We caught up with Cristina Mariani-May, who with her cousin James is co-ceo of Banfi Vintners, shortly before she rang the closing bell on the NASDAQ stock exchange and just a few days after the Mariani family acquired Pacific Rim Wines.
The Banfi story really begins in the Vatican. John Mariani Sr., who founded Banfi, had been born in Torrington, Conn. in 1895. But at age 9, his father, a carriage maker, died. His mother returned to Italy with her six children to live with Teodolinda Banfi, her sister, who at the time directed the household staff of Achille Ratti, the Cardinal Archbishop of Milan, who would become Pope Pius XI.
Teodolinda apparently was like a sister to the Pope, since his mother had adopted her after she was orphaned, and the new Pontiff asked that she be in charge of his household. That was a radical request — no woman other than a nun had ever lived in the Sistine Palace. It took repeated requests before Vatican bureaucrats acquiesced.
“She was in charge of the entire household of Pope Pius XI,” Cristina told us. “She selected his wines, ran his house staff. And she had an amazing palate. She knew all about the wines of Europe.”
She taught young John all about the culture of wine, of food, of Italy and how to set a great table. John Sr. returned to America and in 1919 opened a wine importing business in New York’s Greenwich Village, naming the new business “Banfi,” in honor of his aunt. She died in 1938, and is buried inside Vatican City.
“So women in the wine business go quite far back,” Cristina said. “They just didn’t have the recognition; they were in the back of the house. But today, four generations later, there’s a woman running the business.”
“My grandfather’s business was tiny,” Cristina told us, “and as soon as he opened his doors, Prohibition came. They brought in a lot of products from Italy, including sea salts, spices and other specialties. They made medicinal bitters in their garage and sold them in the pharmacies as mild laxatives. The bitters flew off pharmacists’ shelves during Prohibition.”
The Birth of America’s Leading Wine Import
After Prohibition, John Sr. lined up agency agreements with a number of European wineries. They began importing “some of the great wines of the world in the 1950s, acting as negociants under the Banfi label. French wines, not Italian, were the popular sellers.”
But in the 1960s, John Mariani Jr., Cristina’s father, developed a vision on how to get Aemricans to drink more wine – “not by drinking drier wines and the great first growths of France and Europe, but one that’s a little softer, one that can be served in informal setting, to make wine drinking an everyday concept,” Cristina said.
“That led them to bring in lambrusco under the Riunite label.” Within a few years, Riunite had become the nation’s leading wine import, a position it held for 27 years. “It was a phenomenal success for the family,” she said.
Creating a Wine Estate
Riunite’s success enabled the Marianis to create a wine estate. “The goal had always been to help elevate the standards of Italian winemaking,” Cristina said.
“We probably could have purchased an existing wine estate, made an acquisition. But when my Father went back to Italy, he realized the winemaking culture was so deeply rooted in how previous generations made wine that it was difficult to forget the mistakes of the past. So he paired up with a younger gentleman who became our winemaker and said, ‘Let’s do it ourselves, from scratch’.”
They acquired 7,000 virgin acres in Southern Tuscany around Montalcino, Tuscany. That was the inception of Castello Banfi . They experimented with a number of grapes, including some noble French grapes, but they focused on the zone’s native Sangiovese for Brunello. Castello Banfi has become known around the world for the renaissance of Brunello Montalcino. It also was the first winery in the world to receive triple ISO recognition certification for exceptional environmental, ethical and social responsibility.
“We’re still importers in the U.S.,” Cristina told us. “We’re one of the leading importers in the U.S., but our heart and soul is in Tuscany.”
Cristina is responsible for the Italian operation, but lives in New York and maintains her office at Banfi’s headquarters in Old Brookville, Long Island. There’s a general manager in charge and an Italian team year-round at Castello Banfi. She shares CEO duties with her cousin, James, who focuses on imported brands, including the Chilean powerhouse Concha y Toro, as well as sales and distribution in the U.S. domestic market.
“Our business is growing,” Cristina said. “One of our strengths is that we represent a range of beautiful wines from several price points. Many importers specialize in either value wines or fine wines at higher price points. But we’ve been very fortunate to sell a range of wines that sell at different price points.
“Another strength for our generation is that we are privately held. This gives us a culture of decision-making rapidness that we have over some of our larger competitors. We’re not a small company, but we’re not one of the giants. Some of our larger competitors are publicly traded, they have a lot of debt, they have to answer to a lot of shareholders, and that burdens them.”
The fact Banfi is a private company is key, she suggested. “In the wine business you have to have a lot of patience. A lot of that comes from a family’s long-term commitment to capital investment. If you grow to a healthy size, family ownership becomes a significant advantage.
“The company is like our child,” Cristina said. “That sets us apart in these more difficult sales times.”
We asked about the wine glut in Australia and New Zealand, and she said it’s not directly impacting Banfi. “There’s a lot of wine in Italy that sometimes drives down prices. In South America there isn’t a glut. But in some categories, our competition is dropping prices quite rapidly. We have to be smart and wise about how we position ourselves.
“We judge it on the positioning of each product,” she said. “We’re fortunate that we have products we can fight with on price. But we also represent some suppliers that have strength in their category. So they are able to bring us the best juice at the best prices.
“We have a great range of products and prices. But we have to make the call in each market on each product.”
From the Vines to the Shelves
Banfi is an integrated company, growing, producing and importing, and Cristina says “that gives us an advantage. We understand the entire production and distribution channel. In the U.S. a lot of buyers don’t want to go through a middleman. As an owner, we can make decisions from the vines to the shelves. We can make sure the entire process and system is fluid.
“It’s hard to be a grower. It’s easier being a vintner. And it’s beautiful being an importer, because we can do the fun job of marketing and selling. We don’t have to worry about Mother Nature.”
But being a grower as well as a vintner and importer means “the suppliers we represent know we know they challenges and what it takes,” she said.
‘It Pays to Focus’
“In our industry, it pays to focus. We used to be in the distribution business, but we got out because we decided we had to decide whether to focus our resources on acquiring big spirits brands in the New York distribution market, or would we rather use those resources and invest in what we already had – wine making and importing. We decided it would be best to concentrate on what we do best.
“We ended up acquiring two of Brown-Forman Corp.’s historic brands – Bolla and Fontana Candida. B-F was divesting more of the wine business so they could focus on the spirits business.
“You want to be No. 1 in your category,” Cristina said. “That takes a lot of resources, energy and focus. And the way you can compete in that is to not spread yourself to thin. Pick one channel and do it the best you can, which is what we’ve decided to do.”
What Happened to TV Ads?
I asked about advertising. We used to see lots of ads for “Riunite on ice” on tv, but no more.
“We’ve been using trade channels more in each marketplace,” Cristina said. “Consumer advertising was a lot simpler in the 1980s. But that started to get harder and more expensive when the number of venues exploded. We still invest in radio and print. We do targeted marketing, because we have the data. We don’t do national ads anymore on the networks. We do some local cable.”
She said Banfi was looking to expand market share. “We always have. With a new generation at the helm, we have big thoughts on how to take our company ahead. But we’re very conservative. We’re not a family that makes a ton of acquisitions.”
Pacific Rim: New Winery, Same Strategy
The Mariani family recently acquired Pacific Rim Wines in Washington State. “They are one of the leading specialists in Rieslings. We see an opportunity for growth with Riesling in the U.S. and around the world. We said Pacific Rim Wines are going to be No. 1 in their category. They’re right behind Chateau Ste Michelle right now, but the potential is tremendous,” Cristina said.
Pacific Rim isn’t being integrated into the Banfi sales machine. “We’re maintaining a separate sales division because it can retain its uniqueness and agility to move in the marketplace,” Cristina said.
She noted that “Pacific Rim isn’t huge.” It produces 160,000 cases. “We’re not a company that gobbles up other brands and blows them up in size. We’re a company that does it carefully, properly. We place them properly and we build brands. We’re not dumping Riesling or Brunellos. We do it carefully, so we’re going to be major player in 15 years. The idea is to do it carefully, not to maintain a small boutique operation.”