Whose bubbles are these? Winery brand versus Territorial brand

In the wine sector the concepts of brand and territory are closely intertwined. In the last decades the dichotomy between brand and terroir has become even more relevant because of the changes in the wine industry and consumption’s habits. A brand is a name, term, sign, symbol, or design, or a combination of them, with the aim to identify the goods and services of one seller or group of sellers differentiating them from those of the competitors (Vlachvei et al., 2012). The brand is an integral part of any wine business and can be used to communicate the quality and the values of a winery. The strongest brands become synonymous with fulfilling a defined set of expectations, are valued for their identity and people have built emotional relationships with them. Although the consumers can recognize the company’s brand, the purchasing choice is driven by different other attributes, included variety, country, vintage, alcohol content, etc. The denomination of origin (DO) can be considered one of the attributes of the wine. In this sense wine brands can demonstrate their commitment to a specific region in order to build a strong connection with their consumers. But at the same time, DO is also a regional or territorial brand, especially in EU traditional producing countries, like France, Italy and Spain, which states the quality of the wine and the collective reputation. The specific product and process standards confer wines belonging to a given DOC/DOCG-specific quality characteristics, substantially differentiate each DOC/DOCG from the others and build the DOC/DOCG collective reputation that gives access to a potential premium price on the final market based on consumer willingness to pay for terroir wines (Hertzberg and Malorgio, 2008). In fact, the link between wine and its origin is one of the most important aspects of wine production (Crescenzi et al., 2022). Every wine has a distinct character and flavor that is derived from the unique terroir of the region in which it is produced, with the physical environment, climate, and soil that can have a great impact on the characteristics of the wines produced. At the opposite many large-scale firms competing on international markets and more oriented to the New World, like US, Australia, Argentina, Chile and South Africa, adopt the concept of quality hinges more directly on consumer preferences and is conveyed through industrial brands. The alternative ‘brand-based strategy’ for quality differentiation relies on the individual reputation of industrial firms. The aim of the present work is to analyze the performance of a winery in the Franciacorta DOCG region compared to that of the other wineries belonging to the local DO consortium. Methodology Time series analysis is a powerful tool used to analyze data over a period of time. It is used to identify trends, patterns, and correlations that may exist between the variables of interest. A time series model approach has been adopted in order to analyze the difference between the economic performances of the biggest Franciacorta DOCG winery (from here: the winery) and the performance of the other Franciacorta DOCG wineries associated to the Consorzio (from here: the Consorzio). An exploratory study on national and international sales data has been done, comparing different products typologies (i.e. Brut, Satèn, Rosé, etc..), different distribution channels and different country’s sales destination (Italy, Germany, USA, etc…) over time (2011-2022). The dataset includes about 700.000 observations from January 2011 to September 2022, representing the daily invoices issued by wine companies for the sales of the different wine products both addressed to Italian market and to export countries. The work employs a log-linear regression 2 approach which uses as dependent variable the revenues of the individual invoices issued during the 2011-2022 period. The explanatory variables considered are: i) the sales channels, as the large retailers, the Ho.Re.Ca., the direct sale and the importers’ channel; ii) the Franciacorta DOCG wines produced both by the winery and by the Consorzio; iii) the countries in which the Franciacorta DOCG wines are sold. Results and conclusions The results show the different performances by brand and terroir wines in diverse markets and for specific typology products. As an example, main results on the products typology, regards the Satén typology by Consorzio, which performs better than that of the winery, while, at the contrary, the Brut typology of the winery has a higher coefficient than that of Consorzio. This can be linked to the different power of the winery brand related to the wine typology, for which Franciacorta Satén DOCG is a highly recognizable territory brand, strongly rooted in the territory. At the opposite, the base wine of Franciacorta zone, the Franciacorta DOCG Brut, is less powerful and known than the winery brand, confirming the strong brand identity of the winery. Other evidences are related to the distribution channels, with the large retailer’s channel that is characterized by a significative power of the winery brand, while the Ho.Re.Ca. channel is strongly represented by the territory brand. Future step of the research will be address to explore the difference between the products exported and the export country’s market of destination. Moreover, will be possible focusing the research on the differences between countries about this topic, specifically between the European and the no-European export countries.