“2014 is not a bad year, but it cannot be compared with 2013, which has been the best year since we are in this business. I expect it to be a very good year for quality, but not for quantity. The problem this year is that we have much higher expenses compared to production,” said Dan Balaban.
For instance, against a 30% lower production, expenses were 25% higher. Nonetheless, Balaban believes 2014 will be a profitable year.
Dan Balaban and oenologist Bogdan Costachescu are the stakeholders of Davino, a winemaker that owns over 70 hectares of vineyard has another 16 hectares leased. With revenue of over EUR2.5 million last year, it is a medium-sized player on the wine market.
Dan Balaban says the best period for the company started in 2009. During this time, many investors have focused on placements in collection wines, multiplying their value several times in a few years. Balaban estimates Davino wines will be tripling their value in 10 years.
In Romania, vineyards suffered this year because of the unfavorable weather conditions and grape output is expected to be 25% lower than in 2012.
While in the area of production things are not very good, from the area of sales there are upbeat signals coming. In the first half of this year, Davino posted 30% higher sales on the local market, above initial estimates.
The results were based on the increase posted by three brands, Davino (on the high-end segment), which continued rising at a 10% pace, Faurar (entry-level) with around 40%, and Iacob (premium), which came to replace Ceptura brand, and which posted growth of around 35%.
The company also expanded its sales and distribution activity countrywide and adjusted prices to inflation.
However, Balaban showed the strong growth tendency did not maintain in the third quarter, sliding to 10% in July-September locally.
In this context, at the level of the entire 2014, Davino is likely to see sales in Romania advance by 18-20%. Exports are set to rise by 10% this year.
(English version by Catalina Apostoiu)