The Freixenet Group and Henkell Freixenet consolidate their world leadership with a turnover of 1.29 billion euros and a market share of 9.7%

• The alliance between the Freixenet Group and Henkell Freixenet has proved a success, with both companies consolidated as the world’s leading sparkling wine group.
• Due to the resurgence of sales within the international market after the lockdown, the Freixenet Group has postponed the temporary layoffs (ERTE, Expediente de Regulación Temporal de Empleo) that were affecting the workforces of the Segura Viudas and Freixenet businesses.

Freixenet Group consolidates its leadership in the cava sector. The wine company recorded organic growth of 4.6% in 2019. These results are also reflected in the turnover of Henkell Freixenet and the Freixenet Group, which last year increased their turnover by 25% to 1.29 billion euros.

Meanwhile, in that same year, the Freixenet Group and Henkell Freixenet successfully finalised their international alliance, allowing them to become the world leader in the sparkling wine sector with a market share of 9.7%. This is a goal that both companies set for 2025, and one which was almost achieved during the tax year 2019.

In terms of sales, the Freixenet brand – which includes cava, Prosecco and still wines – sold 94.4 million bottles last year, down by 1.4% from 2018 due to increased prices in the US. Nonetheless, Freixenet Group still leads the cava sector in 104 countries, according to IWSR Drinks Market Analysis. The company currently exports more than 80% of its sales, which are mainly concentrated in Germany, the UK and the US as these are the Group’s main markets. In the case of the British market, Freixenet Prosecco and Italian Rosé have achieved double-digit growth.

In the words of Pere Ferrer, Vice President and Managing Director of the Freixenet Group: “Following on from the finalisation of the alliance between both companies in 2019, we continue to work as planned to align our strategy with Henkell Freixenet.” Andreas Brokemper, CEO of Henkell Freixenet and the Freixenet Group, believes that “we have succeeded in realigning management strategically and organisationally, while gaining presence in many markets.”

The coronavirus pandemic

The COVID-19 crisis has had a very strong impact on all sectors and the wine sector has been no exception. With the outbreak of the pandemic, the company’s outlook has changed. According to the IWRS, global demand for sparkling wine will fall by 15% by 2020, with Spain and France being two of the countries most affected.

“In an ever-changing, uncertain environment, making a prediction for the entire year is impossible. We are analysing the evolution of the market on a weekly basis. The truth is that business development depends largely on the course of the pandemic, as well as the economic and financial consequences it has on the markets. That’s why we’re looking forward to the reopening of the restaurant sector and the Horeca industry and expect a significant impact on sales,” explains Pere Ferrer, CEO of the Freixenet Group.

However, the resurgence of exports to pre-COVID-19 levels in the US, Japan and France has allowed the Freixenet Group to postpone the temporary layoffs (known in Spanish by the acronym ERTE) in two of its companies due to the reduction in working hours that it enacted at the beginning of June. As such, the staff of Segura Viudas and Freixenet will for the time being remain unaffected by the measure, known as ETOP, which involves the reduction of working hours due to economic, technical, organisational and production factors directly related to COVID-19.

Organisational structure

The Freixenet Group has created the Freixenet Spain Executive Committee to manage responsibility for the domestic business within the Spanish market. This committee comprises Joaquin Costa, Sales and Marketing Manager; Josep Palau, Supply Chain Manager; and Thomas Scholl, Chief Financial Officer (CFO) of the Freixenet Group. This body will in turn report to the Managing Board of the Freixenet Group, which includes the company CEO Pedro Ferrer as well as a Chief Sales Officer (CSO), a Chief Technical Officer (CTO), Chief Marketing Officer (CMO) Martina Obregón and Thomas Scholl, CFO.

With regard to the organisational structure of the Freixenet Group, Joaquin Costa will be the new Sales and Marketing Manager for Spain as of July 1st. The manager started his career at the Freixenet Group in 2015 as the Off-Trade Sales Director, and in 2018 he moved to France where he was Co-General Manager of Freixenet Gratien.

The market leader in Spain

Last year, Freixenet consolidated its position as the leading sparkling wine brand within the Spanish market. Freixenet’s iconic Carta Nevada cava was the leader in the sparkling wine category in terms of volume, and innovative products such as Freixenet ICE, Freixenet Prosecco and Freixenet 0.0° Alcohol Free were also leaders in their respective segments.

According to the latest data from the consultancy firm IRI, the value sales of the Freixenet brand in 2019 occupied 15.6% of the Spanish market, the Freixenet ICE range occupied a value share of 40.7% and a volume share of 47.7%, leading the ICE segment (the manufacturer’s brand); and Freixenet Prosecco was first in the Prosecco ranking (the manufacturer’s brand) two years after its launch.

The Australian market

In addition to the consolidation of the strategic alliance, 2019 was marked by several divestments in both companies. Among them, Freixenet Group agreed the sale of the champagne company Henri Abelé, located in Reims (France). This strategy remains in place this year. To that end, the Freixenet Group has also reorganised its business in Australia. The Wingara Group, a subsidiary of Henkell Freixenet in Australia, has recently agreed the sale of the Deakin Estate to the Duxton Vineyards Group. The corporate operation is limited solely to the Deakin Estate winery and vineyards, while the brands remain under the ownership and management of the Wingara Group.

From now on, Wingara Group will focus on managing the Katnook Estate, a winery located in Coonawarra, and its portfolio of Victorian wines, including Deakin Estate, Azahara and La La Land, which are distributed in Australia and exported to over 50 markets.