direction for the company.
Mr. Bianchetti: Viña Concha y Toro is always seeking opportunities to expand its operations around the world. One of Viña Concha y Toro’s goals in continuing to be a global wine leader was to have a foothold in California. Fetzer Vineyards provided us with that opportunity.
We have considered opportunities in other producing countries, but Fetzer Vineyards was the most closely aligned with our strategic goals. This particular offer was sent to us by an investment bank in October 2010, and we closed the deal in April 2011.
Mr. Bianchetti: The biggest strength of the U.S. wine market is that it is not only the No. 1 wine market in the world but it is also continues to grow. There are many opportunities in the U.S. for California wines, as well as plenty of growth opportunities on the export side.
Of course, the challenge is to always stay relevant in the eyes of wholesalers and consumers. They each have so many brands to choose from that you must work hard at innovation and speed to market.
That is the beauty of the U.S. market though. By doing these two things really well, this leads to success and new opportunities.
Mr. Bianchetti: The primary reason for the transition services agreement with Brown-Forman was to perform domestic sales for Fetzer Vineyards, as well as other backroom operations. During this time, we set up a structure for sales, hired the team and applied for all of our own state licenses, that had been previously consolidated under Brown-Forman. We hired about 50 sales and marketing employees. That was a challenging project given the timeframe, but we believe we had excellent success.
In terms of “doors in” at the winery, we were very pleased with what we found. We did add some employees to cover additional functions previously handled by Brown-Forman, e.g., customer service and accounting.
Otherwise, our focus at the wineries has been on quality and innovation. During 2012, we changed or added 38 percent new SKUs. We needed to do this to get focus back on our brands with both wholesalers and the consumers.
We are very pleased to report that we have just completed our sixth month of positive growth in our business, year over year, with the last five months being double-digit growth.
Mr. Bianchetti: Even though Fetzer Vineyards is owned by a Chilean wine company, we are still a California winery. We are excited to be doing business here in California. We accomplished many things together during our first year as a new company, and we look forward to continued growth for our great brands.
Link to article: http://www.northbaybusinessjournal.com/71475/questions-for-giancarlo-bianchetti-vina-concha-y-toro/
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