Cramele Recas maps out its biggest investment ever

If in the 90’s Recas region was fourth largest vineyard in Banat wine region, now, Cramele Recas is the only winemaker in the area with national coverage, which is ranked fifth in the local wine industry. For this year, the company plans its biggest ever investment. Ciprian Rosca, chief commercial officer Cramele Recas unveiled details about the project in an interview to Wall-Street.
“Small steps helped us get where we are now”, said Ciprian Rosca (photo). If ten years ago, the biggest portion of the production output was exported as bulk wine, investments in vineyards and wineries have led to the arrival of commercial brands, such as: Schwaben wein, Castle Rock, Frunza in the retail sector; Bag in Box 3L/10L, V Drinks in the HoReCa sector; and Cocosul, La Putere, Sole, Solo Quinta, Cuvee Uberland the premium lineup.

This year, Cramele Recas will make its biggest-ever investment. As of March until June, the winemaker will invest in the expansion and modernization of the winery, other €2 million for equipment, and €2.2 million for the reconversion of 130-ha vineyard (wine varieties such as Merlot, Black Maiden – Feteasca Neagra -, Cabernet Sauvignon, Sauvignon Blanc, etc).

In the first five months this year, the winemaker recorded a turnover of over €4.5 million, 2% higher than year-ago period. Cramele Recas (Recas Cellar) expect a turnover of €13.5 million in 2010, versus €13 million recorded last year.

The producer’s set of measures to improve efficiency includes the divestment of the regional cellar door (that served operations in half of the country) and the lease of space in a logistic center for flexibility and cost/sales unit optimization. It also decided to bring its adjacent services in-house and cut jobs.

Rosca says the market is set to take the heaviest losses this year, as psychologically, consumers will pull back on their spending and think twice before buying a bottle of wine, as household income cut and the risk of losing the job will weigh heavily on consumption.

“Ever since the financial crisis set in, we had to face a weakening of the buying power, the risk of a financial hamper on the producer-distributor-retailer-end consumer chain. In order to avoid such a risk, we are considering the implementation of an insurance system”, said Ciprian Rosca.

As for the measures the Government could put in place to stimulate businesses, Rosca mentions financial assistance from the authorities for the West-European producers, and for promoting Romanian wines both locally and globally.

“Wine consumption should be promoted over spirits that saw a sharp increase in the past three years, both in the retail and HoReCa sectors. The market should focus on matching food with wine, as well as on the beneficial effects of wine”, the chief executive of Cramele Recas said.

All eyes on USA and UK

Since 2007, Cramele Recas winemaker represents global producers in Romania such as Masi, Planeta, Piccini - Italy, Robert Mondavi - California, Thomas Hardy - Australia, Nobilo – New Zealand, Distell – South Africa, Cono Sur - Chile, Gonzales Byass - Spain.

For the time being, exports account for approximately 20% of the company’s turnover. The winemaker said it plans to boost exposure on US markets and UK, as well as in Russia, Baltic States, Nordic countries, Japan, and in other Asian countries.

Cramele Recas also plans to build a lodging unit in the area for tourists visiting its cellar, that would include amenities such as spa or pool. Last year, around 10,000 tourists visited the cellar, and 50% of them were Romanians. Tourists at Cramele Recas are also from Germany and Austria.

The local wine industry stood at €450 million last year, down 10% from 2008. The representatives of National Vine and Wine Association estimate the local market will reach its lowest point this year, the industry being estimated to drop further by 10% in 2010.

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