Borgoluce: the strategic choices of a prosecco producer

Generating sufficient resources to cover the high cost of maintenance for the farm and several historic buildings on the property thanks to higher margins from the sale of agricultural products (primarily grapes, cereals, feed, fruit and vegetables, cattle, sheep and pigs), and new complementary and collateral business ventures, to include clean energy production. This is the enormous challenge facing the Collalto family, the owners of Borgoluce. The 1,200 hectare farm in Susegana, in the Treviso province of northeastern Italy, boasts a thousand-year history of agricultural production, as well as preservation of the land and the landscape.

In 2009 the Collalto family decided to inject new life into their company by enhancing the long-term corporate strategy with a fresh vision, and returning the farm to its ancient multifunctional approach. Borgoluce values were the primary drivers along this path, which represented the only way to activate economies of scope, new revenue streams, tourism opportunities and commercial prospects.

Prosecco is all the rage on national and international markets. This represents a tremendous opportunity for the vineyards in the Veneto of northeastern Italy – prosecco country - both for product sales and additional revenues generated by wine tourism.

This market success has driven up the price of grapes, prompting wineries in the area to intensify production. The Collalto family followed suit, immediately opting to invest in a new 90-hectare vineyard to escalate grape production to nearly 1,120 tons, increasing production of Glera tenfold. Glera is the grape variety that all prosecco is made from, and with 100 kg topping €150, the price is far higher than many other grape varieties.

As costly as this investment was, the new vineyard optimized the company’s work force and competencies. What’s more, the move made it possible to grow the margins of the agricultural activities and shore up the multifunctionality and circularity at Borgoluce. This first step in the long-term plan led the company to reassess and reintroduce other productions in the B2C market: flours, meats, cured meats and dairy products. One example of this last item is the high-end bufala mozzarella, now sold in the on-site store which offers home delivery for the local Treviso Province. Exceptional returns on investments convinced the family to continue on this growth path, embarking on new businesses, and balancing diversification with multifunctionality while adopting a long-term approach.

By increasing the volume and quality of grapes, Borgoluce seized the opportunity to create its own brand of wines – leveraging its location in the terrior of Valdobbiadene (an area famous for prosecco). Moreover, the company invested in an on-site wine cellar, which would not only serve to process grapes but also as a distinctive space for experiential tourism, taking wine tasting to a whole new level. The estate is also home to a large number of historic buildings that are underutilized. So the Collalto family decided to more fully exploit these assets, remodeling one of the buildings for use as a holiday farm complete with restaurant and rooms to rent. The new structure combines modern lines with the original style of traditional Borgoluce buildings, blending in perfectly with the surrounding environment. Targeted investments in marketing, communication, and above all specialized competencies have enhanced the appeal of the Borgoluce estate, boosting tourism.

The Collalto family also decided to focus on the advantages deriving from the production and sale of energy, with a self-sustaining biogas plant fueled with feedstock supplied directly by the farm. Over time, this asset has proven remunerative and invaluable for the circularity of the company.

Today Borgoluce is facing a new challenge: to minimize the carbon footprint by gradually introducing sustainable, biodynamic practices.

• The new global challenges of agriculture and agribusiness bring up interesting conversations about environmental and economic sustainability, tying into reflections on the benefits of the circular economy, which are more and more evident in a wide range of economic sectors.
• The concept of multifunctionality provides a framework for comprehensive analysis of the agricultural business from a variety of perspectives: long-term strategic fit, operational choices, investment assessments and risk management, and the introduction of new business lines. In addition, from this multifunctional perspective, integrating tourism and farming is a step forward toward creating value in services relating to culture, food and wine, enhancing the appeal of the territory as a whole.