Structure of the producing side of the wine industry: Firm typologies, networks of firms and clusters

Étienne, Michel; Coelho, Alfredo Manuel

doi:10.1016/j.wep.2012.12.002

Cited by 22 publications

(13 citation statements)

References 10 publications

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“…In fact, most production areas are characterised by numerous networks, some formal and others informal. Most of the Italian local production systems specialising in grapes and wines differ from the clusters operating in other wine producing countries (Migone and Howlett 2010;Montaigne and Coelho 2012;Dana et al 2013). The difference lies in the importance of the local social capital stratified there, which typically characterises industrial districts (Trigilia 2005).…”

Section: Success Drivers Of the Italian Wine Sectormentioning

confidence: 99%

The Italian Wine Sector: Evolution, Structure, Competitiveness and Future Challenges of an Enduring Leader

et al. 2021

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The Italian wine supply chain has performed well in recent decades both in terms of profitability and success on the domestic and international markets. This is despite the fact that it is fragmented in terms of products, prices and consumption context, and, in particular, despite the fact that it is characterised by an organisation that hinders the full exploitation of economies of scale. This paradox has not been investigated in literature. We propose several elements in support of the hypothesis that the Italian wine sector’s success is linked to favourable elements of the Porter Diamond Model (5 out of 6) but also to the “district” nature of a large part of the sector. The presence of numerous networks, some of which are formal and others informal, gives most Italian local production systems specialising in grapes and wine the characteristics of industrial districts, due to the local social capital that is stratified there. These networks include operators such as Cooperatives and Consorzi di Tutela, upstream and downstream industries and services, tourism, research and educational bodies. Such networks can overcome the weakness represented by the low concentration and small average size of the operators. To support this hypothesis, we analyse the historical evolution of the sector and its drivers, the structural features of the different phases of the wine chain (grape growing, winemaking, bottling and distribution), the market relationships within the chain and the national and European policies favouring the sector. This analysis also underlines the differences between the Italian sector and its competitors from the Old and New World.

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Section: Success Drivers Of the Italian Wine Sectormentioning

confidence: 99%

The Italian Wine Sector: Evolution, Structure, Competitiveness and Future Challenges of an Enduring Leader

et al. 2021

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Section: Introductionmentioning

confidence: 99%

“…An increasingly globalised wine market, in which the international wine industry has been defined as an oligopoly with "fringes" (Montaigne and Coelho, 2012), has brought enormous economic benefits to New World countries. This has also been because of a growing industrial concentration of wine-making companies, in which the small-scale viticulture sector in many traditional, European producer countries has not yet been able to respond appropriately (Rebelo et al, 2010;Pesme et al, 2010;Montaigne and Coelho, 2012). The reconstruction of these phenomena has not been easy, whether it be because of the paucity of public information sources or because many of the purchasing companies do not make available information regarding the value of their commercial operations.…”

Section: Introductionmentioning

confidence: 99%

“…Specifically, the study will focus on a single case study in Sicily, the Cantina Cellaro wine cooperative, which has established a relationship of quasi-integration with the Italian wine business Farnese group. According to Montaigne and Coelho (2012), a quasi-integrated cooperative has close ties with wine merchants. The latter control and supervise the wine-making process on the basis of a contractual arrangement, with the aim of obtaining wines which meet the demands of their own customers.…”

Section: Introductionmentioning

confidence: 99%

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The Sicilian cooperative system of wine production

Borsellino

Varia²,

Zinnanti

et al. 2020

IJWBR

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Purpose The purpose of this paper is to verify whether, besides the traditional organisational models mainly implemented by wine-making cooperatives, more modern and hybrid organisational forms can be profitably applied within an increasingly competitive wine market. Design/methodology/approach The study outlined in this paper deployed a mixed method. Specifically, an archived analysis, a survey and a descriptive case study (including visits, interviews and documentary analysis) were the methodological techniques used in this study, which were “in series but integrated” between themselves. In this paper, the landscape of Sicilian wine cooperatives is described by collating and processing different types of statistical sources, which have been integrated by direct surveys undertaken in 2017. Thereafter, the study focussed on a wine cooperative with a specific business model and a strategic edge by analysing its strategic choices and main structural and governance characteristics. Within this case study, a financial ratio analysis, which was based on 2011-2017 financial statements, was conducted to analyse the profitability, financial balance, capital structure and debt relationships of the wine cooperative. Findings The Sicilian wine cooperative system is still predominantly characterised by partial and vertical integration, implemented by cooperatives which elect to sell mainly bulk wine to wine merchants. In such a context, there is scope for other degrees of integration and strategic inter-firm alliances; the latter includes “vertical quasi-integration”. The study demonstrated how the wine cooperative under investigation is overcoming the structural problems of the regional wine sector and why it is retaining such a strategic alliance with one of the most important Italian wine conglomerates. Indeed, it has acquired greater strength and reliability since its collaboration with the aforementioned wine company. Thus, total revenue and the company’s market share of packaged wine have increased. However, there are still margins for improving sales’ profitability. Research limitations/implications This study has territorial limitations but Sicilian wine cooperatives generally play an important role in the regional, Italian and European wine industries. As such, this research should be considered as an exploratory study, deserving further investigation into different strategic choices within the wine cooperative system by performing cross-case comparisons. Results may also be useful in orienting cooperative strategies in Sicily (or further afield) to small-to-medium wine cooperatives, often lacking specific abilities relating to the distribution, marketing and selling of their wine. Public agricultural policies may also be enlightened by these research pathways. Originality/value The authors contend that their study provides hitherto missing information relating to inter-firm strategic alliances, which wine cooperatives might implement to enhance their competitiveness and survive in the long-run.

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“…Due to the "one-member-one-vote"-principle, cooperative members have limited influence in the decisionmaking. That means that "irrespective of the amount of grapes or wine that members produce, all members have the same voting power in assemblies" [51]. They always have the possibility to leave the cooperative but have to face switching costs.…”

Section: Bargaining Power Of Suppliersmentioning

confidence: 99%

Competitive Strategies for Wine Cooperatives in the German Wine Industry

Richter

Hanf

2020

WEP

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The wine industry is significantly affected by globalization and changes in consumption habits and shifts in lifestyle, which lead to changes in the market environment and intensity of competition in the wine markets. Overall, wine cooperatives have a market share of more than 40 % in Europe. In Germany, they account for around one third of the total wine production. The decreasing number of wine cooperatives and their members leads to the assumption that wine cooperatives have difficulties adapting to the different market environment and though, need to select and implement competitive strategies. The aim of this paper is to identify and develop competitive strategies for wine cooperatives in the German wine industry. Therefore, the external forces affecting competitive rivalry in the wine industry are being evaluated for wine cooperatives in Germany. A qualitative approach has been applied including in-depth interviews with managing directors and chairmen of the board (n=15). Data were transcribed verbatim and content analysed. Results showed that the intensity of rivalry among existing competitors is high. Bargaining power of wine cooperatives towards buyers and suppliers strongly depends on their size. However, generally the bargaining power of retailers is high, although this depends on the retail channel (discounters, food retail, specialized retail, specialized wholesale, gastronomy). Five main strategy dimensions emerged: (1) the cost leadership and cost focus strategy, (2) the differentiation and differentiation focus strategy, (3) collaboration among producers, (4) offering additional services, and (5) options for improved membership relations and increased youth involvement.

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Structure of the producing side of the wine industry: Firm typologies, networks of firms and clusters

Cited by 22 publications

References 10 publications

The Italian Wine Sector: Evolution, Structure, Competitiveness and Future Challenges of an Enduring Leader

The Italian Wine Sector: Evolution, Structure, Competitiveness and Future Challenges of an Enduring Leader

The Sicilian cooperative system of wine production

Competitive Strategies for Wine Cooperatives in the German Wine Industry

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