Martini & Rossi Spa Business Information, Profile, and History

History of Martini & Rossi Sp A

Martini & Rossi SpA has been producing its world-famous vermouth for nearly 150 years. The company also has been the world's top-selling vermouth brand for more than a century, and its name has become synonymous with the famed martini cocktail. Martini & Rossi produce four main varieties of its vermouth: Martini Rosso, its earliest vermouth recipe, which is available in "simple" and "quinquina" versions; Martini Bianco, a white, more aromatic vermouth; and Martini Extra Dry, a less sweet variation of the original recipe. Martini & Rossi vermouth is 75 percent wine blended with a botanical mix of herbs, spices, and fruits--including ginger, cinnamon, mint, raspberry, coriander, cardamom, but also lungwort, lungmoss, speedwell, and some 20 other ingredients--in a recipe kept secret by the company. Although production of the group's vermouth occurs in a number of subsidiary facilities around the world, the botanical mix itself is prepared at Martini & Rossi's main Turin, Italy-area facility. In addition to its vermouth, Martini & Rossi also produces its own sparkling wine, the best-selling Asti Spumante brand. Martini & Rossi has been part of the Bacardi-Martini drinks empire since 1992--the group, which includes labels such as Bacardi rum, Bombay Sapphire vodka, William Lawson whiskey, and others, ranks among the top five drinks groups in the world. Martini & Rossi's sales reach more than EUR 290 million ($320 million) per year. The company is headed by Managing Director Peter Heilbron and Chairman Luigi Combetto.

Making Drinks History in the 19th Century

While Italy had been a leading center for the creation of "aperitivo" beverages, including liqueurs and other alcoholic drinks since the 16th century, these drinks were used typically for medicinal purposes, and were often quite bitter to the taste. By the 18th century, fortified and blended wines became popular and acceptable as beverages themselves, and were often used to stimulate the appetite before meals, launching a European tradition. Drink makers now began developing more palatable blends and mixes, which led to the development of a number of regional specialties. Vermouth, a blend of wine with alcohol, sugar, herbs, spices, fruits, and other ingredients, became an increasingly popular aperitivo at the turn of the 19th century. A specialty of the Piedmont region, and especially Turin, vermouth became increasingly important to the regional economy in the early decades of the century. This importance was recognized in 1840, when then King Carlo Alberto called for the creation of a register of certified vermouth makers in the region surrounding Turin.

In 1840, four local wine producers--Clemente Michael, Carlo Re, Agnelli, and Baudino--joined together to form a new business, Distilleria National di Spirito di Vino, which was added to the King's list in 1847. The new company produced and sold wine, liqueurs, and vermouth and other alcoholic beverages. Growing quickly, the Distilleria National added a new distillery in San Salvatore Monferrato, and branch facilities in the towns of Genoa, Narbonne, and Cagliari.

In 1850, the company brought in three new partners. Alessandro Martini, a commercial agent, also had been operating his own small Turin-area vineyard, purchased from the Agnelli family (of later Fiat fame) in 1830. Joining the company with Martini were Teofilo Sola, who became the company's accountant, and Luigi Rossi, who came to play the primary role in the company's lasting success.

Rossi combined winemaking knowledge with a talent as an herbalist, and began developing his own vermouth recipe. The success of that recipe in the early 1850s put the company on the map, and Rossi was made one of the company's directors at the end of the decade. The death of Carlo Re in 1860, followed by Clemente Michael's retirement in 1863, placed Martini, Sola, and Rossi in charge of the company, which changed its name to Martini, Sola & Cia at that time.

The following year, the company moved its production and headquarters to the village of Pessione di Cheri, giving the company a link to the new railroad connecting Turin with the port in Genoa. This access to the shipping routes linking Italy to the rest of the world encouraged the company to attempt to bring its vermouth recipe to an international market.

Building a Global Brand in the 20th Century

The company's efforts met with immediate success. In 1865, for example, its vermouth won first medal at the Dublin Exhibition. Two years later, Rossi's vermouth recipe was honored with the prize at the prestigious Paris Exhibition. The year 1867 also marked the company's arrival in the United States, with a shipment of the first 100 cases of its vermouth. Other awards followed, in Vienna, Philadelphia, and again in Paris. At the same time, the vermouth became the favorite among European royalty. In 1868, King Victor Emmanuel II authorized the company to place the House of Savoy's arms on its label. This honor launched a trend, and by the beginning of the next century the vermouth label sported the royal crests of Portugal and Spain, as well as the crests of the British parliament and the cities of Melbourne, and Antwerp, among others.

Teofila Sola died in 1879, and his sons sold their share of the company to Martini and Rossi, leading to the company's permanent name, Martini & Rossi. By then, the company had added to its line, producing its own sparkling wine, originally called Vino Canelli Spumante, but later made world famous under the Asti Spumante brand name. Martini & Rossi vermouth was already one of Italy's top-selling vermouth brands, and the company had become the Piedmont region's largest wine and spirits company.

Martini & Rossi began expanding their international reach in the 1880s, adding a number of international sales branches. Among the first of these was an office in Buenos Aires in 1884. This office was followed by the opening of an office in Geneva in 1886, and in Barcelona in 1893.

By the dawn of the 20th century, Martini & Rossi had not only conquered Italy, but had become a bestseller in such far-flung markets as the United States, Brazil, Argentina, Greece, Portugal, Belgium, Switzerland, Turkey, and Egypt. By then, a new generation prepared to guide the company. Luigi Rossi's four sons, Teofilo, Cesare, Enrico, and Ernesto took over as leaders of the company; the Rossi family became the company's sole owners after Alessandro Martini's death in 1905.

Martini & Rossi now began building itself as one of the first truly global brand names of the 20th century. As part of this effort, the company became an early example of industrial globalization as well. In the opening decades of the century, the company decided to extend its production and distribution range by opening a series of foreign subsidiaries. Backed by their own capital, each subsidiary operated more or less autonomously, adapting their sales and distribution efforts to their local markets and consumer preferences. Meanwhile, the parent company retained control of production of the botanical mix at the heart of the popular drink. By the outbreak of World War II, the company's network of production subsidiaries stretched to Geneva, Barcelona, Buenos Aires, Brussels, Paris, Sao Paulo, London, Hamburg, Casablanca, Santiago, and The Hague. The company also opened branch offices in the United Kingdom and the United States.

Martini & Rossi also began expanding its brand range. The first addition to its vermouth line came in 1900, with the launch of Martini & Rossi Extra Dry, a move made to counter the increasing popularity of rival French "sec" vermouths. The company began offering two variations of its Martini Rosso, one with quinquina, the other without, dubbed "simple." In 1910, the company launched a fourth vermouth type, Martini Bianco, a "white" vermouth.

The brand's fame only grew with the invention of a new cocktail: the Martini. While some dispute exists about who actually invented the cocktail--one story even claims that the cocktail was named after a rifle--the mixture of gin and vermouth quickly caught on in the pre-Prohibition United States. The popularity of the cocktail had become so great that, in 1922 when the company trademarked the Martini name, it was nonetheless forced to label its brand as Martini & Rossi in the United States. Even so, Martini & Rossi's vermouth became synonymous with the martini. Overseas, vermouth drinkers tended to consume the beverage unmixed, as an aperitif. Yet, when U.S. bartenders, forced out of their jobs by Prohibition legislation, found new jobs behind the bars at Europe's great hotels, they introduced the martini to a highly receptive foreign market as well.

Martini & Rossi backed up its growing sales with a knack for advertising. The company's Art Deco advertisement quickly set a standard and came to represent an entire trend in graphic design in the 1920s and 1930s. The company also became an early sponsor of a wide range of events, from motor racing to opera.

Forming a Global Drinks Giant for the New Century

The company weathered the years of World War II, under the leadership of the next generation of the Rossi family, who took over in the 1930s. Rebuilding after the war, Martini & Rossi launched a new wave of advertising initiatives that repositioned the drink as a sophisticated, more youthful product--launching a trend that culminated in the adoption of the martini as the favorite drink of cinema hero James Bond in the 1960s.

At the same time, Martini & Rossi moved to reduce its reliance on its core vermouth and sparkling wine brands. The company now began a push to acquire scale through the acquisition of other brands. In the 1950s, the company bought up the William Lawson distillery and brand. In 1960, the company added Saint-Raphaël, a quinquina-based aperitif.

Other brands followed. In 1966, the company acquired its own port brand, Offley, then took over the famed French dry vermouth brand Noilly Prat. In 1988, the company bought up La Benedictine, a liqueur based on a recipe stemming from 1510. Three years later, Martini & Rossi acquired Otar cognac, one of the oldest and most exclusive cognac brands.

By then, Martini & Rossi had moved toward its modern corporate form. Amid growing competition on the international market, and faced particularly with the growth of a small number of giant beverage companies, Martini & Rossi abandoned its network of independently operating affiliates. Instead, the company moved to a centralized organizational model, absorbing its international subsidiaries, which were then regrouped under a newly created body, General Beverage Corporation, based in Geneva, in 1977.

At the beginning of the 1990s, however, the company's relatively small size left it at a distinct disadvantage in the market--now dominated by a handful of far larger, globally operating beverages conglomerates. Martini & Rossi had already developed a partnership with the Bacardi family, forming a distribution agreement in 1987 that gave Bacardi control of Martini & Rossi's distribution in the United States.

In 1992, the Rossi family, now in its fifth generation with the company, agreed to sell Martini & Rossi to the Bacardi family. The purchase, reportedly at a price of $1.4 billion, placed the newly created Bacardi-Martini group in the top ten among the world's alcoholic beverages groups.

While sales of Martini & Rossi's vermouth remained strong, the brand--particularly the cocktail--had lost much of its luster. Yet the late 1990s marked a resurgence in interest in the martini, and the company moved to capitalize on the new trend by revamping its advertising to promote a more youthful, yet sophisticated, image. At the same time, the company--in part to thwart imitations from competitors--redesigned its flagship product's bottle for the first time in more than a century, adopting a more distinctive shape. The company also began developing new packaging concepts for its sparkling wine brand as well, and in 2003 debuted a new single-serve Asti, complete with a straw. In the meantime, the rising demand for the company's vermouth helped push its sales near the EUR 300 million mark. One hundred fifty years after Luigi Rossi developed the original recipe, Martini & Rossi remained the world's leading vermouth brand.

Principal Competitors: Allied Domecq Netherlands BV; Diageo Plc; Seagram Company Ltd.; Fortune Brands, Inc.; Jim Beam Brands Worldwide Inc.; Brown Forman Corp.; Davide Campari Milano SpA.

Chronology

• Key Dates:
• 1840: Distilleria National di Spirito di Vino is registered as a producer of vermouth in the region of Turin, Italy.
• 1850: Alessandro Martini, Teofila Sola, and Luigi Rossi enter the company, where Rossi develops a new vermouth recipe.
• 1863: Martini, Sola, and Rossi take over leadership of the company, which is renamed Martini, Sola & Cia.
• 1865: The company begins exports, and wins its first international competition at the Dublin exhibition.
• 1879: Teofila Sola dies and Martini and Rossi acquire full control, changing the company's name to Martini & Rossi.
• 1884: First international branch opens in Buenos Aires.
• 1900: The company launches a new vermouth variant, Martini Extra Dry.
• 1910: The company launches Martini Bianco, a white vermouth.
• 1922: The company registers Martini as a trademark in Europe.
• 1950s:William Lawson distillery and brand is acquired as part of a portfolio expansion.
• 1960: Saint-Raphaël, a quinquina liqueur brand, is acquired.
• 1966: The company acquires the port wine brand Offley.
• 1971: French dry vermouth brand Noilly Prat is acquired.
• 1977: A new central company, General Beverage Corporation, based in Geneva, is created.
• 1988: The company acquires the La Benedictine liqueur brand.
• 1991: The company acquires the Otar cognac brand.
• 1992: The Bacardi family acquires Martini & Rossi for a reported $1.4 billion.
• 1997: Martini & Rossi vermouth is repackaged with a new bottle and label.
• 2003: A new single-serve packaging concept is launched for the Asti sparkling wine brand.