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Jan 28 2009

About marketing SA wines abroad

Published by at 4:48 pm under Opinion,Top Stories

The February issue of WINE magazine landed in my post box this morning and after a first “page-through” I must coin a new wine term. 

The term is ‘brand bubble’. No, it has nothing to do with the oft-heard term ‘wine lake’. It refers to an oversupply of another kind, namely of labels, or brands in the Cape wine industry.

Over the past decade almost every new issue of WINE magazine introduced new labels to the world. And every year the Platter Guide got fatter and fatter. To the point where one must wonder whether there isn’t a huge ‘brand bubble’ out there.

Hundreds, if not thousands of labels – many for wines of which only a few hundred cases are produced annually. And still there seems to be no end to the flow of new labels.

So what? you might ask. Isn’t that a sign of a healthy, growing industry? Well, no. To me it smells of decadence. This urge to see your name on a wine label.

No, the notion that every farming unit should have it’s own label – no matter how small the harvest and without a thought for the marketing consequences – belongs to a different era. Not in today’s world with its ‘wine lakes’ and tight trading conditions on world markets. Let’s call it ‘overdone individualism’.  

But, experience has shown that wines made “co-operatively” seldom leads to excellence. Yes, there are exceptions to this “rule”. But, wines made from grapes delivered to a central cellar by a number of farmers seldom leads to excellence.

Why groups of wine farmers haven’t yet “banded” together to market their (separately produced) wines under a single brand (or label), is a bit of a mystery to me. Call it an umbrella brand. In other words, co-operative marketing. Instead of co-operative winemaking. As a way of securing (preserving) diversity and the small producer in the Cape wine industry. Shouldn’t that be the starting point for marketing efforts such as USAPA? (Read about USAPA here.)

Co-operative marketing could work like this: Wine producers in a geographic area (say Robertson, or Malmesbury, or the Hemel en Aarde valley) form “marketing units” each consisting of any number of farmers with confidence in each other’s winemaking abilities (the more in a unit, the better); each unit selects a brand name (say unit X selects “Bakgat Wyn” as its brand name); all wines produced by the farmers in unit X are then marketed under the name “Bakgat Wyn” and the label is customized for each farmer to show (maybe on the front label) the name of the wine estate and (on the back label) other information, such as the name of the winemaker etc. 

In short, one label, many farmers, each with their own style, each singled out on the label. Suddenly the ‘brand bubble’ is gone. Suddenly USAPA has it much easier to market SA wines.  

Important: The individual winemaker stays. As does diversity. Even Platter stays as fat as it is.

The only change lies in the marketing effort. Suddenly it isn’t such a train smash when the conservative German wine buyer (who always buys the same wine brand) can’t find his favorite Springfield on the shelves (because there simply isn’t enough produced to have it on the shelves all year round). Instead of buying “Bakgat Wyn” as made by Abrie Bruwer from Springfield, he now tries any other “Bakgat Wyn” on the shelf – maybe it is “Bakgat Wyn” from Dewetshof.

Has the time not arrived for us to replace the “overdone individualism” (which has characterised the Cape wine industry for so long) with an “underplayed” or “understated individualism”? And really get the export effort going…

5 responses so far

5 Responses to “About marketing SA wines abroad”

  1. adminon 28 Jan 2009 at 5:01 pm

    In its purest form this approach would see a single “marketing unit” (to which all producers belong) and a single label (or brand name) for the whole Cape wine industry.

    I didn’t mention it above, because it’s not realistic. The big players (such as Distell, who have invested lots to build their own brands) will never join in.

    So, it would be over to pockets of smaller wine producers to grab the initiative and form their own “marketing units”.

    Christo

  2. adminon 05 Feb 2009 at 7:26 pm

    Of course, giving input into a debate without the “basic picture”, is really irresponsible. I’m talking about the statistical picture showing us what the challenge is…what we must (and realistically can) achieve.

    For instance, how much wine do we produce annually; what percentage is sold locally; what percentage of the remainder is exportable; how much of the “exportable” wine do we actually export; now we get an idea of the challenge; and now we can decide which countries (or cities in countries) we can and should target; next we can get a rough idea on how much money we’ll need to market into the selected markets.

    I’m sitting far away and I don’t have all the info, but I get the feeling the rallying call is simply “we must get more wine into the US”….without knowing what we want to export, how much of that we have to export and which regions should be targeted first.

  3. adminon 05 Feb 2009 at 7:58 pm

    There are a number of aspects to my “cooperative marketing” idea which make it radical. No doubt about that. But there are a number of factors speaking in its favor. Such as the thing called “peer pressure”.

    We’ve all heard the story about the micro-loans for the ultra-poor and how the repayment record is surprisingly good, thanks to peer pressure.

    Most wine farmers reading the cooperative marketing idea the first time, will say “rubbish…I won’t risk my wine-making reputation and good name in a group of winemakers – even if I selected them myself…it just needs one to bugger up one season, and the label is gone”.

    Of course, that can always happen. But, I bet my bottom dollar that cooperative marketing will more likely work the other way around: It’ll improve the general quality of wine made by a particular unit over time – thanks to the factor peer pressure.

    If a group of friends (maybe neighbors, maybe a group of garagists) decide to band together and give it a go under a single label, they will try even harder not to disappoint their colleagues than before. They will enjoy the benefits of marketing a single, bigger volume label and – as an unintended extra – they’ll find the quality rising.

    Of course, a few egos will have to jump over their own shadows, to kick-start the idea of cooperative marketing. But, here again – not everyone has to join in. Why would eg. Kanonkop (an estate which has no problem whatsoever to sell all its wine every year) throw his successful label into the pot and go it with a group? No, Kanonkop won’t. But, not all are in the lucky situation that Kanonkop finds itself in. And the “not-so-luckies” (call them second leaguers) might find the idea interesting.

    Christo

  4. Emileon 20 Apr 2009 at 2:55 pm

    Very valid point. Without volumes we (South Africa) will never crack the American market. Big brands should pave the way, whereafter the minnows can have their egofest.

  5. adminon 20 Apr 2009 at 3:19 pm

    Hi Emile,

    Thanks, bro.

    I still believe in this idea of “cooperative marketing” (as opposed to cooperative producing).

    Unfortunately, we are seeing ever more of the second kind here in Germany: Wines sold and exported in bulk by cooperatives and (I suspect) a well-known big producer in Paarl, are bottled in Europe under the most obscure names and land on supermarket shelves in Germany with price tags you simply won’t believe (competing with the lowest of the low quality wines from Italy and elsewhere). The labels don’t even say where the stuff was bottled, leaving the impression that the wines were bottled in SA. (Naturally, the labels leave no doubt that the stuff inside comes from SA.)

    Someone in SA should stop this “undermining of Brand South Africa”.

    At least, the big, bulk exporter based in Paarl should be forced to do label-checks (if not content-checks!) of his bulk wines after they’ve been bottled here (he should build the right to check into his bulk wine sales contract – for the sake of all the other quality conscious wine farmers in the Cape!)

    Man, man. This borders on “hoogverraad” against the Cape wine industry.

    Christo

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