Like Oscar Wilde’s literary character Dorian Gray, Sandro Boscaini simply must have a portrait in an attic somewhere, probably shrivelling quietly alongside some of his beloved Amarone grapes. Five decades in the family business have not dimmed his energy or enthusiasm, as he continues to travel the world to put both his company, Masi, and quality Italian wines in what he believes is their rightful place on the world stage. His latest move has taken the bold step of listing Masi Agricola at AIM Italia (Mercato Alternativo del Capitale managed by the Italian Stock Exchange) – the first Italian winery to do so.
Financial innovation
In 1964, Sandro Boscaini became the sixth generation to join the family wine company after a degree in Economy and Commerce. By 1978, he had risen to become company president, a position he still holds today. And if being president of one of Italy’s biggest private producers wasn’t enough, he is also president of Federvini, the national association for all private producers of wines, spirits and vinegars, as well as being vice president of the Istituto Grandi Marchi, a founder of the Amarone Families’ association and numerous other projects.
Boscaini’s economics background shows by his taking Masi to the Italian stock market in June 2015, offering 20% of Masi’s share capital at €4.60 ($5.10) per share. This was the first ever AIM listing for an Italian wine producer and the most subscribed listing by foreigners, as well as being the biggest capital raise ever on AIM. Of 57 institutional investors who subscribed, 32 came from outside Italy, accounting for 45% of the investment. “This gave me a lot of pleasure because of the high regard for the Masi brand,” said Boscaini. However there is more to this move than simply money and status, as Boscaini went on to explain his vision of being able to invest in vineyards and helping to resurrect historic family estates (as he has already done with Serego Alighieri and Bossi Fedrigotti) with capital, rather than having to rely on loan finance. This access to capital will also enable the company to develop other projects like our wine bars. “I, along with my son and daughter, am convinced that we need to get closer to our consumers who are the end point of distribution. We need to bring our wines direct to the consumer and transfer the idea of breathing the same atmosphere and experience as coming to Verona.” The first wine bars have already opened in Zurich and in Italy near Lake Garda, with London planned for the future.
Boscaini explains more about the decision to list: “What opened my mind was seeing the poverty of the wine sector. In Italy, there are around 380,000 growers, 67,000 wine producers and 20,000 bottlers – making at least 100,000 wine brands all over the world if you assume an average of five labels each. This makes the sector very fractionated and it’s almost embarrassing to face the market. This is a significant limiting factor for Italian wine, especially in countries like China where they don’t know wine.” A Mediobanca survey on the Italian wine industry in 2015 showed that of the top 25 companies, eight are co-operatives and the rest of the list is largely made up of bottlers, who bottle wines sourced from all over Italy, making them effectively service providers according to Boscaini. He explains that there are only five true wine producers in this top 25, all with turnovers above €50m ($56m) and an average selling price of €5.00 or above, including Masi and the likes of Antinori, Frescobaldi, Banfi and Ruffino. “The point is that we should not be prejudiced about making money with wine, as we have to run our own shows due to lack of any institutional promotion for wine.” He refers to China as an example: “Italy is being surpassed by lots of other countries and only has a 6% share compared to over 50% for France.”
One of Boscaini’s missions, through his presidency of Federvini, is to, “Stimulate central government to understand the need for institutional promotion, rather than leaving it up to everyone individually. In the past this was done by ICE (Italian Trade Commission) depending very much on the local director. Now it has been delegated to dozens of regions and conzorzios, who have all ended up competing often against each other, and lining their own pockets,” as Boscaini sees it. Federvini is an organisation of private producers and Boscaini says, “We face a huge challenge from the co-operatives who produce more than 50% of wine in Italy, and in some regions like Trentino and Soave they are even more dominant.” He believes this gives them a position of control: “In effect they ‘own’ the conzorzios, making policy and driving a denomination where they want. It’s also a political movement, with the social factor of supporting small growers, meaning a lot of voices so politicians take particular care of this sector.” Boscaini adds that there are good co-operatives run like private wineries and producing quality wines, but for the most part their role is more about, “Focussing on the mass market, but using the same brands as the denominations, and surviving with grants and tax breaks.”
Not everyone agrees with Boscaini’s view about co-operatives. Italian wine specialist and managing director of Liberty Wines, David Gleave MW, says, “Co-ops are generally a very positive influence in most areas. They ensure the diversity and viability of small- scale viticulture in Italy. For the consumer, the best co-ops provide most of the everyday drinking wine that is consumed.” He adds that the marked increase in the quality of this wine over the past two decades is down to the improvements at co-ops. “In this way, they generally provide an introduction to wines from a particular area; if the quality impresses, then consumers might trade up to wines from family-owned estates that should be – but aren't always – better in quality.”
There has to be a question mark over the availability of finance to reinvest in the sector, though, given that the Mediobanca survey shows tiny profits relative to turnover for the biggest co-operatives, showing a consolidated net profit of just 1.1% across the top 41 co-ops in 2013, compared to 6.7% for the top 75 non co-ops; meanwhile, the ROI for co-ops is half that of private wineries (3.2% compared to 7.7%).
Amarone producer
Another of Boscaini’s missions is to counter the widespread criticism that Amarone’s production methods overwhelm any terroir distinction. Last year, he was in London for a vertical tasting of his two top Amarone crus – Mazzano and Campolongo di Torbe – across a span of 27 vintages back to 1988, which he used as an opportunity to discuss the category. “Amarone has sometimes become poor quality due to overproduction and being made to minimum legal requirements,” he says. “As long as it’s simply made in the area, it will sell on the Amarone name.” However, for Boscaini, “Amarone is one of the most traditional wines in Europe with 2,000 years of history and deep roots in the territory. Yes, we lose a little through over-maturation, but through appassimento [drying] we concentrate the character of the terroir, too.”
Boscaini admits that Amarone, along with Pinot Grigio and Prosecco, is a key driver for the whole Veneto region. “Unfortunately, Amarone can be produced anywhere, with 50% of grapes selected for drying,” he explains, “this is evidently too stupid: on the hills we could select 75%, while on the flat land sometimes it should be zero.” A second problem he identifies is that, “many producers are forced to produce a lot of Amarone so they can make ‘Ripasso’, as there is such close link between the two. He adds, “Allowing skins to be used twice is like using a tea bag twice, a stupidity that was allowed after I donated the ‘Ripasso’ brand to the conzorzio. It makes money though.” He smiles and points out that Masi abandoned using skins in 1983 and moved to using semi-dried grapes for the second fermentation of its iconic Campofiorin. “I’m not saying it’s a bad method, but you need to start with good skins, and use them only once.” Ironically, it is the eponymous wine of the region, Valpolicella, that suffers the most, as there is less and less in the market. Because all the best grapes go to Amarone or Ripasso, what’s left is often expensive for what it is.
Part of Masi’s success around the world is due to its exports to 97 countries; according to Mediobanca, it generated 90.5% of its revenues from export in 2014. Philip Cox of Recas, who distribute Masi in Romania, says,“We chose them because they have an impeccable reputation, we admired their pioneering spirit and their commitment to innovation and research in their speciality of Amarone wines.
Sandro Boscaini is a visionary in our industry and also a very astute businessman who has helped us gradually build up the business with their wines here in Romania by offering continuous support, including many personal visits.” He adds, “Masi is now by far the most aspirational and respected Italian wine on the Romanian market.” For the UK, Rupert Berkmann, managing director of Berkmann Wine Cellars, says “Berkmann Wine Cellars and Masi have been working together for 15 years. It has been a privilege to collaborate with another family-run business whose philosophy is so closely aligned to our own.” He adds, “Masi is an inspirational partner, combining the rigorous pursuit of quality with an unceasing drive to innovate, both in winemaking and in communicating their message to trade and consumer alike.”
Boscaini continues to lead Masi in its drive for improving product quality, too. He set up the Masi technical group in 1989, originally with the aim of rescuing almost extinct local varieties like Oseleta, and then working on terroir and topics like the role of Botrytis in Amarone production. And last words from Boscaini himself: “At our core, we will remain producers of quality wine in the Veneto area, and our brand is our reason to be.”
