http://www.TheStateGrape.com

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

It reminds me of the internet in 1995. Recall how many simply viewed a website as funny yellow pages ad, others ignored it as a fad, and many crazy ideas arrive fast and disappeared as quickly. But a decade later the web had transformed how we do and view business.

I have followed the sustainability movement since 1990 and in the past few years I see the shift really taking hold of the mainstream – it is now generating cold dispassionate investment and is no longer just propped up by the long-necessary base of feel-good support.

Small retail is a fertile ground for innovation – once you get past the numerous stores that simply make work for owners. However, an innovative green retailer is not sustainable if it is not fiscally viable. Many, including those heralded as great examples such as Nau was a year ago, will sink. The legacy will be the creative and darwinian evolutions that emerge to inspire shoppers and to be adopted my the major players in the sector.

Today, the mainstream shopper says they want green, but their behaviour shows that they want great price, outstanding quality, superb service and convenient access first. The retail owner must understand his or her market with their head and not just act on their heart.

That said, there are certainly reasons for retail to get moving on this. They have lagged other sectors for sometime and the public is expecting more that reusable bags from their stores. Furthermore, as the bar rises, those lagging will be quickly left behind, as retail leaders find ways to layer green as another aspect of profitable business excellence. And while the consumer is struggling to define overall value, good employees are aligning with the workplace that supports their values (when they have the choice).

The challenge? Show me a profitable green dollar store and I will confirm the retail landscape forever changed. I am convinced with creative brilliance and adequate financing, this will happen (well, maybe a green two-dollar store). Far-fetched? Check out http://www.terracycle.net.

Cheers,

David Ian Gray
DIG360 Consulting Ltd.

http://www.dig360.ca