An article published on wine.co.za today covering a speech I made to members of the South African wine industry at a Great Wine Capitals event last week.
Accept that wine is a commodity, says International Wine Commentator
Apart from the top-selling champagnes, ports and sherries and a few illustrious collectibles that are more often to be found on auctions than in shops, it is hard to think of a wine brand that would sell in duty free shops across the world in the same way as a spirit like Absolut vodka or Gordon’s Gin, in his view.
Editor-at-large of Meininger’s Wine Business International and author of the influential Wine Travel Guide to the World, Joseph was addressing Cape wine producers ahead of the opening of entries for the 2015 Global Great Wine Capitals Best of Wine Tourism Awards.
Cape Town is a member of the global network of the world’s leading wine-producing countries that share international best practice to advance standards in wine tourism across the world. Its participation is supported by the city of Cape Town and the Cape Winelands District Municipality.
Joseph said most wine shoppers had a limited interest in wine and bought it as a commodity. “For the majority of people it is a grape-based alcohol beverage, bought in much the same way as beer. In this respect Pinot Grigio and draft beer can be pretty interchangeable”.
Even at the top end, when it is bought as a luxury, many people are less interested in the grape variety, vintage or winemaker than in the status the liquid confers – or the pleasure it gives. “How many of the wealthy Russians buying Lafite and Latour in London restaurants know which grapes these wines are made from?”
He attributed the lack of internationally recognised wine brands to the fact that the market was highly fragmented, and densely proliferated with small-scale producers who lack the marketing budget to build and sustain brands. “Wine messaging and packaging is inconsistent and confusing. Wineries fail to understand what consumers want – and do not do enough to make wine more accessible – and desirable.
“It is crazy to package a R30 wine in the same 75cl glass bottle as one selling for R3 000. Especially as the only reason we use 75cl glass bottles is because that was the lung capacity of a 17th century glass blower.”
Urging producers to rethink the way they presented their wines to shoppers, he lauded those taking their cue from the perfume industry. He also said producers should market their cellars as wine tourism destinations on their packaging, encouraging the public to visit their cellars.
He argued that worldwide, wine producers did not do enough to draw visitors to their cellars. They should be highlighting their websites on their labels. They should also be communicating differently on their websites. “Don’t use your website just to talk about yourself and your property and your winemaker. Winemakers are not intrinsically interesting to consumers. How many people have heard of Sir Jonathan Ive, the genius designer of Apple’s most revolutionary products? These devices have revolutionised all of our lives but you don’t need to know his name to buy an iPad. Think of marketing wine in the same context.”
He said producers needed to provide information on their websites that was useful to consumers, including details of other local attractions and facilities.
He stressed that tourists visited wineries to be entertained. “That is what California has got right. They understand that wine tourism is not merely a matter of offering tastings. That’s not tourism – it’s try-before-you-buy retailing.”
He said that wineries that believe that they don’t charge for tastings are wrong. “Everybody who walks through your door is paying you – with his or her time. They could be spending – note the term – that hour on the beach, or shopping or in a gallery. Charging for tastings means that you are not doing anyone a favour, and you have to offer value for your customers’ money.”
He encouraged producers with cellar door facilities to cater for designated drivers, children and possibly even pets, and said they should ensure their cellar door staff were not only well-trained but incentivised to optimise the experience for visitors. “Give visitors free wi-fi access so they can talk about you in real time on social media. And give people an experience they can’t get anywhere else by offering vintage or exclusive tastings. Also, think about inviting them to give you their opinions about new labels or wine styles you are thinking of introducing.”
Selling directly to consumers via wine clubs enabled producers to establish a relationship with them, to find out their preferences and sell more profitably than via retailers. “In the US, wine consumers tend to join several wine clubs simultaneously and will remain with a club for an average of 24 months and spend $1 200 to $1 700 over that period. This figure is partly explained by the higher prices commanded by US wineries, but the average of US$37 per bottle consumers pay when buying direct is significantly more than when they purchase in a retail store. A fast-growing 10% of all wine in the US is now sold directly to consumers – despite rules that ban shipping between some states.”
He said the recent austerity drive in China to temper excessive expenditure should not deter producers from recognising the importance of that country as a potential source of tourists to South Africa. “The Australians understand the value of Chinese visiting wine drinkers. Just look at the Chinese-language signs and wine gift packs at Sydney Duty Free”.
China is now the fourth biggest source of foreign tourists to South Africa, according to Bradley Brouwer, South African Tourism regional manager for Asia Pacific. In 2012, over 130 000 Chinese travellers visited the country, a growth of over 50% on 2011. Numbers are expected to rise significantly after Chinese President Xi Jinping and President Jacob Zuma jointly declared this year the “Year of South Africa” in China, at the 2013 BRICS summit.
In addition to Cape Town-Cape Winelands, the other members of the Global Wine Capital network are Mainz-Rheinhessen (Germany), Bilbao-Rioja (Spain), Bordeaux (France), Florence (Italy), Porto (Portugal), San Francisco-Napa (United States), Mendoza (Argentina), Christchurch –South Island (New Zealand) and, the newest member, Valparaiso-Casablanca (Chile).
Joseph was in South Africa on behalf of The Wine Show. His interactive Wine Marketing Toolkit will be published later this year.
Entries and conditions for the 2015 Great Wine Capitals Best Of Wine Tourism Awards can be accessed on http://greatwinecapitals.com/best-of?filter_region=3&year_won%5Bvalue%5D%5Byear%5D=2014
Entry is free and the closing date for submissions is July 11, 2014.