Ricardo Migueláñez. Agricultural Engineer. @rmiguelanez
Freixenet, the leading cava producer, celebrates its 100th anniversary, a milestone that reflects the success of a group which continues to operate as a 100% family-owned business and which currently has 21 wineries in 7 countries on 3 continents. Wikispanishfood.com interviews Pedro Bonet Ferrer, head of communication and advertising at Freixenet, who talks about the company's 100 year anniversary and the main focuses of the group.
Ricardo Miguelañez - After 100 years in the business, what is the secret to success?
Pedro Bonet - It's definitely the idea of being a family-run company committed to quality and to being successful and a leader and, of course, to internationalization, which has been one of the main objectives since the company was founded.
My grandparents were already exporting because they knew the industry well and they followed champagne's strategy. They wanted to make a similar sparkling wine using the traditional method, and with that in mind they focused from the very start on reaching the whole world with their brand.
R.M.- What are your greatest milestones in the last 100 years?
P.B.- The first was the founding of Freixenet, by Pedro Ferrer and Dolores Sala, my grandparents. They decided to switch from producing wine to producing quality sparkling wine.
The second milestone is the success that they had because they made a fantastic team. In just 22 years, they ranked second in terms of sales, behind Codorniu, and were expanding very strongly and modernizing the concept of sparkling wine. In 1959, when the national stabilization plan was approved, all companies, including Freixenet, became industrially and commercially active.
Other milestones include the launch of Carta Nevada and our black bottle cava, our most popular product abroad, and the acquisition of other wineries in various countries. Now we have 21 wineries in 7 countries on 3 continents.
The most important factors in Freixenet's success have been internationalization, which has been a distinguishing characteristic of the founders since the 1960s, and exports, which now account for 80% of sales. That's what sets us apart from other brands.
R.M.- What do you believe is the key to being around for another 100 years?
P.B.- Looking back, the last century was very clear, despite challenges. We sell, we export, we have a significant production volume, and we're riding out the storm. We have 1,912 employees, we maintain a large portion of the cava-making landscape, and we have been operating with very strict environmentally-friendly criteria since inception.
R.M.- The last two years have been very complicated, but Freixenet has been able to weather the economic crisis. What are the main aspects of your strategy?
P.B.- Exports have been essential for us during these last few years. Since we are a large, mature company, we have not made any drastic decisions, but we increased productivity and sales in the countries where we they were performing well. We have also focused on Russia, China and South America, and on European countries that have not been affected by the crisis, although France has also improved its sales abroad.
R.M.- Sales of Freixenet in France currently outstrip all sales of French champagne in Spain, which makes should make you very proud.
P.B.- Going forward, it's important for us to maintain the family-business structure because that allows us to reinvest whenever we can, to survive, and to create a survival economy when things go pear-sharped.
R.M.-How important is the line of wines in terms of overall revenues? How does this segment fit in with the rest of the group?
P.B.- This year, wines will have accounted for around 30% in terms of volume and 25% in terms of value.
Each winery is independent, and then there are distributors. In Spain we have a company that distributes all of our products. In the US we work with one of our own companies which has a winery and an importer, and later distributes products to each state, where we have additional distributors. In Japan we have one distributor. You have to adapt to each country.
R.M.- Prices were lowered in the last two cava campaigns. What was Freixenet's experience in this regard?
P.B.- This issue was impacted by modern distribution, which requires more aggressive offers. In the case of cava, they found companies who offered promotions, which ruined the synergy that existed in the sector. The beneficiary in this situation is the supermarket; the producer, in contrast, loses money. Private label brands hurt producers but favor distributors. Moreover, holiday gifts have declined by 70%, which has also hit us hard.
R.M.- What is the outlook for this year?
P.B.- Projections are good, as summer is over and results were better than last year. At the end of 2014, when the mood is more optimistic, our performance should be at least the same as last year's, which is good enough.
R.M.- Where in the world are cava sales still pending?
P.B.- There are many countries, but everything is very slow for production and exports. Consumption of these types of Western products is starting to pick up in Colombia. The same goes for Chile, which also has its traditions, and I would say we also have to boost exports to Mexico.