Friday, January 17, 2014

Competition vs Consumer Wines

In reply to recent blogs and remarks by Mr. Christian Eedes and Mr. Tim James about the lack of or low quality of 'entry-level/pool wines' in South Africa, I would just like to give my perspective from a marketing point of view.

Wine judges/media like them get invited all year round to lavish wine launches, new releases and lunches/dinners by producers aiming to impress with their best wines. Why would a producer spend the money, time and effort to invite knowledgeable connoisseurs like them to the new vintage tasting/launch of their R30 bottle of wine?? It must be very difficult for them to enjoy mass produced entry level wines sold through big retail and aimed at the volume market like most of us do even when they just relax at home and not judging. The reality is that very few consumers get the chance to taste the wines they do and of course don’t have the wine experience and education they have.
Promoting Great Value from Specific Producers
Little fact: Wine Enthusiast released figures around 4 years ago, which by now probably have changed, that 84% of all retail wines in the USA sell for $12.99 or less. The percentage of wines sold over $25 are very small and I can’t remember the exact figure but I think it was something like 4%. Put that into our local market and you can look at retail wines below R50 compared to anything above that and I think we could look at very similar percentages. (No you can't suddenly multiply $12.99 with the exchange rate and try compare that to our local retail price points)
A range promoting Wine of Origin, selling for more than half the price it would under brand owners label. 
What does this have to do with it? The wines that they have shot down on the side of the pool are what a very large amount of consumers buy every day. I don’t agree that they are as bad as they mentioned but can understand that it is difficult for them to taste the wines within context. How do you taste the Inspirational Batch Chenin Blanc one day and then have to ‘judge’ a big volume supermarket Chenin Blanc the next. I know Christian tastes for Best Value, I am not sure about Tim, but that is a once off and once a year.

My passion has always been brands and consumer behavior and one thing that stands out clearly is the lack of marketing skills in South Africa to grow the wine consumer base. Some producers advertise their R40 wine as if it is worth R400 when you look at the text and imagery. The spirit brands have always been a great focus point for me in the way they structure their products and advertise accordingly to the consumer.
John B Wines by Rietvallei Estate - great value for everyday drinking!!
We need to understand that wine is competing with masses of RTD's, Beer, Spirits and now a big threat, craft beers. Consumers can buy 2 bottles of decent quaffing wine cheaper than 12 beers or RTD's, but do we attract them and convince them to do it?? NO, unfortunately. Very few of us get to taste the wines that Mr Eedes, James & Co get to, but the reality is that the market for people spending more than R100 retail on wine is very small. There is definitely still a lot of snobbism around wine in South Africa and that is hurting the category. It is good to see though that there is a younger wine crowd attending wine tastings and festivals which hopefully bodes well for the future. I think we have a very competitive category of wines under R50, but i also don't think our local retailers are always listing the best wines, but rather who can supply them best.

Let's hope that 2014 bring us a great harvest and good luck to all the farmers, viticulturists and winemakers.