WINE: Distell's Cup More Than Half Full
Recent Western Cape Business News
Distell’s fast-rising wine exports, propelled by the company’s drive brands across the premium and super-premium spectrum, are set to receive a further boost with the launch of a new value label in the UK and the strengthening of ties with two major retailers, said international director Donald Gallow,
The new range, Danger Point, is being listed by UK retail chain Threshers, which has over 1 000 outlets nationwide. Forming part of the highly popular Two Oceans brand, the entry-level tier is targeted at budget-conscious Britons feeling the economic pinch, with all three varietal wines in the range retailing for below £5 a 750ml bottle. Gallow said the new offering has been priced to perform in the value segment “to allow consumers with diminished disposable income to still enjoy their everyday glass of wine”.
At the same time, the company is increasing its business with Waitrose in the UK.
Gallow said the latest deals had been landed on the back of Distell’s impressive increase in packaged wine exports, achieved with such brands as Two Oceans, Nederburg, Drostdy-Hof, Obikwa, Zonnebloem and Durbanville Hills. Although declining to give details of sales increases, he confirmed that they comfortably outpaced the climb in the South African industry’s packaged wine sales volumes off-shore. According to the latest available statistics from SA Wine Information Systems the country’s packaged wine exports for the six months to November 2008, increased by 21,8% compared with the same period in 2007.
Distell, which trades on every continent with a portfolio of wine brands across the price spectrum, believes it is possible for the company to participate at the value end of the market on a profitable basis given the economies of scale. Its portfolio accounts for 36% of the country’s total still and sparkling wine production.
“Although the value segment does not represent the major thrust of our wine business, we believe it to be an appropriate focus in the current downturn,” said Gallow. “Nevertheless, we are optimistic of growth across all our price points and are encouraged by the positive projections for global wine consumption issued earlier this month by the International Wine and Spirit Record, which predicts that the financial and economic crisis affecting many wine-consuming countries worldwide will have ‘limited’ consequences for the growth of the wine sector.”
The International Wine and Spirit Record’s report, released in Paris in mid-January, has forecast a 6% rise in global consumption between 2008 and 2012, to reach 2,8 billion nine-litre cases a year.
While Europe, Africa and Latin America are delivering double-digit growth in wine export volumes for Distell, Asia Pacific has assumed even greater significance for the company and currently accounts for bigger volumes than North America.
“Our policy is to minimise our potential vulnerability to any one specific market by trading across a broad geographic front. This long-established approach is proving particularly effective in the present trading environment. It has allowed us to capitalise on new growth opportunities and given us the flexibility to simultaneously access hitherto unexplored potential in existing markets.”
Business News Sector Tags:
Fax 2 Email
Study IT Online
Work from Home