Louis Thomas speaks with Oltrepò Pavese's biggest producer about how this sparkling wine region in Lombardy can realise its true potential through "managerial competence".
Last week proved to be something of a game changer for this Lombard wine region.
The Consorzio Tutela Vini Oltrepò Pavese introduced major changes to how it operates and, most crucially, to the production and labelling of its sparkling wines.
Much like consorzio director Riccardo Binda, who swapped Bolgheri for his home turf, Casteggio-born Umberto Callegari also returned to the region, leaving a position as worldwide commercial leader of the strategic advisory for Microsoft for the role of chairman and CEO of Terre d'Oltrepò SpA 18 months ago.
"I decided I wanted to do something good for my homeland," he explained when speaking with
the drinks business in December. "We owe it to the land to do something different."
Created from the union of three cooperatives and responsible for around 50% of the region's wine production, with 660 member wineries over 5,000 hectares, Terre d'Oltrepò was initially formed in 2008 after the merger of Cantina di Casteggio and Cantina Sociale Intercomunale di Broni.
Problems of the past
For Callegari, the need to change how things operate is the result of what he sees as a prolonged period of mismanagement within the region's wine industry.
"When I was born in 1982, the area was the richest in Italy thanks to the winemaking opportunities. In 1989, La Versa was what Ferrari Trento is at the moment – making 34 billion lire, which was equivalent to around €350 million. A new Ferrari, Lamborghini or Porsche would come out, and two days later the area would be full of them, because people were extremely rich."
"But then something changed," he suggested. "People started playing around with bulk wine and bulk speculation, Oltrepò Pavese became the bulk warehouse of Italy, and that destroyed that wealth."
Terre d'Oltrepò actually acquired the La Versa brand in 2017.
Callegari highlighted the decline of Oltrepò Pavese by comparing it to the rather different fortunes of another Lombard wine region.
"30 years ago, Lugana did not exist, it was not on the map, tourism was not super developed. But there were great entrepreneurs, so the land price went from €20,000 per hectare to €300,000 today – the opposite happened in Oltrepò."
"Oltrepò had a past which was not the most ethical," noted Callegari. "While the wealth of many was destroyed, some got very rich. If you take a winemaker that has the whole value chain, from grape to bottle, they operate at 15-25% profit. If you take the bottlers, they operate at a 2% margin if they’re good. If our purpose is to increase the value per hectare, and therefore the quality of life for people here, we need to control the value chain, it needs to be completely transparent. 100% of what is processed needs to be what we say it is."
One of the recent scandals to have damaged the region's reputation was that of Cantina Sociale di Canneto Pavese, which was found to have created more than a million litres of wine adulterated with additives and prohibited grape varieties.
A number of arrests were made in connection with the wine fraud in January 2020.
Scaling up
"I look at it from a managerial and economical perspective," said Callegari. "The problem is in the operating model: selling bulk in a huge quantity with the tiniest margin. They are relying on Bonarda, a local sparkling red – if it was in France it might do well because they are able to promote something, but because it’s in Italy it went down the drain. It’s popular among older generations, but once they are gone there won’t be any room for Bonarda."
"The land is 13,000ha, and you have a huge possibility for scaling up – you can go from 0 to 1,500 metres above sea level. Everywhere else is in Italy is operating at maximum capacity, so this is a unique quality. There is a huge opportunity to grow a fresher style of still Pinot Noir, which is extremely pricey around the world. There is New Zealand, Oregon, Burgundy – where is Italy?"
It isn't just the still wines which Callegari believes have fallen behind – Pinot Noir-based metodo classico, newly-named as 'Classese', also needs to make up some ground to come close to competing with other European fizzes.
"Why did the metodo classico from here never make it abroad? Because there’s 200 million bottles of Cava, 180 million of Crémant, 280 million of Champagne, and there’s 30 million of metodo classico, so you miss the volume factor," he said. "If you imagine down the line, through a data-driven strategy, Oltrepò Pavese produces an extra 30 million bottles, you could price it at €7 instead of €12, which will help to position it in supermarkets, but it will be more expensive than Cava or Prosecco DOCG. Our industrial plan revolves around this: it’s not driven by our heritage or religion, it’s just pure management."
Callegari then offered a hypothetical example of how the region's abundance of small winemakers restricts "operational leverage": "If tomorrow the Marriott Hotel, for example, said they wanted 200,000 bottles for its hotels, most producers could not fulfil that order. I think we need a shared operating platform. The wine world tends to just see products, I see products and services for producers. For me, this land should focus on three things: Pinot Noir, traditional method sparkling, and the Italian answer to Provençal rosé, but made from Pinot Noir, Pinot Gris and Pinot Blanc. All at a competitive price, which doesn’t mean low."
Regarding pink-hued wines, Terre d'Oltrepò produces its Winged Victory Province of Pavia IGT Rosé.
Inviting investment
"58% of Italian wine is produced by cooperatives, there are roughly 498 wine cooperatives in Italy, and of that number only eight have revenues surpassing US$100 million, which means that the others are suffering – they need private investment, but they do not have the structure," Callegari explained. "What we did with Terre d’Oltrepò was create a holding company which operates to generate a profit because the cooperative can’t, and that is to attract private investment."
Although Colline e Oltre, a project created from a partnership of Italy's biggest bank Intesa San Paolo and regional bank Fondazione Banca del Monte di Lombardia, aided in two high profile estate acquisitions in 2023,
one involving Masi and the other the
Ziliani family, Callegari said that these investments were still "peanuts" and "short-term" focused, compared to the structural overhaul which he believes Oltrepò Pavese needs.
"I think it is missing the point, we want to create the biggest area for classic method and possibly rosé in Italy with a business model built on products and services," he argued. "We have an opportunity to attract investment, but it has to be within the system."
French lessons
When discussing examples which Oltrepò Pavese can emulate, Callegari did that rarest of things for an Italian and praised their neighbours on the other side of the Alps.
“A very traditional industry in a very traditional yet creative country like Italy can generate a good system. The main difference between Italian and French people is that the French are good at creating systems, I admire them for that. The only system we have been able to create is Prosecco, but how sustainable is that?”
For Callegari, clever marketing can only go so far in remedying the intrinsic problems.
"If you want to upset someone, just tell them the truth. If you tell yourself a beautiful lie, you will only end up choking on it," he said. "It’s not politics or storytelling, it’s managerial competence."
Callegari concluded with a warning about what will happen to Oltrepò Pavese if it doesn't evolve: "We have been going down the drain for 40 years, and now the economy and extreme weather conditions have pushed the system to a point of no return. Either you change things, or perish."
