Beretta: 500 Years of Family Ownership
In the annals of business history, few stories resonate with the enduring power and adaptability of Beretta.
As the world’s oldest gunmakers tracing its roots back to 1526, this Italian titan stands on the cusp of its 500th anniversary in 2026. The recent Preferred Shares podcast describes Beretta’s journey as “one of the most fascinating stories of all time.” This is a business that has “survived … countless wars, diseases, shortages, booms, busts, endless competition, murder, [and] exile.”
The fact that Beretta is now on its 16th generation of family ownership is no accident. It is the result of a unique confluence of factors: the surrounding geography that made it unique in the world, the firm’s unwavering principles, and its strategic emphasis on the civilian gun market over multiple centuries, among many others.
Let’s explore some of the key factors that define Beretta’s enduring legacy.
Importance of Geography
The next important thing to note is the geography of the valley. And this is another reason why the industry started and prospered in the place where it did. The valley is very narrow and there was little ability to cultivate the land. In the 1560s, it had a population of about 18,000 people in 38 different villages divided into 17 different communes. And all of these had fairly ample self-determination in their local governments. Also important is the fact that the Mella River ran through the valley. And this also provided water power to the various local industries.
There were about eight iron ore smelteries and about 40 smithies during this time. All kinds of weapons and firearms were made from muskets to crossbows, cannon balls, and all kinds of different tools. And yet another, perhaps the most important, feature of the Valley was that it had an abundant source of ore deposits that yielded almost pure ferrous carbonate. This essentially meant that this was excellent ore. It was easily worked because it was virtually free of phosphorus and it often contained manganese, which apparently yields excellent smithy iron.
And furthermore, another unique feature about the valley was that the ore penetrated deep into the mountains of the region. The miners didn't have to go very far underground, which means they could build mine shafts that followed the ore veins with only a slight decline. And this made it much easier to extract than in other regions of the world.
Plagues and Vendettas
After the bubonic plague worked its way down to Northern Italy in the early 1600s, a cycle of violence and vendettas began in Gardone val Trompia. This lasted for the next 100-150 years.
But also during this period … the Bubonic Plague would strike Northern Italy and then descend into Gardone in 1631.… This decimated about one third of the local population in the valley. The iron mining towns became ghost towns.
The barrel and gun masters during this time had to use melted down scrap that was imported from outside the Valley for their work and quality declined greatly. And times were so desperate that the Venetian authorities revoked the outlawing of people involved even in violence and murder so that they could assist with the rebuilding of the population and the industry.
Also, I don’t know if it’s coincidence, but probably not, this is roughly the beginning of a long period of feuding between local families and factions of the Valley. And this would be a hallmark for the next hundred to 150 years. And just to put this in context, there's a lot of bad stuff going on. They had the plague, they had the wars, and also the populace was highly armed. Virtually everyone was carrying a sidearm or a musket or an arquebus in this town. So … when tempers flared or when honors were aggrieved, it was quite easy to take matters into your own hands. So beginning in the 1600s, there just seemed to be a never ending cycle of violence and cold-blooded murders between rival families in the Valley. But it's also important that during my reading it was rarely mentioned the Beretta family ever played any major part in this feuding.
Despite the violence, the Beretta family managed to remain mostly uninvolved. This undoubtedly contributed to its longevity.
Countering Cyclicality and Other Challenges
Also, as a crucial supplier to nearly all European conflicts, the fortunes of the barrel masters in Italy ebbed and flowed as wars came and went. During periods of military lull, it was “the production of luxury civilian arms that allowed for the survival of the barrel makers.”
The focus on civilian sales saved Beretta numerous times throughout its history. Their flexibility enabled them to pivot between military and civilian markets, and this, combined with a deep-rooted commitment to quality without compromise, allowed Beretta to adapt and thrive where many others fell to the wayside.
Summary
Being blessed with a valley that was rich in high quality, easily mined iron ore was an excellent starting point. Today, at the end of 2024, Beretta the gun manufacturer had over €300 million in revenues with a 13.5% EBITDA margin. The Beretta holding company earned over €1.7 billion in revenues and is well diversified in the civilian and military markets for guns and many related products.
However, geography and luck are not the only reasons for the firm’s continued success. It’s been a combination of always having a focus on muting the cyclicality of its end markets, remaining focused on producing the best possible products for its customers, the pragmatism of always choosing the best leader from within the family, and the slow and steady approach to its expansion and perfectionism.
Please follow the link to listen to the full episode.
Please Share and Subscribe
If you enjoyed this content, please share and subscribe. Leave a comment as well if you have the time!
Disclaimers for this Substack
The content of this publication is for entertainment and educational purposes only and should not be considered a recommendation to buy or sell any particular security. The opinions expressed herein are those of Douglas Ott in his personal capacity and are subject to change without notice. Consider the investment objectives, risks, and expenses before investing.
Investment strategies managed by Andvari Associates LLC, Doug’s employer, may have a position in the securities or assets discussed in any of its writings. Doug himself may have a position in the securities or assets discussed in any of his writings. Securities mentioned may not be representative of Andvari’s or Doug’s current or future investments. Andvari or Doug may re-evaluate their holdings in any mentioned securities and may buy, sell or cover certain positions without notice.
Data sources for all charts come from SEC filings, Koyfin, and other publicly available information.