The Acquisition of the Cora Company and The Response to new Challenges from the Market

Cora was one of the oldest and most illustrious companies in Piedmont. Toward the end of the eighteenth century, Giovanni Rovere, herbalist and distiller with a shop in Turin, was producing certain special aromatic wines, which were called “Vermouth”; the original formulas still survive. Among the vermouths he produced, one was made expressly and exclusively for the Royal House of Savoy, and was described in his recipe book as the “Wine which I make for His Majesty Carlo Alberto”. In those days, the sale of vermouth was limited to the city of Turin. It was only later, again through the efforts of the Cora company, that it crossed the borders of Italy, becoming in just a few decades the most popular aperitif on earth.
On 30 May 1835, the brothers Giuseppe and Luigi Cora purchased Giovanni Rovere's shop and established—in a public document drawn up in the presence of the Regio Luogotenente Vicario, a high public official in Turin—the company named Società G. & L. Fratelli Cora. This change in ownership marked the beginning of expansion for a company that, in 1838, was the first to export vermouth di Torino to faraway America, North and South.
The Cora brothers saw their business grow at such a vigorous pace that before long Giuseppe and Luigi decided to move the headquarters to Turin, in the shade of the porticoes overlooking the Piazza San Carlo; before long their company was one of the most important in the industry.
In 1854 the Cora brothers opened the Caffè Monviso, in Turin in the Piazza della Legna, later renamed the Piazza Venezia. Built on the rubble of the Caffè Catlin, an old and seedy tavern frequented by hoodlums and hooligans, the Caffè Monviso became a historical coffee house, the site of social and political gatherings in the years leading up to the Italian Risorgimento (culminating in national unification in 1861); Luigi Cora was himself a member of the town council of Turin and an influential participant in various liberal political associations.
In 1859, the Cora company purchased a plant in Costigliole d'Asti, in an area known as the Boglietto; the manufactory had previously been owned by the aristocratic Roero di Cortanze family, and had been used as a tannery.
After the two brothers died, the helm of the company was taken over by Luigi's son Enrico (1847-1915), who was in turn succeeded by his own son Mario (1878-1944). Mario succeeded in leading the company to the top of the industry, expanding notably in European and international markets. Mario decided to undertake and expand an advertising campaign that made the Amaro Cora—a bitter—into a worldwide success.
Despite that success and despite the company's great expansion following the Second World War, by the mid-1970s the Cora company too was caught in the general decline of the aperitif market.
Its purchase by Bosca in 1984 was in part a deal driven by a sense of duty: it would have been a blot on the collective honor of the industry for so venerable and famous a name to vanish or to fall into foreign hands. The Cora company—once Canei SpA had been sold—continued a glorious tradition of producing vermouth and spumante.

THE RESPONSE TO NEW CHALLENGES FROM THE MARKET

The sale of the Canei company pushed Bosca headlong into a new adventure. At stake was more than the development of a new and successful product. What was required was to face and solve challenges that were far more general, with social, psychological, and financial repercussions, as addressed by Peter F. Drucker in his book Innovation and Entrepreneurship (1985): investments were replacing the flow of goods as the prime engine of the international economy; automation was making labor an increasingly rare and expensive commodity; the expansion of the service industry was creating a new class of workers that was no longer proletarian or “proletarianizable”, as well as consumers who were conditioned by rapid processes of innovation and globalization.
Hence the problems experienced by many companies, large and small, in revamping. A necessity that becomes particularly pressing and evident when there is a generational changing of the guard at the helm of a company.
In a certain manner, a company can be compared to a soccer team; one difference is that in athletics or sports, a defeat is inevitably accompanied by a sense of crisis while in a company, problems can lie concealed for many years behind a series of objective and subjective screens, emerging only when it is already too late to remedy them. Since running a company is like competing in a championship season that never ends, the secret of survival lies in the capacity and determination to renew and improve constantly. Consequently, there is a dangerous tendency, especially in the generations that inherit companies instead of founding them, to focus on administrative issues instead of creativity, the old instead of the new, the customary instead of the innovative. The same fate can befall those who are in command for too long or those who—to return to the sports analogy—have won too often and for too long, and who therefore lose their aggressive ambitious edge.
In the case of the wine industry, at the turn of the twentieth century, the names of Gancia, Contratto, and Bosca—to mention only the names that still adorn signs and palazzi in the streets of Canelli—represented the crème de la crème of the world spumante industry. Nowadays, they have lost much of their luster. Bosca (as a producer of wines, vermouths, and classic spumante) is no exception, though it is one of the very few historic wineries still owned by the founding family, free of international ties that limit the company's independence.
All of this had a direct bearing on the company's strategic choices for the future: to decide whether to carry on with a product that was still extremely profitable, but no longer on the rise, or to make a clean break with past and present in order to become technologically and psychologically free to pursue an entirely new activity, as yet undeveloped. Abandon the technical and incremental in favor of the visionary; abandon evolution in favor of revolution. Among the many inspirations for this approach was Nicholas Hayek, founder and chairman of Swatch, the man who restored Swiss dominance in the world watch market, following the Japanese invasion of the Seventies and Eighties, by entirely reinventing the watch as a product, transforming it from a durable object into a frivolous impulse sale. Another example, just a stone's throw from Canelli, was Giovanni Ferrero, who, starting from scratch after the Second World War, had shown that a simple idea, achieved with limited capital, could lead to the creation of a world-class corporation, based on a broad array of innovative sweets and confectioneries, responding to (and sometimes creating out of whole cloth) the tastes of a globalized consumer audience.
In the field of wine the weight of tradition seemed to have a disproportionate effect upon the decisions of entrepreneurs. In the industry of spumante, in particular, there had been no particular developments aside from “President” by Riccadonna, mentioned above. Canelli, for more than a century the unrivaled capital of spumante, had begun slowly to decline. Bosca would have to face the challenge of this atmosphere of stagnation, as well as the increasingly fierce international competition. That competition left two equally dangerous options open to old family-run companies: either to make a deal with a much larger group in the illusory belief that the new boss would leave the old company independent while offering expert managerial skills; or else produce anonymously for huge distribution chains that offered short-term earnings but which put the now “identity-less” company at the mercy of a few huge clients, with which it now had no negotiating leverage.
The decision to concentrate all its resources in the field of spumante was, for Bosca, a natural decision, since this was the only field in which the company had enjoyed any considerable success over the course of its long history. That decision, however, could not be a purely technical one. If the alternative was to produce a cloned commodity and lose one's identity, over a relatively long term, and independence, then it would be necessary to opt decisively in favor of independence, and therefore in favor of both non-global products and independent thinkers. The formula that was best suited to the goal at hand seemed to be franchising or joint ventures with small and medium-sized local entrepreneurs who were seeking independence and who were willing to handle new products in their territory. The business model was McDonald's; to imitate the international fast-food giant—with the appropriate modifications—the Bosca company would have to abandon the traditions and mentality of spumante and vermouth.

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