Ep. 1301 Croatian Wine Market | wine2wine Business Forum 2021

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A wine to wine business forum twenty twenty one media partner is proud to present a series of sessions highlighting the key themes and ideas from the two day event held on October the eighteenth and nineteenth twenty twenty one. This hybrid edition of the business forum was jam packed with the most informed speakers discussing some the hottest topics in the wine industry today. For more information, please visit wine to wine dot net and tune in every Thursday at two pm central European time for more episodes recorded during this latest edition of wine to wine business forum. So good morning. Good afternoon to everybody. I am a Alessandro Medichy, and I am a a wine producer, a Lambrusco producer. Actually, today, I'm going to moderate them to introduce the, this conference made by Thomas Love. We are going to speak, about a specific topic, and, They're going to speak about Croatia market. And, the the topic of the speech at the conference is who sells wine in Croatia. Actually, when, Steve, he asked me to moderate this, in this seminar, she asked me Alexander, do you sell wines in, your wine in Croatia? And I answered no. We export in more than seventy countries, but, we never sold a bottle of wine in, in Croatia. And she told me you're going to learn something about the commercial market. So that's why that's why I'm here, and I'm glad to be here because, I am really curious, from, the producer, side from the producer point of view. How to approach this this market and, to know something more about this market. Today, the topic, as I said, is, who says wine in Croatia. And, we are here with, with Thomas level. That is, the executive director of, MIVan Moretor Giva. I said, right? More or less. Tregovia. Trigovia. Means straight. Yvonne Momer trade. Yeah. Thank you. That is the the leading wine distributor and, importer in Croatia. So I think, he is the right person to to introduce us, to this market. That is an important market because they are a wine producers. They, produce, around one hundred and thirty indigenous grape varieties. And, Tommy's lover will lead us, in this virtual travel. So, you can start. We have just, at the end of his seminar, five, ten minutes of question and answers. So, Thomas, let's proceed. Thank you, Alejandro. I don't know. Do you hear me probably, without microphone as well? So I will not do like this. It's an honor to be here, and I'm glad that I can, present, my country and and, to tell you a few words about, how to sell a wine in Croatia and who sells wine in Croatia. But before we we come to this part, let me just do a quick introduction. About Croatia. Just, I believe all of you know where Croatia is, neighboring country to to Italy right across the sea. So it's only three, four hours driving from here. And it's, land of tile thousand islands. So we have to be more precise, one thousand and two hundred. After Greece, the second, we are the second, in the number of islands on Mediterranean. So it's a beautiful country, touristy country, not a big country. It has a population of only four million people, with an average salary of, one thousand and one hundred dollars. So not a big, not a very rich country yet. We hope we will be one day, which was Italy. But the the very, very interesting part, thing about Croatia is that even on such a small area. It's very diversical. So we have, as I said, one thousand islands, we have mountains, we have flat area. Everything is reachable within a few hours, of of driving. So, very, nice country to to live in. We are best known, for sports. As you probably know, our football team was the second, on the World Cup two thousand eighteen. You all heard of Guarani Vanicevichovich of Toni Coukocher. Some other famous, creation sport players. And we are known for tourism. Twenty million people comes every year to Croatia. I told you that population of Croatia is four million people. So you can imagine when twenty million people come. We we depend on tourism. Theresa makes twenty percent of total GDP in Croatia. So we are, very touristic country. Which sometimes it's not good, like, in previous year when there was no tourism, you can imagine, that's it was a pretty difficult year for all the world, of course, but especially for for the countries that rely on tourism. Croatia is also a winemaking country. So, not many people know that, as, Alessandra said, there are one hundred and thirty indigenous paper artists in Croatia. Of course, not all of them are in commercial use. Some of them are only a few vineyards, but let's say twenty or thirty of them are, widely produced and, and the selling on operation market. Twenty thousand hectares under vineyards, which is also not, a big number. It is, like, half of the size of, champagne. But the interesting thing is that all of Croatia or almost all Croatia is, under the vineyards. You can find them in every region except this, small gray part, in the middle, where are the mountains. This is where you will not find vineyards. But other than that, in every district, there are, some some, winemaking. So very, diverse style here as well. Many different varieties, many different types of wines, many different climates. So on the coast, it's very hot and warm. In line. It's it's much cooler. There is a park a little bit above this gray area, which is called, croatian sampling. At least we call it so because it's known for sparkling wise, So, yeah, many different types of wines. If one is being produced here for more than two thousand and five hundred years. Some of the most popular grape varieties that you can find in Croatia. I mentioned here are Rajivina, Malawi, Estiana, for Shiv Debit and Shlaxina when it comes to whites. And, these are the ones in res Plava, Malifang or Kateran. Grashivina is the most widely planted, the grape variety actually, it's not indigenous. We don't know if it is, it is the same variety as welsh riesling or riesling, italia. So, we are not sure if it is creation, or does it come from some other country, but it is the most widely planted variety in Croatia. When it comes to reds, Palat Smali is, the most planted one. And it is, best known for the fact that, one of his parents was Selena Khastalanski, or it's the synonym for Primitivo or for Zinfandel. So, also not, many people know that Primitivo and Zinfandel are actually original creation varieties, Triana Khastalanski, or Trebidra, what is also called there. When it comes to export import, we are more, importing country than exporting. Producers in Croatia are not, the big ones. Everything producer produces, like, one hundred thousand bottles. So most of that, we can sell, in our own country. Especially knowing that tourism is so strong. And the many people come to our coast, they like to try try, local wines. So most of it, we sell, in our country, but we also export to Bosnia, Germany, United States, but also many other countries. When it comes to import, we import five times more than than we export. As you can see, twenty five hundred thousand, hectoliters. Half of that is in in zero seventy five bottles, the rest is imported as a book, wine mostly from North Mchedonia, Plavraty. And so on. This is one interesting chart that I found on the internet, and, it shows a a wine consumption in Croatia. It looks like we drink really, a lot. We are, on the top of the world after after, the pope and the andorra, which are very, very small countries. The average size here, stands pretty good. This is, the chart that is, three or four years old. But, I believe it's still pretty much the same. We didn't we didn't stop drinking, don't worry. So who sells one in Croatia? This is the part that is related to to the topic of, of my presentation. Horeca business, so there are five thousand five hundred restaurants. Ten of them have a Michelin Star. This is from this year. This year, we earned two three more stars. We had seven until this year, and now, ten mission star restaurants, which which, for such a small country, is, I believe, good achievement. Eight hundred hotels. Of course, there are special wine shops and then wine bars. And, most of the wine is sold through supermarkets. There are, some international supermarkets present in Croatia, like spot and cow fund, Little Metro, they sell a lot offline. And also consume here being the leader. It's a creation, supermarket chain, with over six hundred shops. So they are, they are leading the the biggest, supermarket chain in Croatia. Last year, they sold actually, in last twelve months, they sold more than two million bottles. Two million bottles, and most of it is creation wines. Seventy five percent, they sell creation wines. But, of course, there are some, imported wines as well. Similar situation is in Metro, but Metro has much, less, shops. They have ten, ten shops all across Croatia. They are interesting because they work with restaurants. So not only that, the regular customers buying there, but many restaurants buy fish, some food, and also wines in Metro. Metro is, big player. And here, I put Rutak, Brutaq is, not actually a supermarket. It is a chain of shops. All of them are in Zagreb. And they are, synonym for the for the buying wines. Because they have in there offer, like, two thousand and five hundred different labels. They are always, trying to get the best price. So they are in in the in the eyes of consumer, in Zagreb. For now, they are only in Zagreb. Whenever you want to buy wine for some party for something, you go to Rutaq because there is a big selection, and there is, the best prices. So they have seven shops, but actually one of them one of these shops, I think, is making eighty percent of of total sale. This is the biggest one. It is the oldest one, and they import a lot. And they as you can see, percentage of creation wise in BRutac is much smaller than in the other shops because they import, many, many wise. Usually, these are, cheaper wise. But also they have some, more expensive ones. When it comes to wholesale, the wholesale companies that sells wine in Croatia, I divided them into three categories. These are big wholesales of beverages, then specials wise, wine wholesales, and small, wine companies. Big wholesales, are the companies that other than wine, which is actually not their, first choice. They sell beer. They sell water, solutions, the Coca Cola, I don't know everything. They sell everything to to the restaurants and to the coffee bars, among that, also selling wines. As you can see here, the biggest one is the rotodynamic. It is also it was a part of, together with ConZoom. This was, like, big company, Agrocore. There were some, problems. This company doesn't exist anymore, but these companies that were under it, still still work, under some I will not go into the details, but the rotor dynamic who was a sister company to consume. As you can see, they have six hundred employees. And they had, turnover of one hundred and fifty million euros in two thousand nineteen. These are the, numbers from two thousand nineteen because it was the last, reference year. We all know that last year. The numbers were not not realistic. Also some other companies, these three of them are from Zagreb and Baqum Tegovina is on the coast. It is the biggest coastal wholesale, distributor. Then we have a specialist, wine, wholesales, here, my company, MIVa and Mofer, is the leading one. With thirty six employees and fifteen million of euros of turnover in two thousand nineteen. And then there are some other companies such as Divatakravataktoks Nevergreen, who also, do a good good job in terms of selling wines in Croatia. And there we have a small wine companies with one or two, employees, that make, less than one million euro, But, these are the companies that are actually very good choice for somebody who is entering the market, and it's not, world famous brand. Because I believe companies like this will put more, effort in in placing your wine, more they will, have more time. For example, we have, one one thousand two hundred labels, different labels in our portfolio. So whenever we add a new a new wine to our portfolio, we cannot, push it as as strong as, these small companies, we'll do it. Italian wine podcast, part of the mama jumbo shrimp family. This is meanwhile, like, twenty years ago. You also have to start from something. So you start a small company, you'll find a few brands that you, sell, and then you offer them, much more than than probably Hiroo will just you will be, a name on on the list. So let me, present my company. Also, in a few words, these are actually two companies, MIVa, and Moeferagovina, two sister companies, but, in, in reality, this one company, everybody knows us as MIVa and Mofford established in nineteen ninety six this year. We are celebrating twenty five, years. Thirty six employees, as I said, fifteen million euros of turnover in two thousand nineteen, ninety percent, most of the of the our turnover of our sales is on wholesale. So to the restaurants, to the hotels, to the supermarkets. We supply all of all of these, supermarkets that I shown you, Metrocon zone spa. They are all our buyers, Rutac as well. And then we have two wine shops in Zagreb, and one wine shop we are opening these these days into Broadney. This is the first time that we are spreading our business outside of Zagreb. So we, are opening one shop into Broadney. And we also have one, bistro wine bar, which sells, more than sixty, sixty wines by the glass. We are importers of flavor, the VIN system. I don't know if you heard this is the preservation system. For the wine. So we can we can, everything that we have, we open by the glass. So it's very popular, during the lunch. Many people come there and, for a quick lunch and a glass of wine. And, of course, we have a web shop, which is, increasing in numbers, due to ECOVID. People are buying more and more over the internet. So we could we make a good turnover there as well. These are some of the brands that we represent. We are mostly focused on creation wise. We started as a creation one company. But, since two thousand and nine, we are importers of White Hennessee portfolio, of all of their brands, March and Dawn Weflix code on Permian Hennese Bebelix. That was kind and so on. And that actually, took our company to totally another level. Here, we increased the numbers. So that's why now we are, like, fifty fifty with between creation wise and and the imported wise. My Tennessee is a big, big part of our portfolio. Also, we import three little glasses for the last seventeen years to Croatia, and many other brands such as Pivot Tree tonics, Villa Sandy Proseco, Paneta wines from Sicily Machano Abona, donatella Cinelli Columbini, and many, many others. This is one of our wine shops. In Zagreb, this is where our headquarters are So in this year, two thousand twenty one, we sold seventy seven hundred five fifty, thousand bottles in twenty twenty one. A little bit more than half of it is creation wise. In here, I've I took some numbers just to get the the the insights of the view. We sold in this year, seventy five thousand bottles of Proseco, and twenty eight thousand bottles of Machandon Rutin Pidal. Zero seven twenty five. So this one label, we sold twenty eight thousand both of this year. So how to enter creation market, pretty much no big secrets, like, any other market, you can meet your potential partners on fares, whether it's, fair in Croatia, which also is open to foreign, wine producers or Provine or Vin Italy or wherever, with emails or phone calls. I personally get, like, see four emails a day, for, for, potential, partnership. I have to be honest, sometimes I don't reply, all of them because it's too many of them. Maybe, I don't know, if I try to find partner, I would also, first, think I would do is to send email. But maybe a phone call would be a better, but an idea and then email with short introduction. But the best thing is, a personal recommendation. For example, Stevy recommended, Alessandro to to host, moderate this presentation. His chances are bigger, that he will work today together. So you should, a personal contact and personal recommendation is always the best, the best way to to start something. As I said before, it's not that I don't reply to emails because, I don't want to, or we we we are, at this moment, maybe a little bit. We have two, two, much, labels in our portfolio. We can, purchase a small country. We cannot sell all that. When it comes, to that we need something. Usually, I I go to the winemakers. I I think that I will need or two regions. I I I wanted to cover all the regions in our portfolio to have one or two winemakers from Bordeaux from Bordeaux, Deepgram, from, Piamonte from Tuscany. So, basically, here we are at the moment, have all. We don't have Labruzco to make a long story short. The best thing is if you have somebody to recommend you, or if not, we'll be persistent, but, don't be boring. To increase your sale once once you are, you are in. Once you find once you found it, a distributor, first thing we do, is to invite, representative of of the winery that we started to work with, and we organized a testing for our sales team. We have five people working in our sales team on the field with restaurants, and, of course, the people who work in our wine shops, So all of us sit, on a tasting, and, the wine or representative, presents his wines himself. I mean, it's also, I believe, like, in any other market, no, no big secrets here. Market visits, sometimes, it's good to, go to the restaurants directly together with our sales team so the restaurants can know who stands behind this one. So if you meet them, give them a bottle for for the waiters or something, it's always a good tool. Sample POS material. This is, also something that's, our customers ask from us. So this is what we ask from, from the wineries, also some, maybe marketing budget for some activities. Again, pretty much the same as in every other market. And the best thing, what shows to be the best for us is the customer visits to the winery. So we organize, our best customers, best buyers of someone. For example, Vila Sande, as I told you, we sell seventy five thousand of bottles. Some big hotel chains are buying, this Prosecco and, serving to their customers next month, ten people from Sushan Yguar or from from this, hotel chain, we'll visit Viasanti, and we do it every year. This is something that's, that will, put, much stronger that will make this, partnership much stronger because once their people, they they see the winery, they see the castle, they see the the palace actually And, they meet the owner, for sure, first time, first thing that it comes to their wine mind when it comes to recommendation of a wine to their customers will be, willa Sandy. This is the experience that you will remember, and this is, something which which shows, best. And the last, but not the least, it's patience. Nothing comes overnight. Every new new brand on the market takes two, three, five years to to to get some numbers. So even the strong brands, in first year will not, again, a big, a big, sale. Again, back to Villa Sandy. We started fifteen years ago. In first year, we were selling one pallet, and people didn't even know about Troseco back then in Croatia. So little by little, little by little, we came to seventy five thousand bottles in fifteen years. So if you enter creation market or when you enter creation markets, don't be impatient on task. Can you order more? Can you order more? Because, usually, some of the brands that we import in first year, this is less than one thousand bottles. So you have to be prepared. It's maybe you will sell only one one pallet. In the first year. Then if the one is good, if you have a good distributor, if, you are doing a good job, the numbers will increase, and, you will be happy after three, four, five years. Basically, this is it. Just a short, just a short, few informations about situation after COVID in Croatia. As I said, we depend on tourism. So last year was critical, but this this year, was above all the expectations. So many numbers reached, two thousand nineteen. We had a very, very good summer season. So things are getting back to normal. Regarding COVID's criteria, now the situation is not very good, but, everybody had a chance to vaccinate. So who wanted they vaccinated, who didn't. They will not. I think fifty five percent is the is the percentage of, vaccinated people in Croatia. Yeah, the life goes on. In terms of, wine business, Of course, also, like everywhere else else in the world, web shops, boomed, and the the web sale, increased a lot. For example, Yvan Moffert, we solved eighty percent more in two thousand twenty one. In compared to the same period of last year. Last year was also COVID, but once it go it it goes up. Now it's a it's a really goes, in the big numbers. And also increased sales. Supermarkets, people are buying the ones in supermarket drinking at home, organizing private parties, more than they go to to the restaurants. Okay. Now the restaurants are opened again. So this life also is getting better than normal, but during COVID, as per markets were doing a really good job. And that's it. That's it. These are my contacts. My email address, my company, and my Instagram, if you want to take a look at it. So Tom is love. Thank you very much. Now we have time for, question and answers. I think you you did a very, clear, synthetic, you gave us a very clear picture of, your market, I actually have two questions. The first one is, are there any, because you work with very important brands. So I think you could, And you can give us, a specific picture on that, are there particular trends, on, I don't know, red still wines, sparkling wines, white still wines. What did you see in this year's? Yeah. In the last few years, there is a big trend for Sparkling wines and Rosay wines. These are the two categories that that, goes up a lot. Both, cheaper sparkling wines as prosseco, but also the champains, are going up. People are becoming aware that the champagne or sparking wine is not just, a wine that you open in a new year's eve, but also you can have it, nicely combined with, with your meal, or is that aperitif for, in any other occasion. Also, Rosay, is, getting more and more popular. And I would say that sweet wines are decreasing. They are going down. This is like and, in terms of white threats, I think Corissa's more, white wine wine country because, of the summer season, it's pretty hot. Many tourists drink wine on the on the coast. And when it's, thirty five degrees outside, you will, rather, drink white wine than, heavy red. And the second question is considering the success of Proseco that you had, in the last years with Villa Sandy, do you see, a good potential for other varieties, Italian, varieties, I mean, do you see a potential for Italian wine in your in your market in your country? Yeah. Yeah. As I said, Italy, France, and, of course, Spain, these are the countries that, imports the most In Croatia, there are many Italian wine lovers, in Croatia, actually, one of them was supposed to be today with me here, but he canceled. He quit. Similar to create we are neighboring countries. So, similar to Croatia. You have many different, varieties. And, wine culture in Croatia. It's, also increasing. So people like to get to know you were at, if they want to taste, rimitivo or Ramarone or some other types of wine. This is where I see, potential not maybe for cabernet sauvignon from Italy, but, for some good Vienna or some, some not so well known variety that is native to Italy, I think, people will, like it more and more. For example, we import Planeta I would say that we we maybe sell more of Planeta Kometa, which is made of Feano than Planeta, which is their most known wine, because people know Chardonnay from all around the world, but they want to see what is Vienna, what kind of wine is it. So indigenous varieties. Yeah. Okay. And there are any, Italian restaurants in Croatia because it's something that helped. Yes. There are, not many, but there are a few one of them is actually, one of the most popular restaurants in Agrib. It's called carpaccio. And, they were even during the COVID, only with the terrace, they were doing a a fantastic job. They were full all the time. Perfect. Do you have any question for Thomas Love? Hi. My name is Marchelon. I own a, digital platform, selling fine wines all over the world. So we are specialized in long life and expensive wines. I was wondering, whether, is there any opportunity even for distributors, who sell, I would say, wines, which they are, which they lack in availability, in this market. So is there any opportunity and which would be the best way to proceed? I didn't understand the opportunities for the creation white makers to sell over your platform? Well, for, my platform to sell to access to this market? I don't see why not. So you need, actually, distributor or or you send the or you send we are opposed to when somebody buys over the phone or We usually sell, directories with consumer. Okay. But we have never get any order from Croatia. It's probably we don't have the, a disability, you know, we don't have the so there are also other countries, for example, United States. We use a import channel to sell. So I was wondering if, for example, you or your company would be interested in, treating this kind of a very special wine, highly rewarded by international critics and, small and the big realities. We'll talk. Okay. We'll talk. But, regarding your that you didn't sell a bottle. I don't know what kind of marketing activities did you do there? How did you expect people to hear about your platform? Usually, we are, I would say, rank it down Google. And so who looks for this wine, they found us. Or on the other side, we have, of course, our customer portfolio and they look for, our products and, so how it works in your country? Is only made locally, or, for example, the people order directly, from some, wines abroad. Well, usually, they they buy locally what they can found locally, but the some of the wines, that you still, I assume, they are not available on creation market. So if somebody searched for that specific wine, he would, he would contact you directly. But then we have, I don't know how much is the post, the the post cost for the for this and, maybe this is something that's, moves people away. I don't know. I also didn't know about the platform, so it's hard for me to tell like that, but we can talk. Okay. Thank you. Other questions? My name is Monica Zachzka. I would like to ask you, how did COVID change the habits of one consumer's in Croatia, actually? Did you notice some changes? Some opening or new tendencies? Yeah. They drink more. This is great. They drink more. You said more whites and rosette to be more This, I didn't notice now that this is COVID. I will drink red, white, and red. I I believe that's, what they did if they like before COVID, they still, stick to the same, but I think they drink more. Yeah. Okay. Thank you. We will catch a door around. Yeah. You will get Thank you very much, for your attention, and for coming here. Listen to the Italian wine podcast wherever you get your podcast. 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