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Business Model – Agrifood – Wine – Consorzio Sol.Co-Sicily – Italy

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Business Model – Agrifood – Wine – Consorzio Sol.Co-Sicily – Italy

June 19th, 2019|Activities|

WP-T2
Defining the business model and training program
D-T2.2.2 – Business Model

Title
Agrifood – Wine
Italy | Sicily – SOL. CO.

INDEX
1 INTRODUCTION …………………………………………………………………………………………. 3
2 CONTENTS……………………………………………………………………………………………… 4
3 THE BUSINESS IDEA ……………………………………………………………………………………. 5
4 CANVAS………………………………………………………………………………………………. 5
4.1 Canvas………………………………………………………………………………………………….. 7
4.2 Notes to the canvas ……………………………………………………………………………………. 8
5 LEGISLATIVE REFERENCES FOR THE ESTABLISHMENT …………………………………. 10
6 LEGISLATIVE REFERENCES FOR PERSONNEL HIRING……………………………………. 11
7 ORGANISATION …………………………………………………………………………………… 12
7.1 Roles ………………………………………………………………………………………………….. 12
7.2 Functions ……………………………………………………………………………………………… 13

1 INTRODUCTION
BEGIN is a project to define models for creation and management of social start-ups finalized to the inclusion of
disadvantaged people.
Marginalized groups – e.g. unemployed, women, young people, immigrants, disabled, ex-convicts, former drug
addicts – are counting significant percentage in every partner country.
Innovative feature and main objective of Begin is the creation of tools to encourage the creation and development
of social start-ups active in safeguarding of environmental protection for social work inclusion and employment of
disadvantaged people, which then contribute to improvement of territories both for use citizens and tourists.
BEGIN will transfer know-how from more innovative and experienced regions to those lagging behind creating an
innovative model that can be transferred also to other regions not involved in the project. Main common challenge
tackled regards environmental protection, also to promote tourism development. This challenge is faced through
joint analyse of territorial frameworks to identify work activities at the base of social start-ups models and
business models that are involving specifically marginalized groups. Non-profit and third sector organisations are
an efficient tool for environmental protection, but are not very developed and structured in project countries,
except for Italy. Hence, the project will capitalise results of research conducted in Italy by providing specific knowhow.

Direct project beneficiaries of milestones, outputs and deliverables will be the FACILITATORS OF SOCIAL
START-UPS. Indirect beneficiaries will be potential social start-uppers, people with disadvantage employment,
employees of social start-ups, research and innovation centres, training centres and employment agencies, as
well as legal and relevant public authorities in every country.
They also will lay the foundation for the creation of an INTERNATIONAL FACILITATORS NETWORK. This
represent the main project output together with a TRANSNATIONAL STRATEGY FOR SUPPORTING SOCIAL
START-UPS which will be built on the 10 local-regional strategies which will be realised in project regions.
Besides main outputs, BEGIN expects additional project milestones being the elaboration of BUSINESS
MODELS for the Management and Creation of SOCIAL START-UPS as well as LEARNING PROCESSES for the
dissemination of business models.

This document contains the business model for the creation of new social startups

This document, at the end of the project, will be available for other subjects interested facilitate the creation of
social startups.

2 CONTENTS

a) The business idea = a general summary
In this section it is described the business idea. What activities for which market.

b) Canvas = blocks from 1 to 9 for each of main customer segments
In this section it is explained the Business Model Canvas of the business idea. Potential startuppers and
facilitators will have a schematic overview of the business model.
Please, read this section following this order
1 = customer segment
2 = value proposition
3 = channel
4 = customer relationships
5 = Revenue streams
6 = Key activities
7= Key resources
8 = Key partners
9 = Cost structure
This section is replicate for each customer segment identified for the business idea

c) Legislative references for the establishment of the startup
In this section it is described how to establish the new social enterprise.

d) Legislative references for personnel hiring
In this section it is described what kind of contract it is possible to use for human resource management

e) Organisation (roles, functions, able-bodied and disadvantaged people skills)
In this section it is explained the human resources needs to manage the new social enterprise

3 THE BUSINESS IDEA

The idea is to create a social start up for the marketing of natural wine. Natural wines are characterized by a
limited content of chemical additives; this is why they fit into the macro trend of sustainable consumption. The
social start-up will be managed through the job inclusion of disadvantaged people.

HOW MANY ADDITIVES THERE COULD BE IN A BOTTLE OF WINE?

The start up would not be limited to commercialization but would lead to studies for the creation of new products,
which would then make wine from third parties after choosing the grapes considered most suitable to meet the
tastes of consumers.

The customer is the consumer eager to experiment new wine products that contain significant elements
of history, ethics and quality.

With regard to the customer, in the following pages are defined:
Needs and expectations
1. Value proposition
2. Customer relationship
3. Channels
4. Revenue Streams
5. Key activities
6. Key resources
7. Key partners
8. Cost structure

The various elements of the business model are organized according to the BMC (business model canvas)
methodology. On the sidelines of the Canvass are reported the legal and organizational aspects of the social
start-up.

CANVAS
The start-up is aimed at the final consumer, lover of quality wine, with innovative traits, who can tell a story of
innovation and experimentation and is combined with ethical principles
The offer will include a wide variety of labels, all wines made “natural”, studied and produced with ethical,
sustainable and social inclusion principles.
The marketing will take place through an online channel, either direct (with web platform) or indirect (through
marketplace). Direct sales are also planned in physical locations, such as niche fairs, tasting events.
The relationship with the client will be centered on the creation of consumer panels able to orient the production
in a logic of co-design.
The key activities of the start up will consist in the purchase of grapes of different origins, in the conception of
wines, in the vinification of bottling and labeling through third parties (partner wineries able to comply with supply
specifications), in communication and marketing
The key resources will coincide with human resources, in particular a winemaker responsible for production, a
commercial. Another key resource will be the management software of production and marketing, which will be at
the base of the web platform.
The main partners are: agricultural producers, winemakers, wineries, marketplaces (es Vinix)
The ratio of revenues to costs, even if it shows a not high margin, allows high scalability indexes (high increases
in customers that do not require new investments).
Naturally, positioning will be value driven, where the value of the company will be given by the quality of the
product, by environmental sustainability and by the social inclusion policies of disadvantaged workers.
It is suggested to read the canvas following the numbering of the 9 blocks.

3.1 Canvas
(1) Customer segment – Quality wine consumers

(2) Value proposition – Quality wines, natural, innovative, with strong symbolic, ethical and social elements.

(3) Channels:
– Web portal (direct)
– Online marketplace
– Tasting events
– Niche exhibitions

(4) Customer relationships:
– Web platform
– Social network
– Panel test for co-design

(5) Revenue streams – Fixed pricing: price list and product feature dependent. Valore della produzione pari a circa € 765.000

(6) Key activities:
– Ideation of wines
– Purchase of grapes
– Outsourced production
– Control and certifications
– Marketing
– Communication and promotion
– Pre-sales and after-sales

(7) Key resourses:
– Winemaker (Human)
– Commercial (Human)
– Contact center (Human)
– Disciplinary (intellectual)
– Software (Intellectual)
– Web platform (Intellectual)

(8) Key partner:
– Oenologists (R & D partner)
– Farms (Production partner)
– Cellars winemaking companies
– (Production partner)
– Software company (commercial
partner)

(9) Cost structure – An incidence of 58-60% is estimated for the costs of raw materials and for production, packaging and shipping costs. Adding personnel costs, consultancy, commercial and communication costs, structural costs (office, means, etc.) the incidence of costs reaches 95%.

3.2 Notes to the canvas

The notes refer to the numbering of the blocks:

1. Customer segment
Expectations are centered on quality, symbolic value, variety and innovation
The concerns refer to failure to respect delivery times

2. Value proposition
The value proposition is therefore played on elements of novelty (new products, niche, to be shown), design
(evocative labels) and status (the value of the brand, which recalls the concepts of innovation, but at the same
time history and ethical value -social). You can make deliveries in a short time, thanks to the partnerships with
the production, which will establish a direct line between warehouses and places of delivery.

3. Channel
Customers can order wines through the start-up web platform. Furthermore, marketing is also foreseen
through specialized wine marketplaces.
Finally, purchases can take place during events dedicated to food and wine tasting and small fairs for wine
lovers.
Deliveries will be managed directly by the production partners, thanks to the start-up management software.

4. Customer relationships
Through the web platform and social networks customers will be constantly updated on new productions,
offers, promotions and promotional appointments.
Furthermore, for the creation of wines the start-up will form panel tests; customers can join test groups that
will be invited to taste and to express their evaluation on new products.

5. Revenue streams
The products will have a starting price, different in terms of type and characteristics of the wines. Starting from
these lists, promotions will be defined differentiated by customer loyalty level and by sales channel (for
example, the use of marketplaces will impose the use of discounts and promotions). An average price of € 8.5
per bottle is assumed for 90,000 bottles of 0.75 cl per year (volumes correspond to an average consumption
of 20 bottles per year by 4,500 customers).

6. Key activities
The wines will be designed starting from the different Italian grapes, looking for innovative solutions to obtain
high quality natural wines. The design process will end with the definition of a production disciplinary and with
the definition of labels (brand and graphics).
The grapes will be bought on farms and sent to production partners (wineries) for vinification, bottling and
labeling (so production will be outsourced); the production partners will also take care of the logistics
(warehouse and delivery to the customer on the basis of what is required by the start up through the
management software and the web platform). During the production phases, the social start-up will follow the
processes, checking the results and compliance with the production specifications.
The central activity of the start up, in addition to the ideation, will therefore be that of communication and
promotion to develop sales; it is about treating relationships with trend setters (bloggers, journalists, chefs,
etc.), developing campaigns on social media, organizing and participating in tasting events, participating in
small fairs.
Naturally, the ideation must be managed with a high involvement of the customers (in particular those with
greater fidelity), above all in the testing phase. As well as the after-sales, it must be followed accurately, to
complete the customer’s shopping experience.

7. Key resources
Among the human resources, the roles of the oenologist and responsible for production (for the creation of
wines and for the coordination of production), the commercial (for the management of sales, communication
and promotion) and the staff of the contact center (for the management of the web platform, social media,
reports and telephone contacts, for the use of management software).
The contact center, the operative heart of the start up, will be managed with the employment of personnel with
a working disadvantage; in particular it will be possible to employ people with physical disabilities who can
work on the phone and the computer.
The other key resources are of an intellectual nature: wine production regulations, management software (for
the organization and monitoring of production, logistics, sales and administration) and the web platform (both
for the front end with the consumer, who for the interface in the reserved area with the partners).

8. Key partners
The ideation will be realized also thanks to the involvement of a staff of external enologists, coordinated by
the internal enologist at the start up. External winemakers can be contracted according to the research and
development objectives.
Other key partners are the productive ones, in particular the farms where to buy the grapes and the wineries
to which the winemaking, the bottling and the labeling, the packaging, the warehouse logistics and the
distribution. The value of the start up will be precisely that of articulating a wide network of productive
partnerships, differently specialized in natural wines. Each winery will be able to take care of one or two
specific labels on behalf of the start up; this will be a barrier to unfair behavior on the part of the partners.

9. Cost structure
Production costs are those with greater incidence. Each bottle has a cost of € 1.5 for grapes, € 2 for
vinification, bottling, labeling, € 1 for packaging and shipping. Total production and distribution costs of € 4.5
per bottle. Considering a production of 100,000 bottles a year to meet a demand of 90,000, production costs
will be around 450,000 euros.
To these are added personnel costs, for around € 186,000 a year.
The costs of external consultants: winemakers, software companies, for € 25,000 a year.
The commercial and communication costs, for € 40,000 a year.
The structural costs (offices, vehicles, overheads, travel and transfers, etc.), equal to about € 24,000 per year.

4 LEGISLATIVE REFERENCES FOR THE ESTABLISHMENT
Legal nature:
The possible legal forms for the start up are:
Type B social cooperative (for job inclusion)
Company limited managers (SRL) social enterprise
Of the two, the first is certainly the most suitable to work with disadvantaged workers.

Reference laws:
The normative references for the Type B Social Cooperatives, in Italy are:
Law 381/2001
Type B social cooperatives can carry out various activities using the work experience of
disadvantaged people in order to integrate them into the world of work. The concept of a
disadvantaged person is regulated by article 4 L. 381/1991. According to this provision the
subjects that fall into this category are:
disabled, physical, psychic or sensory subjects with a reduction in work capacity of more
than 45%;
• former patients of psychiatric hospitals;
• subjects undergoing psychiatric treatment;
• drug addicts;
• alcoholics;
• minors of working age in situations of family difficulty;
• convicted persons admitted to alternative measures to detention;
• subjects identified with a specific decree by the president of the council of ministers.
Disadvantaged people must constitute at least 30% of the workers of the cooperative
Another standard relevant to the business model is the provision of public tenders.
Procurement Code (Legislative Decree No. 50/2016)

Link to the laws Law 381/2001
https://it.wikisource.org/wiki/L._8_novembre_1991,_n._381_-
_Disciplina_delle_cooperative_sociali
Procurement Code (Decreto Legislativo n. 50/2016)
http://www.gazzettaufficiale.it/atto/serie_generale/caricaDettaglioAtto/originario?atto.dataPu
bblicazioneGazzetta=2016-04-19&atto.codiceRedazionale=16G00062

5 LEGISLATIVE REFERENCES FOR PERSONNEL HIRING

Types of contract:
Job placement
Assumption of fixed time
Assumption of undetermined time

Conditions:
Monthly average salaries
According to the National Collective Labor Contract 2017 for social cooperatives, in Italy
monthly salaries range from € 1,184.20 to € 2,180.72
Monthly value of seniority step
Average monthly increases due to seniority range from € 11.62 to € 46.48

Reference law:
– National collective labor agreement (CCNL) for employees and members of the
Cooperatives and members of the Social Cooperatives operating in the social-health,
welfare-educational and employment sectors.
– Legislative Decree 276/2003, Arts. 13 – 14
Implementation of the delegations concerning employment and the labor market, as per
law 14 February 2003, n. 30.
– Circular Ministry of Labor n. 41 of October 23, 2004
MINISTRY OF WORK AND SOCIAL POLICIES
Directorate General for Social Dampers and Employment Incentives Division I
Subject: Application of incentive measures for public and private connections as per
article 13 of legislative decree n. 276 of 2003

Link to documents:
Collective social cooperative contract 15/02/2017
http://cisalterziario.it/wp-content/uploads/2017/06/ccnl-coop-social.pdf
Abatement of contributory costs and tax benefits
https://www.cliclavoro.gov.it/Aziende/Incentivi/Pagine/Cooperative-sociali.aspx

6 ORGANISATION

The new social startup needs the following human resources:

Type                                                        Role                                                          n.
Able-bodied                      Coordination and management                                2
Operative                                                              –
Disadvantaged people    Coordination and management                                 1
Operative                                                      5
TOTALE                                                        8

Type of disadvantaged people:
− long term unemployed
− women in difficulty,
− young people,
− physical impaired

6.1 Roles

Ruolo                                                                      Tipologia                         N.
Winemaker responsible for production          Able bodied                       1
Sales and                                                               Able bodied                      1
communication manager
Operational central manager                    Disadvantaged people             1
Contact center workers                              Disadvantaged people             3
Apprentices                                                  Disadvantaged people             2
TOTAL                             8