Grappling With Grapes: Developing Strategy for the Poncini Vineyards

• Main Authors: Mary A. Barrett, Luca Gottardi, Ken Moores
• Format: Article
• Language: English
• Published: The Wine Business Institute at Sonoma State University 2018-02-01
• Series: Wine Business Case Research Journal
• Online Access: http://wbcrj.scholasticahq.com/article/3298-grappling-with-grapes-developing-strategy-for-the-poncini-vineyards.pdf

Brothers Lorenzo and Angelo Poncini are part of a family business in the Trentino region of northern Italy. It began as a trucking firm but diversified over the years. One such diversification is grape growing, which began in 1988. The Poncini family sends its grape harvest, currently Pinot Grigio, to a local cooperative, Gruppo Italiano Cantine, which makes and markets the wine. However, the vines the family originally planted – a major proportion of the planting surface – are getting past their prime and the quantity, if not the quality, of the family’s grapes will soon begin to decline. Lorenzo and Angelo disagree about what strategy the family should use to respond to this situation. Lorenzo favors grubbing up the older vines and applying for EU subsidies to replant, perhaps even with a new grape variety, Glera, whose popularity has increased sharply in recent years, like the wine which it is used to make: Prosecco. Grubbing up and replanting would also create an opportunity to mechanize the harvest, which would reduce the cost of hand-picking in the future. Angelo sees things differently. While he recognizes that the vines are getting old he is reluctant to grub up hurriedly and even more so to rush into planting a new grape variety like Glera, whose market staying power is unproven. The Poncini family business recently started using a family council to help it resolve family and business disagreements and, at the recommendation of Carlo, the oldest of the brothers, Lorenzo develops some strategic options to present to the council. The case requires students to adopt the position of an external member of the council and advise the family what it should do. As the Poncinis run a family business, the likely effects of each option on the family are as important as their financial effects.