PPT Slide
A Clear, Consistent Vision of Excellence
Notes:
- In closing, I want to cite one final, but very important, reason why all of us at Robert Mondavi remain confident about our long-term prospects, and that’s the company’s ingrained culture of excellence. Our founder has deep roots in Italy and an Old World sensibility. Where most Americans think 50 years ago is ancient history, Robert Mondavi has always thought in terms of centuries and generations of family.
- So when he founded the company, he wasn’t thinking about short-term success, but something that would last. He believed he could make enduring world-class wine and an enduring world-class company by striving for extraordinary quality in every aspect of the business. He was proven right, and that attitude is what our brand and every wine we produce represents.
- That quality image is a powerful asset, and while it is less leverageable in the current price-driven environment, we believe it remains a key advantage over the long term. That is why we intend to maintain or expand our investment in our core brands with sustained marketing that builds strong brand equity and consumer loyalty.
- Remember, demand for premium wine has continued to grow steadily for the last two decades. The excess supply of low-priced grapes can’t continue indefinitely, and brand strength will again be a key driver of pricing and margins. We’ve been around long enough to know this. We built our brands over the past four decades to reflect it. We aren’t going to abandon that strategy because of a difficult few years.
- At the same time, though, we know our quality image is not enough these days. It’s still important, but not always the decisive factor between market success and failure. That’s why we will continue in the near-term to make the trade investment necessary to maintain the strong market position of our brands.
- While our initiatives to drive sales and cut our cost structure have been successful, this increased investment is likely to have some negative impact on our financial performance in the near term … but it will also, we believe, produce a very positive impact on our market position, margins, and overall performance over the longer term.
- Again, we hope the next time you are passing through San Francisco or near the Napa Valley you will come visit us and see firsthand how this attitude is at work throughout the company.
- Thanks for your interest this morning. I’d be happy to answer your questions now.