Monday, November 28, 2011

A Small Step in the Industry,Giant Leap for ME!!

After some speculation and mysterious tweets I can announce what it is all about. From December 1, I will be running my own consultancy business looking after a couple of smaller wineries. Why? I was retrenched in August and had to decide what to do next. With some offers in the Wine Industry and some in Sport, I kept coming back to the same idea. During the last seven years in the industry I have seen so many smaller producers with amazing wines and stories behind the brands, but with no one to help and guide the brand. The main cause was that these wineries didn’t have the money and in many instances it is run by a passionate winemaker who doesn’t always have the time.
I started talking to some friends who were winemakers at smaller Wineries or made their own wines and the need just became clearer and clearer. The idea is to build up a portfolio of producers who shares the same characteristics. It is not about the region where they grow their grapes, but more about their vision and passion for their wines. During my time at Rietvallei Estate I never doubted the quality of the wines that I worked with and the Estate has an amazing history and tradition. The Estate Wines as well as John B grew amazingly well and I believe that the brands are known and pretty strong. Now it is about taking a small producer to the market and finding the correct channels to promote and sell their wines.

The landscape of the South African Wine Retail market has changed dramatically in the last couple of years, but unfortunately also the On-Trade Market. I do believe that there is a place in the market for small, unknown Top Quality producers. There are many consumers looking for something different, not main stream but good quality and it is this market segment that needs to be targeted.  Working with retailers and restaurants who share our philosophy and passion is going to be tough, but I am sure we can make it.

So which wineries am I working with? Lemberg Estate (Tulbagh), Arendsig Hand-Crafted Wines (Robertson) and Vierkoppen Wines (made by Kobus Burger). None of these brands are competing at any level, but rather complimenting each other with the wines, volume produced and price points. It is important to me that I am confident with the quality produced and where they fit into the market. More importantly is that we all share the same vision, opinions on the marketplace and goals. There are a couple more wineries that I am in discussions with, but nothing has been confirmed yet.

It is going to be quite a daunting task, but something that I am extremely excited about and look forward to for 2012. We are all confident and optimistic that these brands will have great success next year and in years to come.  Keep your eyes and ears open ladies and gents. You will be drinking some amazing wines in 2012.

Regards
Colyn Truter
Marketing & Brand Consultant

Twitter:   colyntruter
email:      colyn@colyntruter.com

Friday, November 18, 2011

Can Family Wineries survive??

A question that some might frown and wonder why I even ask, because all the wine farms are owned by families is it not?? The sad reality is that it’s not! My classification for a Family Owned Winery is at least two Generations had to be on the Estate, or 25 years or more under ownership and that their main business must be Wine. Does this change the picture a bit??
Looking at the amount of wineries being liquidated or sold to companies or wealthy foreigners is alarming. I have always said that the Robertson Wine Valley must be one of the most unique in the world being almost 100% Family Owned. Some of the Families have been on the property for Six Generations and more i.e Rietvallei Estate, Zandvliet Estate, Excelsior Estate, Wonderfontein etc. from the 1860 – 1870’s.  Although the area is not as old as Constantia, Stellenbosch or Franschhoek it has some of the oldest farms still under Family Ownership. But this is not a blog to promote Robertson. It is about the position that the Wine Industry finds itself in and whether this will get worst.

The consumer struggles to understand the difference between a Wine Estate and a normal brand and therefore it really makes this argument so much more important. Why are so many wine farms up for sale? Why do some of the oldest Wineries around the Cape have foreign faces running it? Corporate Companies and Wealthy Businessmen from all over the world purchase wineries to grow their portfolio and revamp the wineries into holiday destinations. The family wineries cannot compete with the larger companies buying bulk wine or grapes from all over the Cape. In the same way as the local Grocer in town cannot compete with PnP or Checkers, the small winery struggles to compete on price with the larger brands. This is a general trend in all industries around the world, but it has had a huge impact on the SA Wine Industry in recent years.

Everyone has become price conscious during the recession and people spend less on wine although they don’t necessarily drink less. The difference in sales volume per brand at R29.99 and R31.99 is huge. Not only is it the psychological barrier spending over R30 rather than R29.99, but it is also the R2 that you can save. At these price points it is all about economies of scale and sales volume. Can you imagine what difference that R2 makes on 60000 bottles sold? This is not even the cheapest segment of the market. There are brands selling under R20 on promotion and this is prices that smaller brands just cannot reach unless they lose money with every bottle sold.

If up to 80% of Wines are sold under R60 in retail then I will be very surprised if 10% of those brands are owned by a family winery! Not only is it because of the price point, but also the lack of accessibility to the market place. Most Supermarkets only stock brands with enough money or financial support to advertise and promote the wines. There isn’t really a place for a smaller, lesser known brand on the shelf. It is a sad reality that exists in our industry and it is a category owned by the larger companies. The problem isn’t always producing a brand to retail at R29.99 but it is mostly the fact that these brands cannot give more discount to be able to promote the wine at a lower price. Something that the big brands can do and they can do it often and at very low prices. Therefore taking a huge market share and cutting out any chance of a family brand to be sold. Can the Supermarkets and Retailers play a role in support of the Family Wineries? I believe they can and that they can actually turn this around for many struggling wineries. This includes restaurants listing wines that they really like other than what they think their diners might like or what is popular on retail shelves.

The limitations where smaller brands can sell force them to be more innovative, find ways and other channels to reach the consumer. Most of all they need to make their cellar door the gateway to their brand!!

So will we still see the Van Velden, Burger, Krone and Malan Families on their properties in 30 years? I certainly hope so and I hope that it will be something that becomes unique to the SA Wine Industry. This is also happening in other wine countries, but as the oldest New World producing country I think we owe it to ourselves to pay attention to this. We have to find ways to support and distinguish these wineries and educate our consumers of the specialty of their wines. Family Wineries are under pressure to become extinct, something our kids might not even talk or know about when they get to a drinking age J. How will they stay competitive? I guess that’s a discussion for a new blog!   


PS: if you cannot leave a comment on my blog please email me colyntruter@hotmail.com

Twitter:           colyntruter

Tuesday, September 6, 2011

The Impact of Ban on Alcohol Advertising?

During the last couple of weeks there have been a couple of new comments about the ban on alcohol advertising. I have been thinking about what impact this will have on the Liquor Industry for some time now and I keep coming back to the same issue. The fact that people are not smoking less after the ban on cigarette advertising is another cause of concern, but here are my thoughts on what will happen should this law pass (and we are all pretty sure it will):


Heineken is one of Europe and the UK’s most advertised Beer, at least according to me. They are a sponsor of the UEFA Cup Soccer, Heineken Cup Rugby, a couple of Golf Tournaments and I am sure involved with many other sports. With this new law they will be stopped from being a sponsor of these events. Let’s assume the Heineken Cup Rugby tournament was worth ₤100million in Sponsorship money. What will they do with this money now? If this amount was allocated towards sponsoring an event it means that they saw the merit in it and were willing to invest in their brand. Now they are not allowed to spend this money, what can they do for brand awareness and brand building? Personally I would take a percentage of that money i.e ₤25million and build it into the price of a case/six-pack of beer. The regular selling price can come down or put the beer on special a lot more regularly than it currently is without losing a loyal following. In fact by doing this I might grow my consumer base. The consumer who bought cheaper beer because of the recession might turn back to Heineken if the price drops.  


What concerns me the most is whether the powers that be really investigated the impact that such a decision will have? In the USA you can advertise an alcoholic beverage, but nowhere in the advertisement are someone allowed to drink/swallow from a glass or bottle. Has anyone seen how clever Bud Light has created such an amazing group of TV Ads that people cannot wait to see their new Ad. Almost like the City Lodge Ads in South Africa that used to be very funny and catchy, without it being the cheapest hotel to stay in. This ban won’t have such a big impact on the Wine Industry as it will have on the Beer and Spirit Companies, purely because it just doesn’t have that amount of money available for advertising. However, it will have an effect on how traditional marketers and advertising companies thought and created.

The economic times that we live in and probably will for some time, consumers will always look at price and what they get for their money. People didn’t stop drinking because of the recession they just drank cheaper wines/beers/spirits and quite possibly drank a lot more. If this Ban on Advertising will stop huge brands for spending money on visibility then I can almost guarantee you that they will use this money somewhere else. What better place and in what better way than to make their products more accessible to a larger market, making it more affordable and growing their sales volume while doing it.  

Think of the impact the cigarette advertising ban had in South Africa with many events having to find new sponsors: Rothmans July and Gunston500 to name a few. The harsh reality as well is that cigarettes have become more and more expensive every year. This still doesnt stop people from smoking even those who used to say that they will stop when a packet cost R10!!
What is very interesting though is that in recent times the biggest sponsorships around the world are coming from cellphone/telecommunications brands i.e Vodafone, Orange, Vodacom, MTN, T-Mobile, Verizon etc. Does this tell a story??

What else do you think will evolve from this Ban??

FOOTNOTE: I used Heineken as an example because i think what they have done in advertising and sponsoring has been amazing. They might be very hard hit should this Ban come through and I am also wondering what their next steps will be.


Thursday, July 28, 2011

Are our Hotels too expensive??

In the wake of learning that another Top Hotel is closing its doors I thought about it for some time and wondered why?? Speaking to many of my friends and colleagues about travelling and how expensive it is, most of them complain about the cost of their accommodation. One thing is true and that is the cost of South African hotels. I am sure that there will be someone in the hospitality industry that can tell us why and what the factors are, but comparing our rates to the rest of world tells a different story.
If I can use the USA and compare their rates with what is in South Africa you will be very surprised…even if you have to pay in US$. They have a huge number of websites to choose from where you can go and select the area, hotel rating, amenities etc that you would like. I just did the following as an example:

On www.hotwire.com I selected Chicago and put in the dates 29 July – 1 Aug. My options were the following:

4.5* at O’Hare Airport which is about 16km from Chicago City Centre $81=R550

4* on Magnificent Mile - $109=R741 (Oprah's favourite shopping strip)

I did the same on a popular local Hotel Group website and chose Cape Town and the rates I got was R1079 per night and this was not 4* or more.

For between R300 – R650 I could stay cheaper in Chicago than in Cape Town and remember that if I had to refine my search and choose a lower rating hotel the cost will come down even more. There are many of these websites and you can get amazing deals on them with unbelievably low prices.

Personally, I don’t know enough about the cost of managing hotels and their daily running cost, but I just find it very strange that even paying in US Dollar I can stay cheaper abroad. Now the Tourism Bureau and everyone are up in arms and cry for help because so many hotels are closing down. South Africans expect to pay more for accommodation when we travel in Europe and North America because we have to pay in Euro or Dollar. I don’t think Americans or Europeans view South Africa as a cheap holiday destination anymore and therefore they choose to travel to South America, Indonesian Islands or even Australia. Maybe even other African countries who knows.

The hospitality industry will have to look at the competition out there and adapt accordingly. Just like our Wine Industry has to be aware of what other countries do and charge for their products. It is tough out there and it is not going to get any easier. Rather have a bum in your bed at a discounted/better rate than nothing at all!!!

Wednesday, April 13, 2011

Building a Brand with someone else's Wine??!!

Is it just me or are anyone else also concerned with what is going on in our market regarding the bottling of Wine of Origin wines???
Excuse me Perdeberg for using you as an example, but I cannot understand that you go buy in grapes from Durbanville to improve the perception and profile of your brand? There is really NO logic or common sense in this, but maybe I am wrong. It is like Kia that releases a car BMW actually built? Choosing Riesling as a varietal makes it even more difficult to understand why don’t you do it with a varietal that is performing very well in Perdeberg and source your grapes from there? In their defense, they are not the only one’s doing it and not the only brand that is built on WO Western Cape rather than true Region specific wines. In fact, go and have a look at your favourite brand and see what is the Wine of Origin. If it’s Western Cape, then there’s your answer and similar to Coastal Region…of which Tulbagh is actually also a part of, is my geography that bad?




The consumer doesn’t know what these regulations are and the detail around it, but in South Africa you are not allowed 1% to come from outside of your Wine of Origin to still bottle it like that. For example, if your winery is in Durbanville you cannot bring in wine or grapes and bottle it under WO Durbanville, then it must be Western Cape or Coastal Region depending on where you got the wine or grapes from.

In Napa Valley you can bring in 30% from outside Napa and still call it Napa Valley Wine, anything bigger than that is California Wine (I’m pretty sure this % is correct). Don’t you think we should strive towards more WO specific wines to show our true diversity in South Africa? If variety is in our nature then surely Western Cape is just not going to crack the nod for us because it doesn’t carry weight. Sourcing wine from all over does not make you a good winemaker. Working with what harvest gives you every year takes skill and craftsmanship to turn out consistent quality per vintage! This is what makes Estate Wine unique or at least should because we are not allowed to bring in grapes or wine to blend or bottle under our Estate Label.

Too many brands are being built in the world market on Western Cape rather than Stellenbosch or Elim. Too many times we take the easy way out by blending wines from various regions because we think that makes us different and unique. Well I disagree. If you really want to put unique, different and diversity on your back label then prove it with the wines that YOU actually make. I agree blending is an art, because i know thats what a lot of you think now, BUT blend with what is in your barrels and tanks. South Africa need to compete on quality and NOT volume and if want to tell stories tell it with what happened and happens on your proporty. Not some old ladies farm in the kalahari that still has some old Hanepoot left and you making Late Harvest from it.

Colyn "The Leg" Truter
Email:      colyn@rietvallei.co.za
Twitter:   colyntruter

Tuesday, April 12, 2011

Challenging All Wine Media!!

With the announcement of their Top 100 wines by Angela Lloyd on Grape, which wasn’t very surprising or exciting, it urged me to write this blog. The same names whether you published it last year or in two months time was there. Honestly is this how boring our industry has become, no new and exciting producers with Top Quality? No wineries that have shown over many years that they can stand up against any competition without being main stream. Like she says, certain wineries ‘will’ always be included in a Top List or rarely miss out on one…really? So basically another Platter judging on name and label without even tasting the juice. Geesh, I really thought there would be something new after all the years of debacles.
If the Top 100 competition wanted to really make an impact they should’ve just made their whole entry criteria a lot easier and viable for everyone, big and small. That would’ve caused a stir I am sure.

Why, I ask the question? Because no one dares to try something new or search for new exciting wines and actually promote them? Would Eben Sadie have had the profile he has today without all the PR and write-ups? We all know the power of the pen, or these days the keyboard, and the journalists know it too. Especially those writing for big websites or magazines that have a huge amount of followers/readers and who can change perceptions. Yet they all go to the same events, write about the same events and review the same wines.

Last week someone tweeted about the amazing launch of Brampton etc, and I had to reply “anything can be done with money”, because that is what the smaller guys don’t have. Have you ever seen a rich guy without a HOT girl on his arm? In a previous blog I gave a couple of ideas on how a smaller producer can use his budget effectively and they are the people who will benefit most in this regard…so here goes.

Why don’t you stop writing about all the well known brands/wineries and do yourself a favour by searching for hidden gems. Search for Estates/producers who have been around longer than you have been walking, but who can’t afford a launch or tasting at The Mount Nelson or Butcher Shop. What about the new guy who started a boutique brand on his family’s farm or renovated his Great Grandfathers cellar to make his dream come true. This is the wines that I believe the public wants to know about and the kind of information that is newsworthy and interesting don’t you think? How many times must I read about how old Winery X is or how wonderful C Wines are when I can go to the local Supermarket and buy a bottle. These brands are well advertised, promoted and accessible all over the country.

The social calendar of journalists/bloggers/wine writers has probably been filled with events for the ‘big wine brands’ launching new vintages, new wines or a new cellar door sales girl. Just ask Anel Grobler, Spit-or-Swallow fame, how quickly she started to get invited to all kinds of events once Spit-or-Swallow got noticed!! Flying them all over the country to taste and attend events and of course, write about it. Spit or Swallow presents a very good platform to smaller wineries to get noticed and talked about because of their Wineflies. The Wineflies are normal people who just want to travel and have fun with wine while discovering new producers, new wines and not necessarily go to your mainstream places. Visit the website www.spitorswallow.co.za and you might even learn about places.  

Jean Engelbrecht mentioned at the Vinpro Day in January that the local media must be more positive about our industry rather than always looking for problems or negative topics to write about. Maybe this is a good start by really trying to discover more of the unknown, lesser known or even older Family brands who just do not have the money to compete with what goes around. The journalist who starts this will get more followers on twitter, more friends on Facebook and much more pats on the back from the father, son or grandson who has to continue his family’s legacy. The information that you supply to the consumer is invaluable and cannot be measured in Rand and Cent, but definitely by the number of people who suddenly knocks on your cellar door or orders from the farm.

I can imagine that life is tough up there to decide which events you will actually like to attend, after all who will say no to a Freebie of some kind. Next time weigh up your options on where you will actually find something new, exciting, informative and special that will easily make up 3000 words. What about a chat with Oom Johnny Burger about the history of Rietvallei Estate, stories about the days before screwcaps and PET bottles, the industry 30 years ago and funny things that have happened over the years with him, his forefathers and what he thinks of the industry today. This is the kind of stories that keeps glasses full and ‘hits’ on websites increase…try it, you have nothing to lose!!! Or maybe what I will do is launch a wine at R10000 only 100 bottles made and 10 barrels used…bet that will get a S#%t load of attention and LOTS of write-ups J

Colyn Truter
Twitter: colyntruter
Facebook: rietvalleiestate
Twitter:    rietvalleiwines
Facebook: johnbwines
Twitter:    johnbwines

Thursday, February 24, 2011

Where is the cool climates of the Cape Winelands?

The temperatures in summer can go well above 40*C in the Cape Winelands. During the last six years, since I started working for Rietvallei Estate, there has always been this stigma/myth about Robertson being too HOT. I finished my last three years of High School in Robertson (not going to give my age away) and my parents lived there till 2006 so I have enough experience about living in the Robertson Valley. Since 1999 I have lived in Stellenbosch, with a two year break in 2003 and 2004 when I played rugby in Canada and New Zealand. So I would say that my point of reference in this topic should be fairly trustworthy from a personal experience point of view.

I realise that the old wine "regime" always had this idea that Robertson was too hot to produce good quality wine and they always made sure it was talked about because they bought a lot of their bulk wine from the Breede River Valley producers (Robertson, Worcester, Rawsonville, Bonnievale, Montagu, Ashton etc). Unfortunately this also transferred into the general consumers mind and even media write about this, because that is what was said. So what do we do with the perception that Robertson is too HOT? Well let's start with this: When people say this, it is as if Paarl, Franschhoek, Stellenbosch and Durbanville (PFSD) are NOT HOT. The way they talk about the heat in Robertson almost sounds like it is the only place that heats up.

My office is in Stellenbosch and I can tell you that the heat definitely didn’t spare anyone anywhere in the Western Cape. Those of you reading this and living in and around PFSD will agree, but the worst of all is that the nights are warm as well which makes for sleep deprivation. I spoke with a couple of Airconditioning companies during January and they were flooded with orders. Even GAME stores in the Western Cape SOLD out of their airconditioner special weeks before it was supposed to end. Do I have a point, you bet I do! Look at these figures from three out of the twelve weather stations in the Robertson Valley: (there is a lot more data available)


Robertson
Bonnievale
La Chasseur
January
Max
Min
Max
Min
Max
Min
4
38.8
16.0
37.8
17.4
39.9
16.8
5
37.5
18.2
36.7
17.1
39.3
20.0
6
38.0
19.5
36.7
19.4
39.7
17.0
7
40.5
15.5
39.4
15.5
41.4
17.1
8
34.8
13.7
33.1
15.3
36.3
16.2
9
31.3
19.6
30.1
19.6
31.6
19.2
12
34.3
13.2
33.7
13.5
35.5
15.1
15
34.0
16.1
32.5
15.3
36.1
15.4
16
32.4
13.2
32.8
13.7
31.9
14.3
18
35.0
18.0
33.8
14.6
37.3
15.5
19
35.8
17.6
34.1
18.6
36.0
17.0
21
31.6
14.0
29.8
15.6
33.5
16.7
24
31.5
14.6
30.3
15.9
32.6
17.2
25
35.0
19.8
34.0
19.5
35.4
19.8
26
33.5
16.7
32.0
16.1
35.1
18.1
28
30.5
15.3
29.6
13.9
31.6
15.0
29
34.4
14.4
33.1
15.0
37.0
18.0
30
30.8
14.5
30.3
15.1
32.6
16.8
31
30.8
16.3
30.1
15.9
32.0
15.1
19
34.24
16.12
33.15
16.16
35.5
16.9

We all remember that first week in January where the temperature soared over 40*C. But look at how cool the nights were in Robertson after a day of sweltering heat. Up to 25*C fluctuations in temperature!!!! During 19 days over 30*C there is an average fluctuation between Max and Min Temperatures of around 18*C. I can tell you that during that first week in January my house was 34*C at 2am for more than one night...and I don’t live in Robertson. Apart from this there was also many days where the Max Temperature was in the low twenties with a day or two around 21*C.

Without going into too much detail in the advantages of these low temperatures at night for the grapes, winemakers and viticulturists I can tell you that it is a huge contributor to the colouring of the grapes. The cooler temperatures also helps the vines to rejuvenate themselves and recover from the day's heat a lot quicker than in warmer temperatures. Very much like a marathon athlete or rugby player that needs an ice bath to help with the recovery of their muscles.

So is Robertson a warm climate producing area?? Sorry but I disagree, even if there was a GAME in Robertson, their airconditioners would not have been sold out, because you can actually sleep at night with only a fan or without it. It is not as if Robertson is 40*C and other regions are 25*C. When it is HOT in the Cape Winelands it is HOT everywhere, but which area cools off the most? There is a lot more data that the weather stations capture, but I wanted to show all of you that the perception of Robertson being too HOT or much HOTTER than the rest is FALSE.

I hope you enjoyed this article…

Take Care

Colyn “The Leg” Truter
Twitter:           colyntruter
                        rietvalleiwines
Email:              colyn@rietvallei.co.za
Facebook:        rietvalleiestate