BEVERAGES: Still Scope for Wine Growth Despite Recession
Recent Western Cape Business News
It is still possible to capitalise on opportunities in global wine markets during the current recession, according to Donald Gallow, Distell’s international director. Announcing that the company’s flagship brand Nederburg has just been listed by the major Dutch supermarket chain Albert Heijn BV, he said the new deal was consistent with Wines of South Africa’s (WOSA’s) aim of building wines sales in Holland’s premium segment.
Seven Nederburg wines, he said, would be selling for between €4,99 and €5,99 in Albert Heijn stores. The multiple grocer is the leading retailer in the Netherlands. “WOSA recently unveiled a marketing strategy designed to counter South Africa’s over-representation in Holland’s extreme value market, where wines are priced below €2, and instead grow sales in the mid-priced band, by focusing inter alia, on brand champions.”
Gallow was confident that Nederburg would find favour with the Dutch supermarket’s customers, given the brand’s long-standing heritage, its well-established prize-winning tradition and its heightened international profile emerging from the association with the 2010 FIFA World Cup.
Nederburg has been granted the official license to produce a special collection of wines in the lead up to next year’s tournament and that will be sold until the end of 2010. “Already on offer in a range of markets, these wines are being actively merchandised across the international duty-free channel, strengthening the brand’s visibility,” he said.
He believed Distell’s strategic partnership with agent, Baarsma Wine Group Holding (BWGH), newly strengthened with the inclusion of additional wine brands from his company, would further consolidate its position in Holland. BWGH is a leading player in the Dutch retail and on-consumption channels representing a range of established trademarks to over 6 000 trade customers. The organisation also sells direct to a consumer base of over 30 000.
Gallow confirmed that Distell had secured listings with the majority of the major multiple grocer chains in the UK, where Nederburg was performing well, along with Two Oceans, which had been steadily building support worldwide, given its reputation for excellence at very accessible prices.
Already very popular in Canada, its biggest market globally, Two Oceans is now escalating its profile in the US, thanks to positive reviews from Robert Parker’s Wine Advocate and other influential critics, and sells between US$8 and US$10, a price segment in which sales remain buoyant.
Distell also sells many of its wine brands across the African continent and in selected Asian markets, as well as Australia and New Zealand. The company reported a 22% year-on-year increase in total wine export volumes for the 12 months to June and should maintain a double-digit growth momentum during the present financial year, in Gallow’s view.
“In the present climate, shoppers are obviously very price-focused. Distell has followed a policy of austerity in good times and in bad, and manages a very cost-effective supply chain to over-deliver on the price/quality ratio, while protecting brand equity. This is an approach that should continue serve us well, particularly while consumers are forced to be so budget-conscious.”
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