Making the premium market pay
Are New Zealand winegrowers destroying their brand?
Friday, February 26 2010 || Comment || BY Mark Revington - The Independent
Spratt, on the other hand, is founder of Destiny Bay Wines, which produces some of the most expensive wine in the country, ranging from $70 to $270 a bottle.
These days his son Sean is responsible for the wine, from grape to bottle, leaving Mike and his wife, Ann, to “concentrate on the fun things about the label”.
These include forming an alliance with four other New Zealand ultrapremium wine producers in a new marketing group called The Specialist Winegrowers of New Zealand (TSWNZ).
The other producers are No 1 Family Estate, Vinoptima, Hay Paddock and Wooing Tree Vineyards.
The thing they have in common, apart from producing expensive wines, is that each specialises in a single style or grape variety.
Destiny Bay Wines produces Bordeaux-type reds; Nick Nobilo at Vinoptima is intent on making the world’s greatest gewurztraminer, as is Chris Canning at The Hay Paddock, and likewise with Waiheke syrah, Wooing Tree with Central Otago pinot noir, and Adele and Daniel Le Brun at No 1 Family Estate with methode traditionelle.
It is a marketing alliance aimed at strength in numbers when selling wine offshore, and built on a shared singular obsession that Nobilo describes as a level of dedication that borders on the obsessive.
Spratt calls it a mild form of insanity.
And when it comes to marketing, Spratt and Chris Canning reckon most New Zealand wine producers get it wrong.
Spratt unleashed two broadsides in recent issues of New Zealand Winegrower, called “Are we destroying our brand?” and “Reinventing the New Zealand wine brand”.
It’s all about recognising that New Zealand’s wine production is just a blot on the landscape globally – less than 1% of total global production.
What worries Spratt, Canning and others is that the huge vintage of 2008 led to cost-cutting of New Zealand wine offshore and the risk that we will become, like Australia, known as a volume producer of cheap wine.
Villa Maria’s George Fistonich and others have urged more work in the vineyard to restrict the volume of grapes produced by vines per hectare. Spratt and Canning reckon we need to place more value on the wine we do produce.
“Despite producing less than 1% of the world’s wine, New Zealand wine producers believe there is a glut. They have dramatically discounted their prices, increased bulk wine sales five-fold and called for vineyards to be scrapped and compulsory caps to be placed on production, at the same time boasting that export sales have now topped the billion-dollar mark,” Chris Canning said in a statement put out by TSWNZ this year.
The wine industry has been praised for its marketing and promotional efforts, but the implication that clever marketing has led to a high-end position globally is wrong. In many markets the premium sought by NZ winemakers for Sauvignon Blanc has always been questioned - Germany, Benelux, the USA, Japan for example. Those markets have never attached a high value to our distinctive, but simple white wine hero.
Now, with excessive supply, the price position once enjoyed in valuable markets like the UK and Australia is plummeting. We have to ask ourselves: Was scarcity the driver of price - not smart marketing or a distinctive wine style?
What has always been lacking is a genuine shared vision and intelligent brand development for "Wine NZ". This has never been a priority as the primary focus was on planting and selling.
It's time to re-think what NZ wine - the brand - has to offer the world. Premium priced Sauvignon Blanc may well be a lost cause, but we have Pinot Noir to consider: both as an exceptional opportunity and as a looming supply issue. The promotional efforts of the past need to be discarded and a strong, relevant and compelling brand position developed.
Posted by Dave Nicholas - Winepartners at 16:28 on March 1, 2010
At last count there were 643 members of the New Zealand Wine Institute. Ninety percent of the members (577 in total) are small producers making less than 200,000 litres each per year. There are six large producers (less than 1% of the members) making more than 4 million litres each per year. These six members control 40% of the Board seats and along with representatives of the sixty medium producers, control 70% of the Board seats. The economic and strategic objectives of the small producers are not the same as the medium and large producers. The question has been raised whether it is reasonable to expect a single industry group to fairly represent all three categories of producers. Any efforts by the NZ Wine Institute to reposition the country's wine brand must first address the diverging interests of its members.
Posted by Mike Spratt at 09:40 on March 5, 2010
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