October-2023: Purcari Wineries Group

October-2023: Purcari Wineries Group

This month I would propose you to travel to Moldova first, then Romania and Bulgaria, as our chosen entity is Purcari Wineries Group, "a leading player in the wine and brandy segments in the Central and Eastern Europe (CEE) region". Now, it is the time to understand how and why Purcari appeared on the wine map and where it comes from...
Early times
"Purcari" name comes from a village in southeastern part of Moldova, close to Dniester river and not far from Black Sea shore.

The genesis of Moldova's wine industry was back in the 12th century, having as the roots the Purcari village, its specific terroir, and the Agon Zograf Monastery vineyards here. The next milestone was achieved in 18th century, when French colonists went into an agreement with monastery in cultivating the vineyards and wine-making, recognizing similarities in the soil and climate with the Bordeaux region (France).

In 1827, Russian Tsar Nicolay I (Nicholas I) has issued a Special Decree, giving Purcari the status of first winery in Bessarabia managed by two colonists from France and Germany, as it was called Moldova during Russian reign. This was the beginning of a business, which would bring in few decades a local recognition and first gold medal for the Moldovan winery in 1847. In 1878, the Purcari wine became notorious at the International Exhibition in Paris, when the winery received the first international gold award for Negru de Purcari wine, a dry red wine with an intense ruby color "characterized by a complex and intense bouquet". The French sommeliers have confused the Moldovan wine with the French Bordeaux, but this was the beginning, as long time confusion persisted between the "connaisseurs", being as popular as Bordeaux or Burgundy wines. The fame of Purcari wines went internationally, they were delivered from the small Moldovan village close to Dniester banks to the European royal families, such as Tsar Nicolay II (Russia) and King George V and Queen Victoria of Great Britain.

Soviet time
"Emerging from war, a new era in Purcari’s history started in 1950, when the Moldovan winemakers restored the classic production techniques of the famous wines. One of the greatest professionals of that time – Pimen Cupcea, reconstructed the legendary Negru de Purcari, while Ion Ungureanu created a new masterpiece – Purpuriu de Purcari".

After 1990s, with the collapse of Soviet Union, and early years of Moldova's independence, the winery, together with its brand, moves into a shadow and resilience to survive difficult post-soviet times. It was needed a vision and strong character of a dedicated person to revive the Purcari brand in early 2000s, and his name was Victor Bostan...

Consolidation and expansion
With Victor Bostan a new period started since when Purcari name was used more and more as a premium and high-quality wine, innovative brand and growing business. Few words about Victor Bostan, though. Born in Soviet Moldova, oenologist with 10+ years experience in wine business at the time of Soviet Union collapse, he got an expertise in local wine association and in running a winery in Moldova ("real wine business") and then in Russia (Kuban Vino). In 2002, he decided to divest the Russian entity and, with ~ USD 10mn in the pocket, got back to Moldova.

In an interview to Wall-Street.ro, Victor Bostan mentioned that he "first purchased Etulia, then Onesti [both Bostavan now], then Purcari, then Ceptura and starting from 2002-2003 I did their renovation and reconstruction. In the same way, all these wineries were in total decline, in a disastrous state, but very quickly we relaunched them one after the other: in 2003 Etulia Bostavan, in 2004 Purcari and Ceptura." In 2006, the Bardar was added to the portfolio, a brandy asset. Following 2006 and 2012 Russian embargo and financial crisis in 2008, the company decided to change its strategical focus and sales from CIS region towards Europe and overseas, cementing the way for further developments. The next company's events, like IPO in 2018 ( Bucharest Stock Exchange / Bursa de Valori Bucuresti (BVB)), acquisition of new production platform in Moldova (2019), first footprint in online sales via 10% share in 8Wines platform (2021), and, the most recent one, purchasing of 76% shares of Bulgarian Angel's Estate (2022), came somehow logic, considering its vision to "become the indisputable wine champion in CEE [Central and Eastern Europe], acting as a consolidator of a fragmented industry".

An excited and terrible history with ups and downs, but what is Purcari Wineries Group now?
The main strategy is to focus on premium wine segment, "with a particular emphasis on the flagship Purcari brand", a corporate umbrella consisting of.

  • Six wine and brandy production platforms ( Purcari Winery, Crama Ceptura, Bostavan Winery, Domeniile Cuza Winery, Angel's Estate and Bardar)
  • Around 1500 hectares of vineyards, with local and international grape varieties
  • Bottling capacity of around 26 million bottles per year (Moldova 80%, Romania 16% and Bulgaria 4%)
  • Geographical breakdown of sales in 2022: Romania (53%), Moldova (21%), Poland (7%), Czechia + Slovakia (3%), Asia (3%), Ukraine (2%), Bulgaria (1%), Rest of the World (10%)
  • World’s most awarded winery in 2021
  • Most awarded CEE winery of the year in 2015-2022 at Decanter London, "Wine Olympics"
  • #1 Premium Wine brand in Romania, Moldova
  • #1 Fastest growing large winery in Romania
  • #1 Largest exporter of wine from Moldova

In 2023, Purcari continued to collect medals and awards at the international wine competitions:

  1. MUNDUS VINI: Best Producer from Moldova 2023 (As well as 24 distinctions granted by Mundus Vini Spring Tasting)
  2. Concours Mondial de Bruxelles (CMB): Gold - Rosé Selection
  3. Berliner Wine Trophy: 10 Gold Medals Collected
  4. Challenge International du Vin: 17 Gold Medals
  5. Concours International de Lyon - World's Best Products Competition: Best Wine from Moldova (7 Gold Medals)
  6. Wine Vernissage: Grand Prize within the category “Vernissage in Rosé”

And this is only the first half of the 2023 year...

The Group has always focused on quality and, as such, invested significantly in best grapes, production technics and expertise. As one example, Federico Giotto has been the Head Wine Making of the Group since 2010, on a consulting basis. He has over 16 years of wine consulting experience and is a laureate of numerous international awards in the wine industry.
Actually, Purcari Wineries Group offers a wide range of wines, covering the full spectrum of wine segments:

  • Purcari: Flagship premium brand
  • Angel's Estate: Premium brand
  • Crama Ceptura: Medium to premium wine
  • Domeniile Cuza: Medium to premium wine
  • Bostavan: Economy plus to popular premium wine
  • Bardar: Medium to premium brandy

Besides wine portfolio, company expansion and development, the Group is highly involved in sustainability (solar power, recycling, carbon dioxide capture and storage, etc.) and social programs (local commitments, support for Ukrainian refugees, etc.), being a model for the local and regional businesses not only in wine industry.

Instead of a conclusion
Recently, the company announced a big change at top management level: appointment of Alex Filip as a Deputy General Manager as of January 2024, and as of January 2025, he will succeed to Victor Bostan as a CEO of Purcari Wineries Group. "Alex is originally from Romania and currently holds the role of Managing Partner at the Bucharest office of McKinsey & Company, being also the leader of the firm's digital and analytical expertise group in Central Europe" (Financial Intelligence). The expectations are high from shareholders and current management, as Victor Bostan said: "His bold vision, strategic clarity as well as his mature approach won us all over during the recruitment process for this role", and Vasile Tofan, Chairman of the Board of Directors of Purcari Wineries Group, added that he is looking forward to his expertise and contribution to bring the Company to a new level.
With a new business head starting next year and whole transition process in 2024, it would be interesting to follow the #1 Winery in Central and Eastern Europe, which direction it will take and what would be the development focus.
It is known the Group's strategic plan to increase production capacities at existing plants, aiming to increase the processing, storage and bottling capacities at Purcari, Bostavan and Crama Ceptura wineries, reaching the milestone of "circa 27 million bottles in terms of grapes processing, circa 30 million bottles in terms of storage and circa 39 million bottles in terms of bottling".
Considering the Purcari's high appetite for inorganic growth, it will not come as a surprise, that the company would be interested in purchasing an "undervalued" asset along 45 grade parallel in Europe, from Bordeaux in France to Piedmont in Italy, or in the CEE region (Romania, Serbia or Croatia). Or an M&A in Central Europe (Hungary, Austria, Slovakia) and/or in the southern part of the "New Frontier" wine world in Europe (North Macedonia, Greece, Turkey and Georgia) where the Group is trying to get market share since a while...
How Purcari Wineries Group will evolve in the next decade it is difficult to predict, but it seems that the holding has done its "homework": strong production base and great brand names, prudential and healthy financials, strategic-thinking and future-oriented, being part of trends and/or creating them, innovative, and as its business model says - an "Affordable Luxury!"

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