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In this issue of smart news:
Campari and Moet-Hennessy go up to 100% Tannico
The mapping of the Contrade of Etna is finished
OIV estimates on wine production 2022 and resolutions
Glass price still on the rise
Bankrupt Winc: What happens in wine tech?
Quickly:
Will England become the leading producer of Chardonnay by 2030?
Prowine in Shanghai has been cancelled
Campari and Moet Hennessy buy 100% Tannico
After acquiring 49% of Tannico in June 2020, Campari has continued its path towards e-commerce. In fact, the company needed to have a digital platform and taking advantage of an established brand like Tannico was the best move.
The path has continued in July 2021 with the creation of the joint venture between Campari and Moet Hennessy, with the declared aim of becoming a reference player in Europe for the wine & spirits e-commerce. A 50/50 collaboration between the two international brands where Campari brought its stake in Tannico.
This path has now been completed, with the acquisition by this joint venture of the remaining 51% of the capital, thus creating the potential of a European-level wine&spirit ecommerce. From 1 January 2023 the role of CEO at Tannico will be entrusted to Thierry Bertrand-Soleau, while Marco Magnocavallo, co-founder and current CEO, will remain as honorary president to maintain the strategic line of the company he founded.
Mapping the Etna’s wine area
Mapping was necessary, as confirmed on the Consorzio di Tutela Etna DOC website, because until now knowledge of the area was limited to fairly dated maps. The project involved all 133 districts of Etna (133 Contrade) and should be seen as the beginning of an area’s knowledge process. The Contrade have the status of Additional Geographical Unit, a kind of subzone, and the creation of the territorial map is part of the broader intention of treating the micro-zones of Etna as they were Cru.
The mapping was commissioned by the Consorzio Tutela Vini Etna DOC and realized thanks to the contribution of the Agriculture Department of the Sicilian Region Agriculture Department. Recent topographic surveys have been used to which the maps taken thanks to GIS (Geographic Information System) instruments have been superimposed.
The initiative is certainly of a high standard, for a territory that is improving harvest after harvest, also thanks to well-crafted communication. In my personal consideration, I think static maps are only the first step towards a land mapping system. Year after year the hydrogeological surveys, temperatures, yields change, and these data should all be inserted into a system of maps that is no longer static but dynamic, superimposing various sets of data on the territory mapped in this way.
From here you can download the list of Contrade dell’Etna, and here there’s the high resolution map.
OIV estimates on wine production 2022
The 43rd OIV General Assembly (International Organization of Vine and Wine) was done in Esenada (Mexico) in the first week of November, where the world estimates of wine production for 2022 and a document with 35 resolutions were presented; these are the guidelines that OIV provides to the national associations of producers, to improve productivity and, starting this year, also to allow a better measurement of the carbon footprint and the production of greenhouse gases. The summary of resolutions can be downloaded at this link.
In particular, the OIV-CST 503H-2022 resolution provides a guide to improve knowledge of the "results of the calculation of greenhouse gases in accordance with the OIV protocol for the wine sector". Having standard criteria for communicating carbon footprints is necessary to ensure the reliability of information to consumers, as well as to minimize the number of potentially misleading claims and labels.
As far as quantities are concerned, despite some pessimistic words, production is quite in line with last year, only 2% less. Which could also not be a bad thing, given that consumption is also decreasing, therefore it is useless to produce more wine than we consume. This is the Italian press release from FederVini. An interesting graph on the trend of world production, divided by the major producers, can be found on the pages of I numeri del Vino, just at this link. For Italy, a production of 50 million hectoliters is expected (19% of the world total), thus confirming the good productions of past years (excluding 2020).
Glass price still on the rise
For the fourth time, in Europe we are witnessing a new increase in the price of glass, +20% starting from January 2023; this brings the price of this material to +70% since the beginning of 2022, i.e. since the invasion of Ukraine by Russia. I will make a special issue of the newsletter on the formation of glass prices. In any case, the increase of the raw material, of its transport but above all of the processing (which requires high temperature furnaces, and therefore large gas consumption) has brought about an incredible increase for all glass containers and also for the costs of car windows and windshields. The prices of jars containing jams and sauces, for example, have also increased, an increase only partially absorbed by the supply chain.
Winc required Chapter 11
Watching about Winc to access at Chapter11 bankruptcy it’s really weird. Only 1 yr ago the company became a Public one, with 13$ for share at its debut. It raised $22 M one shot, and until 2021 had been funded with $54,2 M (source: Crunchbase) from many investors from California, Japan and Hong Kong.
Winc was founded in 2012 and reached 70 million dollars. The Q3 financial report showed the difficulties it was facing. Winc reported an overall decline in total net revenue, with DTC net revenue declining $2.8 million. In September the CEO Geoffrey McFarlane, co-founder, resigned; the role of CEO was provisionally entrusted to another co-founder, Brian Smith.
Up to now no official communication from the company, and the website is unreachable: the 1020 error means that the internet routes to the site’s url have been closed (to put it simply). Just in March of this year the shares were trading at $13 also thanks to a good report for Q1 2022. But in September, just before McFarlane’s resignation, the forecasts were not more so good, and the stock is down 17%. Winc shares are currently listed at 30 cents. This led to a Chapter 11 filing.
The Q3 2022 report illustrates an unfortunate situation; Winc has accumulated many debts and against a turnover of 72 million dollars there has been no profit. In a statement, the company confirmed that:
In this challenging macro environment, the Company is prioritizing cost control and cash flow management as we take steps to improve profitability while focusing on our core business (source: The Drink Business)
The problem of companies doing D2C is part of the situation that many companies face; there is a general decline in investments, as Paul Mabray also confirmed after the closure of his startup Pix. Winc’s largest creditor is Meta, with whom he owes over $750,000, most likely all from advertising. In recent months many technology companies are starting to have some difficulties precisely because companies are decreasing advertising investments.
Companies like Facebook and Google, having their revenue on advertising, may find themselves facing more difficult situations than usual. In any case, Winc’s filing for Chapter 11 comes quite suddenly. Prices until before the summer were good, and forecasts were positive, despite a decline in operating results. For now, however, all the information is here, so we will have to wait for more news before understanding what happened and why.
Quickly
The UK will become a growing hub for Chardonnay by 2050, according to a study by the University of Reading. To date, the Chardonnay surface in the UK is around 2%; due to climate change, by 2050 this could increase up to 25%, thanks to milder temperatures and lower rainfall. (The Drink Business)
ProWine in Shanghai has been canceled due to the zero-contagion policy adopted in China until last month. The event was supposed to be held from November 20 to 22, but the provisions of the Beijing government left the organizers no choice. In the meantime, these very stringent policies are about to be relaxed, after the protests of late November and early December, but naturally a fair of this magnitude cannot be left with the uncertainty of participation. (Vino Joy News)
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