What's needed for wine trade growth

Thursday, 2. February 2017 - 14:15

Dr Ludovica Leone, Bologna

Dr Ludovica Leone is Adjunct Professor at the University of Bologna Business School, where she is the director of the Global MBA in Food and Wine, now in its sixth year. She spoke to Meininger's Wine Business International about the both the course and the most significant issues facing the wine industry.

There are many Wine MBAs now springing up. What’s different about the Bologna MBA in Food and Wine?

The plus of our program is that you have the possibility of spending one semester on typical MBA courses. Everyone studies altogether, alongside people who concentrate on green energy, or on fashion and luxury goods, for example. They have the possibility of having a classical MBA, where they study all the toughest courses you find in an MBA – finance, marketing, strategy – and then they split up into different classes.

We have everything that a normal business school has, but what is important for us is to create value for the Emilia-Romagna territory that we are in, so our courses started from the needs of our region. We are connected to the food and wine industry, the fashion industry, the automotive industry, to automation and high tech.

We focus on the needs of industry. For instance, I am launching an intensive program on how to start up an Italian restaurant.

What do you see as one of the most significant issues facing the wine industry?

Growth. When students come here, they get a full year of experience, tasting the excellence of the Italian food and wine industry. We convey knowledge of Italian products and the excellence of them. But one of the biggest challenges is to learn how to scale up this excellence. There is a challenge in terms of growing while retaining the ability to maintain the quality. That’s one of the problems of super small, family-owned companies.

And what do you see as a particular issue for family-owned companies?

One of the biggest problems is the passage between generations – the handover. Many companies do not know how to manage it, so sometimes maybe the entrepreneur who is the father or grandfather was the one with the vision and the son or daughter might not have the same passion or interests, so involving the family in the business is not so easy. Sometimes there are emotional or relational problems. There are many studies that show that when you work with family or friends – what’s known as affective connections – it’s sometimes very tricky. That’s one problem.

Another big problem facing small sized companies is how to scale up or grow, and this means the ability to look abroad. Italian food and wine consumption is saturated and companies cannot grow much in Italy – but we can grow internationally. But many companies lack this kind of competence. We try to train new managers and also new entrepreneurs, on how to go abroad.

Another problem with family-owned companies is the incompetent family member. What do you do in this situation?

If I have to be a consultant to a company with this kind of problem, one thing you can do is try to assign competencies and to craft the job so it’s not damaging for the company and that brings satisfaction for the person. No person has no competency, so finding an exit for this person is the last resort.

The last thing to do is to build the competency of the person by sending them to study. Many times in the school, we have second generation entrepreneurs. We have students who work in a family-owned company and maybe they know the business, but they don’t have the competencies to write a business or a marketing plan.

How do you help companies build an export business?

What we try to do is offer an international faculty to our students so they will be exposed to different experiences. We get a lot of people from the industry to teach. This year we introduced a stream of seminars across all the MBAs, not just food and wine, based on internationalization. This year we invited a consultant from the wine industry to explain what it means to do business with the US market, from the cultural aspects to the most technical aspects.

Another thing we have is a business development lab. Real companies ask us to do a project for them that most of the time is on internationalization – how do I go to China, or India? And the students need to think about it and work on it.

What skills does the wine industry lack?

I think one of the biggest in the wine industry – and here I’m talking about the high quality end – is that they don’t know how to communicate the quality.

What’s the best way for a producer to communicate value?

One of the tools is storytelling. People say the product should communicate by itself, but I think even if you have a great product, how do people find it? The right way is with the story, to communicate the authentic story behind the product. People want to be engaged. The connoisseur segment is only a niche, so you really need to catch attention using stories.

What other problems do you think the wine industry needs to overcome?

A big problem is related to the dimension of the companies; we have small dimension companies plus a high fragmentation of the wine industry, so one of the challenges is to get people to work together and go beyond the idea of the Consorzio [a regional body]. It’s really good that the Consorzios protect the idea of the denomination, but they are not the right tool for export. What’s happening lately is that companies are trying to go abroad together.

For someone from the New World, one of the most surprising aspects of Europe is the general unwillingness of colleagues and even regions to work together. This is a particular problem for Italy. Why?

It’s a cultural problem. Every town in Italy has a different recipe for the same dish. Here in Emilia-Romagna we have two towns which are 30 minutes apart by car, but which fight over who has the best tortellini. And this is how Italy has always been, from the Renaissance on. These differences have not allowed companies to work together. In many areas there is also a suspicion of the other person, which we inherited from the First World War, when people were battling on the borders.

How much does it cost to do the MBA and how long does it take?

The fee is €27,000.00. You basically start in September and then are in class until the first week of June more or less, and then students will have 500 hours of internship or work on a personal project. The 500 hours is more or less three months in a company, developing a project or then you can develop your own entrepreneurial project.

Many want to come to Italy because they want experience in an Italian company and to discover Italian food and wine.

It is suitable for international students, not just Italians. Over the years MBA students arrived from 90 countries. We also have scholarships based on merit and an agreement with a national bank to get an honour loan.
Interview by Felicity Carter

For more information, visit http://bolognabusinessschool.com/hp/global-mba/mba-food-and-wine/