Joaquin Costa: “Innovation and technology are the secret to produce with the highest quality and food safety”

We make eco the Vinetur interview with Joaquin Costa, Head of Oenology at Freixenet Group

The Freixenet Group is one of the leading companies in Spain in the wine sector, since it champions innovation and tradition as hallmarks of identity. Its Christmas advertising is already a benchmark in the country, but beyond its fame its capacity for resilience and growth stands out.

Joaquín Costa is the Group’s Director of Sales and Marketing in Spain and in this interview he presents his vision of the sector and his experience in recent years in which they achieved a 5% growth in sales despite the situation generated by the pandemic of the Covid-19.

Freixenet, a family business founded in 1914, is considered the largest exporter of beverages in Spain and the world’s largest manufacturer of cava. What are the keys to achieving this position?

In my opinion, much of the success over the years of the Freixenet Group is the result of the balance between tradition and innovation, being a company at the forefront of its sector while committed to the roots and history of each one of the products.

In addition, adaptability and anticipation to any circumstance are key in any business, not only for its own survival, but also to grow and reach new goals. The Freixenet Group, in its more than 100 years of history, has been able to adapt and anticipate, with clear and defined objectives in the short, medium and long term.

And, of course, a key aspect of the company’s history is the focus on the consumer. All the wines and cavas that Freixenet has produced throughout its history have always sought to respond to the tastes and needs of our consumers, having been able to surprise with innovative products and also to create emblematic products such as Carta Nevada or Cordón Negro, cavas that continue to be global benchmarks today.

2020 has been a very turbulent year due to the Covid-19 pandemic, in fact recently the vice president and CEO of the group, Pere Ferrer, stated that in Spain sales were greatly affected by the collapse of the HORECA channel and the lack of tourists, but that export saved the year. What have they learned in 2020 and how did they cope with the difficulties arising from the pandemic?

2020 has been an unprecedented year for everyone, in which we have had to adapt our operations and our way of working to protect our equipment and to adapt to market needs. In our specific case, we have redesigned the commercial strategy with the aim of reinforcing the competitiveness of all the brands, with a specific development for each one of them, putting, as we always do, the focus on the customer and the consumer.

In addition, like the vast majority of companies, at the Freixenet Group we design a set of actions adapted to the different work teams, including confinement, teleworking and high prevention measures in the production and logistics area.

It has been a very intense year and one that has allowed us to demonstrate, once again, the resilience and strength of the Group, even beating the sales record with the Freixenet brand worldwide, after selling almost 100 million bottles, which is equivalent to a growth of more than 5%.

From an overview, how has 2020 been for companies in this sector?

As we said, this last year has been very complex, marked by an uncertain and exceptional context, in which all sectors have been affected in one way or another. In the case of the wine and cava sector in Spain, the impact has been very high, even more than in other markets, both due to the prolonged closure of the Horeca channel and the lack of tourist activity.

As a sector, we have a key challenge, which is to be able to adapt to a new, changing and uncertain scenario. It is necessary to continue working on innovation and strengthening our brands. In the case of the Freixenet Group, we also have the advantage of being a global company, being present in more than 140 countries and exporting more than 80% of our products. In addition, in the final stretch of 2020 and in the Christmas season, where we have the bulk of sales, the result was better than expected.

What positive aspects could be highlighted from this crisis?

As I advanced in the previous questions, this 2020 we have demonstrated the resilience, strength and adaptability that have led us to be a centennial company. In this context, we have reinforced one of our main strengths as a group, which is our wide product portfolio in both sparkling and still wines, launching, for example, a range of wines under the Freixenet brand, with which we have already exceeded the objective of all of 2021. On the other hand, 2020 has highlighted the importance of having an adequate balance of sales between channels (on-trade and off-trade in this case).

In addition, new trends such as the ecommerce channel, which was already developing with strong growth since before the pandemic, have grown and established very quickly. The fact of having for several years a specific online platform dedicated to the D2C channel, , where we offer our extensive product catalogue, has allowed us to double sales in 2020 compared to the previous year.

Consumption habits seem to have changed, what is the perspective that they have from Freixenet?

With a brand like Freixenet, which has a broad and diverse product portfolio, it is difficult to synthesize typical consumer habits. In our specific case, for decades cava has been associated as a drink for almost exclusive consumption for the celebration of great occasions, with a special focus on Christmas. In this regard, we do identify growing trends of greater interest on the part of the consumer in enjoying sparkling wines also at other times of the year and for different occasions – as an aperitif, in the form of a cocktail or as a pairing for a meal. In fact, the motto of our last Christmas campaign is “I have to celebrate it”, inviting to celebrate many moments of the day to day, since life is how you celebrate it.

Other examples are our recent launches such as Freixenet ICE, Freixenet Prosecco or the most recent still white and rosé wines, all of which are very well received by a very wide spectrum of consumers. They seek to reinforce our innovation and communication strategy by developing these new moments of consumption.

Another trend that we are detecting is a strong development in categories such as non-alcoholic sparkling wines, where the Freixenet brand (with the Freixenet Alcohol Free product) is the absolute leader with more than 80% market share.

In any case, the Covid-19 crisis has also transformed the way we interact with our consumers; They ask us for agility, trust, and guarantees when buying our products and our duty is to work honestly to value a more modern, efficient, sustainable and responsible management in order to respond to these new needs of our consumers.

Within the framework of the same statements, Pere Ferrer stressed that 2020 was a “good year, with significant growth in Germany and the United Kingdom” and that 2021 is going “very well”. What are the forecasts for 2021 for your company and for the sector in Spain?

2021 is being a year, without a doubt, much better than 2020, but still marked by a context of uncertainty and instability. So this 2021 we continue working to consolidate ourselves as a leading brand and reference in the sparkling market worldwide, to expand into new categories, as well as grow in relevance throughout the year. Specifically, with the Freixenet brand we expect to sell approximately 105 million bottles, which would be a record for us and a growth of almost 6% compared to 2020 .

In Spain, the growth target is even higher, thanks both to the results that brand innovations are having as well as the gradual elimination of restrictions for the hospitality industry and the growing return of tourist activities.

In which countries will you focus your internationalization strategy?

Freixenet is a company that is already present in more than 100 countries, exporting 80% of our products and with brands such as Freixenet, market leader in many of them. It is key for us to continue reinforcing innovation, with the utmost appreciation and respect for the quality and tradition of our products. In this sense, it is noteworthy that the most successful products globally are the emblematic Cordón Negro and Carta Nevada cavas, along with more recent lines such as Freixenet Prosecco or the Wine Collection.

You have recently made the leap into the still wines sector with the launch in Spain of the new Freixenet Wine Collection, how would you describe this new range? How has it been received by consumers?

After the international launch, we recently announced the launch in Spain of the new Freixenet Wine Collection , which is made up of a white wine and a rosé from the new “Special Selection” range. The reception by consumers is being very good. It is in fact far exceeding the initial objectives set, so we expect a very good Christmas season with this range.

They are two DO Catalunya wines characterized by their fresh and fruity character and with the aroma of flowers. With this new launch, we sought to concentrate the spirit of the Mediterranean, with pleasant, versatile wines according to the consumer’s taste. They are also characterized by their unique and iconic design, following the elegant and sophisticated image that defines the brand.

Our extensive history of more than 150 years of tradition with sparkling wines allows us to embark on this new challenge with the maximum guarantees of quality, and the initial reception in various markets shows us that these new wines are perfectly adapted to what the market seeks consumer.

Innovation must always be a pillar in any company and at critical moments it must become even more important. We are proud to say that innovation is part of Freixenet’s DNA, as this latest launch demonstrates.

This year marks three years of the agreement between the families that own Freixenet and the German group Henkell, what is the balance? What has the German group contributed to your strategy or vision?

The union with Henkell has been very fruitful and satisfactory. Throughout these three years, both parties have maintained enthusiasm and confidence in the present and future of the group, with an eye on continuing to work and consolidate ourselves as the world leader in the sparkling wine sector.

Henkell, like Freixenet, is a company with a marked family character, which makes understanding and tuning very easy on a day-to-day basis. Furthermore, this alliance has allowed us to strengthen our presence as a global company, being able to offer the highest quality of our wines and cavas to new markets and consumers. Through our union, we have established ourselves as world leaders in our segment, and we maintain our forecast and ambition to reach 10% of the world market share.

In terms of advertising, your Christmas television spot has become a true benchmark. What are you looking for each year with this ad and how have the messages you send evolved? What are the lines you are working on for next Christmas?

Freixenet advertising has been a benchmark for more than 4 decades, with campaigns that are part of the history of advertising and the collective imagination of society. Over the years, our advertising investment has adapted to the different media and the consumer. For example, the presence of the digital channel is becoming more and more relevant, which implies that digital marketing absorbs an increasingly high part of the budget. In the same way that, in order to be closer to our consumers, we have opted for social networks, as a channel to send brand messages and interact with users to get to know them better.

The motto of the last Christmas campaign, “Life is how you celebrate it” is extensible to the whole year, since what we wanted was to highlight the importance of valuing and celebrating also the little moments of the day to day, especially in such complicated years like the past and the present. This campaign responds to the medium and long-term objective of the Freixenet Group: to promote and develop cava consumption not only at Christmas time. We want the consumer to be aware that it is also important to celebrate the small challenges of our day to day.

Finally, wine tourism has positioned itself very well during these months in the tourist market and has emerged as a safe form of travel and leisure. How does Freixenet develop this line of business?

Wine tourism has been a very important bet of the Freixenet Group for years. Without a doubt, it is an important pillar for the company because it is a way of making the winery and our products known.

The natural environment of our wineries, as well as its historical and architectural wealth is of great interest and allows consumers to approach the world of wine from different angles.

With the aim of offering a top quality, safe and sustainable wine tourism and food and wine offer, this summer we are inaugurating the “Freixenet gastronomic sunsets”. It is an outdoor experience to enjoy the best Mediterranean food paired with specially selected Freixenet wines and cavas. We already celebrated this event last year and it was a resounding success.