We’re here today with Niccolò Branca, the president of the Fratelli Branca distillery, a company that is celebrating 170 years of business this year, therefore is a good example of a success story in the beverage world. Niccolò, amaros are a traditional Italian after-meal drink, but they’re also drunk in many other parts of the world, what can this appreciation for amaros be attributed to? Well, I’m not sure if it’s actually an only italian product. We’re just an example of it, because here we have the geniality of businessmen which pairs up with the herbs, roots, and spices, to produce this product. Therefore, it’s actually this excellent Italian creativity that is known throughout the world. We think that Fernet Branca is a product that was born in 1845 on paper, but actually was born before. The company was founded in 1845 but the product had already been being made. Even before Italy was united in 1860, the product was already traveling abroad in various international fairs in oder to get known. So then, what gave it all of this success? It kept the promises it made. These are the most fundamental points. Since it’s such a diffused product, are the ways in which it’s drunk always the same? I mean, do the cultural differences lend themselves to different consumption practices, or is it rather standardized even in the international market? No, obviously from market to market there are differences. There’s something that connects them all, but given so, there’s also a difference. For example, in the present Argentine market, they drink Fernet Branca mixed with Coca-Cola which is actually the national drink of Argentina. It drunk before, during and after a meal, sometimes even to lengthen the night. So obviously, from a certain point if was no longer only a digestif. Then, in the North of Europe, it’s drunk as a shot or with beer, in North America it may be drunk either dry or with ginger ale, and in some places in Europe and America it’s used in cocktails, for example, a Hanky-Panky. In Italy it’s consumed, dry, as a shot, in a mixed drink, and in coffee, therefore the ways it’s drunk changes depending on the customs of the different countries. The important point for the company to remember is to listen to what the customers want and then to adapt itself to those types of consumptions. A company such as Branca that makes a product like an amaro is international, not only because it sells to many foreign markets, but also because it has many suppliers and vendors since thats what the product requires. How does this kind of diffusion into various markets give value to the company? Surely it’s important because it gives a sense of notoriety on a more international level but I think it’s actually in the product’s DNA. If you think about it as product that was born in the beginning of the 1800s with herbs and roots that came from four continents, and that still come from four different continents, that means that somewhere inside of itself, there’s this international identity. It’s already hard to managing making a product which requires source ingredients from different parts of the world much less how had it must have been in the past! We can see from the various roots: Thai ginger, South African and Sri Lankan aloe, and Idian saffron, that it’s truly an international product. There are these herbs and roots that come from four continents that come together to make this unique product, and I think that that’s a very strong point of the product. Has the production process always remained the same for a product this traditional, or with the passing of time has there been innovations that have caused it to evolve? Without a doubt, the product has stayed the same. It has a recipe which is pasted down from generation to generation and which the company has the responsibility of continuing. The secret of this recipe that has given the product so much international success, which keeps on getting passed on to future generations in actually the formula. Even when I had this formula, I tried changing it around a little, since I’m curious by nature, but it was clear that the ingredients in and of themselves don’t form the secret but rather it’s the ratio and various doses of the ingredients that’s important. What happens if I make a small change in the dosages? I’ll surely end up with a great amaro, but it won’t be the same amaro that I’ve been making since the beginning, the valuable amaro that I’ve worked so long in getting known. It’s exactly this mix in the right ratio, the sum of the parts, maybe something more than just the sum of the parts that give it that magic something. In fact, I like to think about this ancestor, the creator of the amaro as a sort of alchemist. It’s odd that a product that has more than one hundred years of history is still appreciated so much and is still so successful. How is that possible? How is it possible that a product remains the same for more than one hundred years in a world that has been changing yet is still successful? I see the same way I see some music, some art, or some countrysides; in other words, there are some musical pieces that are timeless, paintings that are timeless, other works of art, like gardens, that are timeless. When something is beautiful or good, generations can pass and it will still be such. Everyone likes beauty and excellence. In fact, I think that that’s one of the important things that all of our ancestors and all of the company’s workers are known for, that is, to remain firm on the idea that the product must be an excellent one. I think this is very important, and this may seem like something obvious, but it’s actually not. Sometimes, there are periods when you’ll hear, “Yeah it’s not important,” “Change this,” or “Change that,” “People won’t even realize the difference.” In fact, a little bit ago, about fifteen to twenty years ago, you’d hear the market saying that the product wasn’t what was important but what was important was the consumers’ perception of the product. This is an idea that we never shared. We always held the bar firmly where it was. For example, in this period, the general public’s palate is used to sweeter things than before. Fernet Branca, though, is a product with it’s own characterizations; it’s a product that one has to taste a few times before he or she can begin to smell and taste all of its complexities, so it would have been easy change something. Say, “Let’s sweeten this a little, or adapt to…,” but no, we stayed the same. All of this shows that it’s a purposefully made decision, it’s not necessarily obvious. So, since we are a family business that has to think long term, we believe that people willing the end always value this quality, excellence and way of doing things. Okay. Branca is distributed in 160 various, very different countries all over the world, so is the strategy for how to enter into each country the same or are there some different choices depending on which country it is? Surely there are some determinative factors. The first of which is methodological, that is, researching the market, looking for possibilities, seeing if there could be any communions riguardino our products, etc. Then we, of course, even have to look at the reactions of the consumers of our products. Therefore, there’s careful research even in this field. After having done this, we research other possible complementary products, services, or attitudes of the location’s culture that would go well with our product. The second factor is researching a possible distributor that would be willing to invest in our brand, obviously, in the first couple of years of exposure in a new country, you have to work on building the brand’s name. So it’s absolutely imperative that you find distributors tua believe in your brand to help create it’s name. The have to believe in the product, brand, market, and the potential, they themselves have to invest because the results may only come after one, two, three, maybe four years. So that’s another very important thing, because if you find a distributor that is only interested in selling a couple of containers for one year or so, then will loose interest, you won’t be able to build your brand. Yes, maybe you’ve opened a new market, but you haven’t made anything long-term. We’re in many countries and therefore we divided the countries into different levels. There are the most important ones which have potential. And there are markets in which we have to begin slowly, exactly because you can’t do everything at the same time, therefore we give each one it’s own type of focus and energy. Of course, then, operating in many countries, there’s also to possibility to learn from these countries, from these different habits. Could you give an example of something that you may have learned and then applied to other markets? Does this often happen or is your approach rather standardized? No, obviously I think that one of secrets to conducting business today, and also just being with other people, is in fact knowing how to listen. I think that this is a fundamental point. The market is formed in part by listening to what actually happens in the market and then re-tailoring the market’s request. therefore, it’s a prevalent part of the company. There are many examples of this in our profile, even some with history. I can think of Branca Menta which was born from listening to the market, The Punto & Mes, another product that was born in the same vein. Recently, in Argentina we’ve listened to the market because it wasn’t us who invented the Coca-cola mix with Fernet-Branca, but rather it was the people of Cordoba, Sala, and Jujuy, who developed it, but we listened and acknowledged this trend which was arising and started to develop it more, invest in it, and give it energy. Once it garnered enough success in Argentina, we tried exporting it to other places. Maybe in certain places the mix wasn’t well received with Coca-cola because it was seen as an import, but then we found out that maybe it went well with ginger ale, while in other places they preferred it with Chinotto. For example, it’s a trend to drink Fernet-Branca meat, because it’s seen almost as a “meditation” drink, which is to say it’s a drink whose ingredients are known and thus those who drink it want to be able to taste the properties of each herb and root, understand what’s inside. Therefore, this is a drink that we’re studying in order to amplify it in other parts of Europe. So, this listening to the market, noting what goes over well, and trying to re-create them in other markets, is, in my opinion, a very important part of marketing and communication. I certainly don’t think that companies can impose their ways of think, their ways of using their products on the consumers. Instead, what they need to do is try to understand what could be a nice balance between them and the consumer, who we actually call the co-bussinessman. It’s really an exchange attitudes and approaches that has to take place. Speaking about Branca Menta that you mentioned earlier, in what way had it been born from the market’s desires? Branca Menta was born from the market’s desires because, at least by what they tell me, so I’m not sure if it’s the actual truth, but apparently a lot of people used to mix Fernet-Branca with mint, and this trend only continued. So from this, the commercial director started experimenting and eventually spoke with my father, who was president in the 60s, and asked him, “Why don’t we try to do it ourselves?” Armed with the knowledge of Fernet-Branca and the mix of herbs and roots, they mixed it with essential oils from a particular type of mint plant and were able to produce the Brancamenta which enjoyed a lot of success and even today enjoys similar success that only getting bigger. That’s one example, another example is Punt e Mes. Carpano, the inventor of the commodity-related category of vermouth with the old recipe, had red and white Carpano, the story goes, around one thirty or two in the afternoon a worker leaves the stock exchange and goes to this bar, he asks for half white and half red a “punt” of white and a “mes” of red, which is dialect from Turin. After a while the barman started saying, “You’ll have the usual ‘punt e mes’?” This is another example of being aware of something and creating an innovation from it. It’s really listening to what the market wants, which is on of the most vital things in my opinion. In the food and beverage world, there are some cases of companies around the world and even in Italy who’ve enjoy such a long success, who have many years of experience. In such companies, is tradition not a limiting factor on innovation? I mean, how do you manage to innovate when there’s such a strong tradition to keep faithful to from generation to generation? The most important thing to do it to individuate the DNA of a product, what makes it it. In our case it’s with our products, but its the same for any company. You have to understand what the good points are and in turn try to keep them steady, which for our products means keeping with the same formula. At the same time, you have to look to innovate and anticipate. I try to do such therefore I invest in research, in development, in innovation, and in organizing the company in more innovative ways. You have to keep an open mind living with what life gives you, trying to avoid stereotypes because it’s us that impose boundaries saying what we can and cannot do. So we put one restriction on us, for Fernet-Branca, it’s the formula, but then we’re free in other things, the company’s organization, growth, international development, in fields like this, the sky’s the limit. We have integrated information systems, managerialized the company, and invested in innovation and research on how to growth into larger international markets. This is all necessary to put yourself in the game, you have to keep an open mind and be open to change. I think this is very important and in fact, I actually try to anticipate this change. This is easier said than done however, if anyone looks at him or herself, like I do, they’ll see certain habits and ways of doing something. Sometimes when I have to make changes in the company I have second thoughts; humans are made this way. It’s as if I’m saying, “Why? We’ve always done it like this. Why would we want to change?” Therefore if one wants to actually ‘anticipate’ change there will be even stronger second guesses. We can look at ourselves and see how hard it is to change our habits. If you’re used to coming home and laying on the couch, and one day say, tomorrow, I’m going to start walking instead, you’ll find that the habit may be harder to break than what you originally thought the next morning when you wake up. We accustom ourselves. Instead, it’s important to get out of this rut and keep an open mind living change as an important part of life. Thank you. You’re welcome, thank you too.
