Wines from Old World countries like France, Italy and Spain and New World wines from California seem to always garner most of the experts’ accolades. The majority absolutely deserve these high ratings, but there are many outstanding wines from other parts of the New World.
South Africa, Australia, New Zealand, Argentina and Chile are producing fabulous wines. In many cases, their prices are well below those of their European and California counterparts.
Over the past three years combined, these New World countries have accounted for 22 percent of the wines on Wine Spectator’s top 100 list. In 2006, 25 percent of the top 100 came from these countries.
South Africans have been making wine for many years. Over the past few years, they are getting recognised for making some quality wines.
They plant more white grapes than red. Much of the white produced is Chenin Blanc. They also have been making some very good Sauvignon Blanc.
Their top red varietals are Shiraz (Syrah), Cabernet Sauvignon and their creation Pinotage, a cross between Pinot Noir and Cinsaut. Pinotage used to be hard to find, but is starting to pop up more regularly at wine shops.
On international wine markets South African brands are doing exceptionally well. Leading South African wine producer, the company of wine people™, has announced an increase of 21.9% in sales of their flagship brand Arniston Bay. This is largely driven by the success of its revolutionary, environmentally friendly packaging format, the Arniston Bay pouch.
Wine of South Africa’s UK market manager, Jo Mason, said it is satisfying to see South Africa performing so well in one of its most established export markets. “South Africa enjoys an enviable image in the minds of UK consumers and the quality and value for money the country offers are clearly having an effect. The more established South African brands have been successful this year.
Source: Ventura County Star
Response to Michael Fridjhon’s article, ‘Big brands and terroir – Two means to getting South African wine taken seriously internationally’, Business Day 2nd July 2008
There is no reason why our South African wine industry would need to have to choose between big players and small boutique winery strategies when advancing on world wide wine market.
Perhaps as one who has worked within the field of Strategic Marketing for over 16 years, whilst maintaining a passion for wine tasting, collecting and more recently wine making, I feel that the road may not be quite as black and white as you might suggest. I do however need to add that being married to an Australian has also ensured a fairly extensive exposure to the Australian wine industry over the past two decades. This latter admission may or may not put some prospective readers off, but I feel it better to get everything out in the open upfront. It is easier however to admit to such things when the Springboks are the World Champions, and the Australians uncharacteristically quiet.
As a result of my background and interests explained above, I feel it appropriate to respond taking all of these factors into account, in the hope that one can draw an adequate conclusion from the culmination thereof.
From a professional Marketing perspective, there is little doubt that the South African Wine Industry Brand requires significant brand equity investment and strategic advancement. We are clearly being left behind the rest of the New World, and likely to be left further behind in the not too distant future with China and India developing vineyards at the rate of knots. As soon as their marketing kicks in, there’ll be all hell to pay. The recent demise of the SA Wine Council is a serious indictment on the industry as a whole. Forget the internal political reasoning for now, however we cannot afford to leave our highly disjointed wine industry to compete on the world stage against the likes of Australia, California, Chile and others unsupported. The South African wine industry needs a banner, and a proud one at that, under which to fly ones own well defined and perceivably differentiated terroir and product brands. My ill fated attempts some years back to assist the then Paarl Vintners Association in strategically getting together under an overriding regional brand banner, whilst still being able to maintain and enhance their individuality and unique brand equities, was a very interesting litmus test to what appears to be a much broader industry failure.
I feel that it therefore needs to be emphasised, that having the best of both worlds, i.e. big brands on one hand whilst terroir and estate or boutique brands on the other need not be conflicting at all. Rather they should be combined to ensure maximum advantage by advancing on the global market from both sides of the stage, but under a unified banner. On the one hand; big brands with significant economies of scale to ensure quality consistency, cost effectiveness, marketing muscle, ability to hire the best growers and wine makers in the world (on contract whilst mentoring local successors), and leveraged to support and help develop positive wine industry transformation through growth rather than through substitution.
On the other hand, each estate or even wine category and product within the larger producers will still need to stand the test of time, and to ensure clearly perceivable differentiation and unique selling propositions to their strategically selected target markets. This form of target market segmentation research should be broadly funded and supported by the wine industry, and further extrapolated and used to best advantage by each wine producer individually.
An example of this perhaps could be the overriding banner of our very own Richemont on a global stage, whilst Cartier, Piaget and Montblanc produce completely different product ranges, appeal to different target markets or similar target markets under different circumstances, and therefore need to ensure that their unique selling propositions stand out in a unique way. These individual brands and products need to be priced to ensure perceived value within their chosen target market, distributed according to market logistics and preferences, and promoted in such a way as to further entrench the perception that each wishes to project individually. In the meantime it is the Richemont overriding brand equity that holds them all together under a very well respected banner, one that doesn’t have to be obtrusive to be effective.
Pernod Ricard’s Chivas Regal and Jacobs Creek is another case in point. Two distinctly different alcoholic beverages, targeted at distinctly different drinking occasions not to mention completely different target markets, yet successfully marketed under the overriding banner of Pernod Richard. Brandhouse is another good example.
In conclusion; I see great opportunity for this industry of ours. However the wine bodies that guide and direct them need to be filled with people from broader business related backgrounds, rather than just emotional and sentimental wine producers, worker representatives and the likes. Many of these are highly respected and extremely successful in their own rights, but perhaps not adequately equipped to drive a national industry on a global stage effectively against their counterparts e.g. Australia.
As one married to an Aussie, it is clear that if the Australians can turn a local market of beer drinkers into reasonably knowledgeable wine drinkers, there is hope for our entire domestic market growth without having to export even a drop. Remember the highest growth in the top end whisky market is coming from our own emerging middle class, black, consumers. Perhaps an opportunity being largely overlooked by our own wine industry, though there have been some attempts, perhaps at the wrong level from a brand value perspective. Why shouldn’t a Meerlust Rubicon, or Buitenverwagting Christine be consumed at the same table as Johnny Walker Black or Blue, or Lagavulen? Target marketing and knowing ones market is key, but we still need to move in the same wave on a global scale albeit individual drops making up its force.
Greg Castle
MD – Torquil Strategic Marketing
http://www.torquil.co.za
greg@torquil.co.za