Stark Market Realities at WineLand Seminar

The wine writer kicked the tyre of her SUV motor vehicle outside the Spier Conference Centre. “I can’t believe that woman from Pick ’n Pay said wine buyers don’t care about terroir,” she said with a sigh and tossed her hair in the cool westerly breeze blowing from the Atlantic. “It is so scary that people responsible for putting wine on the shelves know so little.”

I remained mum, inhaling the scent of burning rubber and diesel as she roared off to meet a deadline, having not had the heart to tell her that, yes, the realities of the wine trade are in large far removed from the debates, opinions and missives shared in the rarified space of the wine cognoscenti.

To me, this was the major take-out form WineLand Magazine’s yet-again excellent seminar. “Igniting Innovation” was the theme, and for those sensitive wine types not in-tune with the daily drill of doing the only thing that matters in the wine industry – selling wine – certain precious sensitivities were ignited leading to a possible explosion. Nuclear.

The fireworks came from the marketing panel, the pyro-technicians in chef being Jean Sloane, head of marketing and menu at Ocean Basket and Pick ’n Pay’s Michelle Smith who runs the wine category.

It can safely be said that these two ladies represent the feelings of the larger core of restaurateurs and retailers selling wine, the main approach being that wine is a commodity. It’s only right for being on the wine-list and the supermarket shelf is to assist the respective eatery of grocery store to turn a profit. Wine, that product we love and revere and write lofty prose-pieces about, plays a totally different role in the retail space where the bottom-line is the only thing that counts.

Those having a problem with this must remember that were it not for wine’s contribution to the businesses of grocery stores and the majority of consumer-friendly restaurants such as Ocean Basket, Spur, John Dory et al, a major amount of the wine industry’s profit would not wiped out.

So if you were at the Wineland Seminar and had never dealt with a wine buyer or the beverage manager of a restaurant, the approaches shown by Ocean Basket and Pick ’n Pay would have been sobering and unsettling and perhaps silly. But ignore them at your peril.

Take Sloane’s tough-talk at the winery-owners and marketers in the audience:  According to her, wine focuses too much on style and image and funny stuff like grape varieties and terroir when the real opportunities for growth and survival lie in the value-chain.  “Look at global innovation, the broader scope. When I look at your value-chain, there are too many mouths to feed. Consolidation in terms of shared services is needed for everyone to live in the value-chain. Even if it means you have to kill the middleman.” The same can be said for vineyard workers, tasting room assistants and wine ambassadors.

The economic challenges places like Ocean Basket face whilst trying to stay in business – aka, make profit – are not helped, she said, by the wine industry’s inability to cost itself more competitively.

The 300% mark-ups on wine bought at cost price is obviously not enough. Not to speak of the ice-bucket, promotional material and other stuff producers cough-up to complement their listings.

Smith from Pick ’n Pay interspersed her typical ball-breaker retail-buyer talk with sharp bits of humour, including some self-deprecating. Such as her unsuccessful attempts in the British retail space to crib what Bruce Jack had done with a flavoured wine at Accolade.

Her take on innovation was basically that the South Africa industry lacked new ideas in packaging and product development. And this is an arena where I predict a great deal of change in the approach to wine and a major shift in retailer offerings.

As Smith said: “Innovation includes all processes through which new ideas are generated and converted into useful products. Look at Desperados who mixed up things with beer and tequila or the successful Ginger Joe where alcoholic Ginger Beer is made with Stones Ginger wine. Start to think what you can do differently to be more successful in the retail environment. Be focused. Be clear. Be concise. Use customer and market data and current figures. Be passionate about your product, and how its fits into the retailers range.”

This kind of thing is happening – take the local wine popsicle development. And once flavoured and spirits-induced wines take hold due to potential these new products have of initiating sexy marketing campaigns, expect traditional wine lines in retailers to be hacked to pieces.

Of course, we at the Higgovale Burgundy Appreciators Society and the Commanderie de Bordeaux will laugh at this approach just as we laugh at those who dare to buy supermarket pre-cut bread instead of organic hand-rolled ciabatta.

But seeing as over 85% of the South African wine industry’s life-blood is pumped by the heart of the Pick ’n Pays, Checkers’, Spars, Ocean Baskets and Larry’s Ribshacks in Braamfontein, the reality of the commodification of wine is impossible to ignore.

Nor worth kicking a fuss – or a tyre – for.

  • Emile Joubert

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