Friday, December 22, 2017

2018 - The Year of The Cape!

As another year winds down I thought I would also attempt to shed some light and thoughts on the year ahead. Most winemakers, marketers and growers are enjoying a deserved break before the harvest season and I am sure each one of them are a bit nervous but excited at the same time. Nervous because of the very dry conditions their vineyards have experienced and what the crop would be. Excited in the hope that the quality will be very high and give them the opportunity to create one of the better vintages!

From a market point of view I am hopeful that 2018 will be “The Year of The Cape”. We have experienced amazing press from across the globe, a new lease on life for Chenin Blanc & Pinotage, wonderful opportunities for smaller, niche producers and the list goes on. But then again there has been very good press for a long time. Very often we read and hear from various markets that South Africa’s time is around the corner, just to be disappointed that it hasn’t happened. Maybe our expectations are too high, maybe it is just not our time yet OR maybe it is time that we go out there in full force creating that demand.

The world wine market opened for us 25+ years ago. In terms of family that is one generation and business has changed drastically in the past 25 years. What has happened is that many of our brands, big & small, have been positioned by people who are most probably retired now. Current Winemakers & Managers of Family properties inherited importers, structures, markets etc. This alone is a huge challenge for a winery and something that I encounter quite often when talking to industry colleagues. So my two cents and thoughts are:

Take time to step back and review your business model, specifically your export markets. For years SA wineries have been so grateful and happy to HAVE an Importer that they very rarely review the status and synergy. Every couple of years any business need to reset and review their model making sure they are on the right track and don’t fall behind in their market space. In basic terms, make sure that your Importer supplies the market that you want to reach. If your aim is to grow big retail business but your importer focus on HORECA and select wine shops then it is not a good fit, and Vice Versa!

PEOPLE BUY FROM PEOPLE: I will always stand by this doesn’t matter what you sell: insurance, cars, wine…Your importer and their staff is an extension of your business. There has to be a solid relationship and friendship for both businesses to grow. Make sure that as both your businesses evolve and change that it keeps the common thread built on your relationship & mutual respect. All of the above also accounts for your local representation of course.
I believe that our pricing structures in the export market have suffered because of the above or lack thereof. Our relationships & understanding of each other’s business models are not good enough to enforce increases and changes. We have to stop being just grateful and sell our stories & quality to support the price points and positioning.

DON’T BE SCARED OF CHANGE: Every year that you don’t take out a bad vineyard sets you back at least three to five years if not more. As with your commercial side you need to review your production and how effective or ineffective it is. There are many producers who have hectares and hectares of unproductive vineyards which should be pulled out, but the hurdle is the cost of replanting. Don’t worry about that cost now, plan for it properly and make sure that when you can replant your business can support it. For very year that you don’t do anything in your production chain you are taking a step back. The same accounts for people that you do business with. If something doesn’t work then look for solutions and make those changes.  Don’t be scared to cull wines from your range that isn’t profitable enough. It can be those supposed “cash cow, volume” wines that causes your business the worst headaches when it comes to CASH FLOW. The golden term for every business!

I learnt something very important from my barrel cooperage, Tonnellerie Baron, in Bordeaux. Lionel Kreff the Sales Director shared a very true statement with me a while ago. We as barrel coopers are there to look after, cherish and protect the wines that growers work so hard for every vintage. If we do not keep our end of the bargain in creating safe and enhancing vessels to their wines, then we are destroying their hard work. This is the total opposite of SYNERGY! If you feel that people working with your wines, whether it is on the farm or out selling, are not enhancing or protecting it then change it!

WORK TOGETHER MORE OFTEN: I do believe that there is already a very good support system in the industry of producers helping and supporting one another. Of course when the going gets tough there is always a scenario of helping yourself before someone else. But in the bigger picture it is becoming more and more important. The more of us who speak the same language (not Afrikaans or English), confidently promote and sell our products and help open doors for each other, the better for the holistic industry. This ‘new’ generation has a very important role to play in changing the industry for the better in totality!

Next year will be a testing one for the world wine market. However, I believe it is the year for the Cape to rise and stake down our claim! It needs to start with each one of us reviewing and analysing our own businesses to make sure whether we are on the right track. Whether we as individuals are custodians of Wines of South Africa or out there for ourselves! We cannot keep waiting for anything to happen we need to go get it! The resources, forums, support, stories and quality is there for us to use.


Merry Christmas and Happy New Year to everyone, may you have a Blessed time with Family & Friends and come back rejuvenated and ready for 2018!