Today we are at the Berlucchi with Paolo Ziliani. Paolo is the vice president of the company, and is responsible for the international operations of the company. Paolo, Berlucchi invented, in 1961, the territory of franciacorta. What were, in the beginning, the most important challenges? Why did the entrepreneurs decide to open up this new enterprise? Well, first of all I am happy that in 1961 I wasn't born yet, so this was something good for me, but as what I hear from my father, he's still alive and well, he likes to tell us all the issues and all of the problems that he had to go through before the creation of franciacorta. What really happened, was that they had a dream. Franco Ziliani, my father, and Guido Berlucchi, they both had a dream. The dream was to produce something, not the same wine as champagne, because they were in love with champagne, but their dream was to produce something as good as champagne but different, with different characteristics, with different qualities: Italian style, something very good, but something Italian style. They went through many, many problems, because they didn't have any experience at all. They had to travel many times to Champagne to try to understand and learn how to produce it in the best way. In the mean time, they were starting to speak to other people in order to present their idea. That was not easy at all I think, but as I said before, the passion and the dream, that was the secret of their success. From that first bottle in 1961, now Francia Corta is a territory of more than 3,000 hectares of vineyards, and with a total production of around fifteen million bottles with more than one hundred wineries, so I have to admit, I'm very proud of what my father and Guido Berlucci did in the past. The success of Berlucci was, and still is, a market success. In the beginning, as you said, the founders started learning how to make the wine, but then, what was the strategy in terms of marketing so the go-to market? What was the real approach, the different approach? I think that first they communicated and they contacted people that were in love with champagne because the idea was to tell to Italian consumers, try this product that is very good and is made in Italy. It didn't exist at that time. It did not exist, because the real tradition of sparkling wine in Italy was born in Piedmont with the sweet Moscato grape, Asti Spumante: Very good, but a completely different kind of product. I think the real innovation of the Frnciacorta and the real ideal that my father and Guido Berlucci had was to produce a dry sparkling wine in Italy because at that time, one did not exist. Not only dry, but also with a method that permits to obtain high quality of standards. The strategy was to suggest to try it instead of drinking champagne, and in those years, I think that it became “radical chic,” to order a bottle of Berlucci instead of ordering what ever everybody was ordering. To be different from the others you had, finally, something new to try. I think also, one of the important things of this strategy was to make the product very democratic, no? It was to sell it through the—- That was afterwards I think. Afterwards. Yeah, before it was not so democratic; it was different. We all know how Italians like to be different from the others. Okay. Then, little by little, it became democratic. It became the wine that for a party, for a festivity, if you had a birthday, if you had any event in your family, or with your friends, anyone would have opened, in the past, and hopefully in the present, a bottle of Berlucchi. Berlucchi, little by little, but I don't think in the beginning it was that. It became, little by little, the official wine for parties in Italy. And that was there—- It was like a route, a path. From 1961 to today, basically, Berlucchi and Franciacorta created a tradition, because they created the tradition of drinkinghigh quality Italian sparkling wine. Exactly. Then, also, we are working not only to maintain this tradition, but also to try to find more ways to drink our products. We believe, for example, that these wines are very good with food. Let me tell you, if you get used to having a meal with Franciacorta and of course, better with Berlucchi, but also with the others, if you get used to it, then you really realize that it's not easy to go back to regular wines, because these kinds of wines have a characteristic of, you can pair this wine with so many different foods because they are white wines, but in the meantime, they have body and structure that is similar more to a red wine. You can pair this with so many different foods, and with so many different styles. You know how, in Italy, the food is so different when you go from one place to the other, and, probably, this is another thing for why we are so strong in the market, because it's one of the few wines that you can drink anywhere around Italy, from Sicily up to the Alps. This is a more general question; When you work, compete in a market, having created a tradition, is it an impediment, a constraint to innovation or does it help to innovate? The challenge is to keep the traditions, but in the meantime try to innovate without losing the tradition. I’ll give you an example in the production field. Little by little, we understood that from one single plant the number of bunches of grapes on one plant has to be a lower number of bunches because the roots have to feed just four or five bunches, if you really want to have taste characteristics and quality. That means that you don't change the tradition, but you understand things year after year, production after production, vintage after vintage. Same thing for the pressing, you understand little by little, that the gentler your pressing is of the grape, the more you can get, really, the best of the juice that you want to have. Then of course, you have to keep the tradition, but I think that we have to worry about preserving our territory, preserving our land; so of course we are trying to be greener and greener, more and more, trying to preserve what nature gave us. We don't want to change this. I think it's important to always remember your traditions, but in the meantime try to be innovative in the production field, and also in the marketing field, because of course, consumers change and they change their ideas, so you have to be in line with the new trends. Good. As you said, basically, Berlucchi is one of the undisputed leaders in the sparkling wine market in Italy, and Franciacorta. One of? It's the leader. I'm sorry. Okay. It's the leader in the sparkling wine market in Italy, and Franciacorta is recognized as the best territory for the sparkling wine market in Italy, but now that the big challenge for Franciacorta and Berlucchi is international markets. where the competition is much fiercer and where the competitors are very different. What is the strategy of the territory, and Berlucchi in in particular, to try to approach a global market where territories and companies compete in a very global and—-? Well, first of all, we have to always remember the way we produce our products. The rules in producing Franciacorta, are the most strict rules in the world to produce a sparkling wine. From one hectare of vineyards, we can obtain, a maximum of 9,000 kilos of grapes. From one hundred kilos of grapes, we can obtain a maximum 55% of the juice to make Franciacorta, so there are so many rules that give us the opportunity to have a high standard quality within onehundred producers. This is the goal of Franciacorta: quality, quality, quality. This is the only way to have a chance in the world, trying to compete with champagne, because that's the competitor. Of course, there are many different sparkling wines from Argentina, from Brazil, from Australia, from UK, from Prosecco. In many nations, in many markets, the consumption sparkling wine is growing, and there are many different productions. We think that the chance for Franciacorta is to be In a very high quality standard. We have those rules that have to be very strict, and of course, also, a consequence of that, the price will be high because the costs of production are high. I think that we have some chances because we have our own character. The wines have their own characters. They cannot be confused with any other wines. This is the chance. Of course, we will need many years, we will need many tastings, we will need many planes to fly on, it will be many miles to fly, And I'm doing that, but it's fun. It's fun, it's challenging, and I think we have some chances. When you talk about Berlucchi within the territory, because this is a strategy of the whole Franciacorta territory,—- Yes. but then you compete with all the other competitors within the territory; what are the potential differentiation strategies, that the leading company in the territory can pursue? I think that to be honest, yes, of course, everybody inside the territory has to have their own differentiations, Well we are the inventor of Franciacorta, I think that maybe that's why I'm not so worried about what is different between us and the rest, but there is so much more space for us to grow, we are only producing fifteen million barrels. That's a very low number, so I think that we have to have a goal to at least double the production and the sales of the bottles of Franciacorta in the world within a certain period, that can be ten years, twenty years maximum. That has to be the goal. I don't think there is a big problem in emphasizing what is the difference between Berlucchi and the other of our colleagues in the territory. Of course, Berlucchi is the one we invented Francicorta, so we will always be the inventor of Francicorta and we will always be the one who pushed the most, the one who spent the most money, the one who will believe more than the others. This, that's for sure. Okay, thank you so much Paolo. Cheers. Cheers.
