Italy, Israel and the Rest of the World

The Italian market seemed to offer a great deal of sales resistance. In order to break down that resistance, Mario Martinengo developed a special new transparent refrigerator/dispenser. At the base, there were three spouts into each of which a bottle could be overturned so that by simply pushing a lever, a stream of chilled bubbly Canei would pour into a glass beneath. This remarkable and handsome pourer, specially manufactured for Bosca by a company in the Marche region of Italy, was delivered to thousands of bars and cafés throughout the Italian peninsula. The revenue from this operation was minimal, but it was more than paid for by the promotional and publicity repercussions. In Italy, sales of Canei reached a level in 1988 of no fewer than three million bottles.

Lecture by Italian president Oscar Luigi Scalfaro at Bosca One factor that contributed to its popularity at home in Italy was the foundation of the “Order of the Friends of Canei”, a gastronomic brotherhood founded and supervised by Giovanni Goria, a lawyer and a world-famous gourmet, who assembled an array of gourmets from every walk of life—from Italy's former president Oscar Luigi Scalfaro to Giuseppe Lazzati, rector of the Catholic University of Milan, from flautist Severino Gazzelloni to popular cabaret singer Paolo Conte, from Agostino Cardinal Casaroli to painter Mino Maccari and sculptor Luciano Minguzzi. These admirers of Canei played a crucial role in opening new horizons for a product that offered new opportunities for consumption.

ISRAEL

In Israel in the Seventies, table wine was not particularly popular, and locally produced wine was consumed almost exclusively for religious use. Barely twenty thousand bottles were exported from Italy to Israel every year. Canei triggered a veritable revolution. In the first year, sales topped a million bottles, even before rabbinical authorization was issued, giving it a broad market, in Israel and around the world. The engine driving this popularity was Amiel Epstein, a fascinating character who was successfully carrying on the liquor-importing business that his father founded after fleeing Czarist Russia. Amiel Epstein was a descendant of those first families of idealistic and enterprising Zionist pioneers who were responsible for creating Israel. He immediately understood that in a small, close-knit, gossipy market like Israel, it would be enough to get people to taste Canei and it would immediately begin to sell. Once sales rose above four million bottles a year in a market of threee million potential consumers - including children and Muslims - the clash with the vested interests of the few, well-protected local wineries was inevitable. The Bosca company, loyal to its traditional policy of franchising and joint ventures, decided to begin producing its spumante in collaboration with the leading local wine-maker, Carmel Misrahi

THE REST OF THE WORLD

At the time, Israel was not the only country where Canei was making inroads on the local market. Canei was also being produced in Sant Joan Despí in Catalonia, near Lille in France, at Linz in Austria, in Brazil at Andradas in the state of Minas Gerais; it was being marketed, moreover, in over thirty nations. This success of the Bosca company, or, to be more precise, of Canei, represented a mystery to the older and, to an even greater degree, the newer wine-making companies. Everyone tried to understand how a family-run company that in the past might have enjoyed a few moments of glory but which later had settled for an existence marked by neither problems nor achievements could then have returned so spectacularly to the limelight of the international wine market with a totally new product of its own invention.
Ernest Gallo, the king of California wines, wanted to understand. The son of Piedmontese émigrés, he had entered the wine business with his brother Julio at the end of Prohibition. He had gone on to create the largest wine-making company on earth. He was fascinated—more than worried—by the fact that sales of Canei by Bosca had grown in England, in a single year (1986 to 1987) from twenty thousand to two hundred thousand cases under the competent supervision of Lionel Motais (with whom Bosca had entered into a joint venture in the United Kingdom).
This subsidiary, located in a small office in Lutterworth, in the heart of England, with a manager and two secretaries, had managed to conquer the British market and, over the course of little more than a year, to transform Motais's investment from a few hundred pounds sterling into several million.
Ernest Gallo telephoned Luigiterzo, and invited him to come pay a call on him immediately in California. Gallo offered no explanation for the invitation, but he clearly knew that no vintner on earth would turn it down. During the meal he set out for the Boscas in his palatial California estate in Modesto, the reason for the invitation became clear: he wanted to know why a little company like Bosca UK was so successful while his own company, which employed forty and had offices in London, was struggling to establish itself.
The answer, obviously, lay in a rejection of conformity and a marked capacity for innovation. This strategy, however, entailed risks concomitant with the level of success. Indeed, gratifying though it may have been, the boom in sales of Canei masked a serious risk: it tied the future of the Bosca company to a single-product strategy, with all the short-term advantages and long-term dangers that a “monoculture” entails. There were two alternatives, then: either go on exploiting Canei, by this point a mature product, struggling with enormous advertising expenses against imitations and competitors, or else sell this “goose that lays the golden eggs”, reinvesting the proceeds from the sale in a renovation of the company.
The decision was made in 1989 with the sale of Canei Spa to the French multinational Pernod Ricard, which even today continues successfully to produce in Canelli.

Top | The Acquisition of the Cora Company