MARKETING: Distell Strengthens Polish Presence
Recent Western Cape Business News
Distell’s aim to build the contribution of international business to total revenue has received a major thrust following the conclusion of a distribution agreement with Kompania Winiarska that will represent Distell’s Amarula Cream Liqueur and drive wine brands in this developing market, where year-on-year sales volumes are currently increasing in double-digit figures.
While Amarula is South Africa’s most widely distributed alcohol beverage, the company, which also produces 20 million cases of wine a year, and is the world’s 10th largest wine marketer, is simultaneously giving close attention to building its drive wine brands in emerging markets, according to international director Donald Gallow.
International business contributed 20% to total revenue for the year to June 2008, up from 18% the previous year, says Gallow, and the intention is to continue the upward trend. “Our traditional markets remain key, but at the same time we have sound expertise in trading in developing markets, gained domestically and on the African continent that we are putting to good use in areas we believe have exciting potential.”
He says that with Distell operating across the pricing continuum, it is well placed to address the Polish market with concept and heritage wine brands for entry-level, mainstream and connoisseur consumers. In addition to Amarula, the accent here will be on Two Oceans and Nederburg.
“Now more than ever, with the volatility of global markets, we believe it essential to continue our policy of trading across a broad geographic reach to mitigate risk. The new agreement gives us scope to capitalise on opportunities in this important Eastern European market.”
He says despite current global market conditions, trading for the company remains buoyant in Angola, Zambia, Mozambique, Kenya, Tanzania, Nigeria and Uganda, as well as in several Asian markets, including South Korea and Thailand. Distell also dominates the South African wine category in the Scandinavian bloc, Germany, Ireland and Canada, as well as in Brazil.
“We have a reputation for quality wines at market-related prices that comes from planning our wines in the vineyard, in the process matching viticultural and cellar practices and thus cost structures with eventual retail price points.”
While Distell sells directly to many of the multinational multiples, it also accesses retail and on-consumption channels through a network of distributors. Says Gallow: “The Kompania Winiarska distributorship extends Distell’s footprint across Europe with relationships already secured with Altia in the northern and Baltic states and Baarsma in Holland.”
Distell has the capacity to crush 54 000 tons of grapes a year in its four cellars and sources grapes and wines across a wide network to supply its wine brands. The company purchased grapes and wines to the value of over R1bn during the financial year ending June 2008.
“We have a highly sophisticated and extensive infrastructure to service markets across the world and currently trade in 97 countries,” he adds.
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