Monthly Archives: May 2007

The Stormhoek Guide to Wine Blogging

In three years Stormhoek have achieved a massive marketing presence that other wineries can only dream about. But what is the secret of their success? Can their success be replicated?

Stormhoek start by doing the blogging basics right - understanding their audience and marketing effectively by listening to their customers, so that they can continuously improve and fine tune their marketing campaigns. In other words they understand that the internet works best as a two-way mass communication environment.

Stormhoek have put together a list of 19 pointers that worked for them. Read it and learn. Click on the link and download the pdf: http://www.gapingvoid.com/stormhoekinsert324.pdf

By Mike Carter.

Chasing the Butterfly

Chamarré (pronounced sha-ma-ray) is a fantastic example of French wine using creative marketing and trying, if a little belatedly, to compete with the cute-label-critter wines of the world. It’s a great look at how one group of vintners is trying to combat the Yellow Tail Effect. The vintners represent every major winemaking area in France. Their grapes are drawn together by Renaud Rosari, winemaker for  Chamarré.

Chamarreyellow_2 Chamarré is targeted for the wine drinker who wants an inexpensive but quality wine – from France. Their logo and labels all effectively use a butterfly. I recently learned that all logos should have a deeper meaning. I suspect the butterfly is a representative of the changing world of French wines and rising up, full of color, to take on the challengers. That’s just a creative guess though. Don’t quote me on it. Chamarré means bursting with color, bursting with flavor, in French.

Pascal Renaudat, Chairman of the company behind the wine, OVS, says the difficulties faced by the wine industry in France are not the fault of the government, powerful retailers or competition from brazen “New World” wine makers in countries such as Australia. “It is too easy to say that it is fault of others.”

Instead, Mr. Renaudat says France has not worked hard enough to discover what modern consumers want from wine and then embrace the latest marketing techniques to meet these expectations and, crucially, the expectations of bigger retailers. “Today France is offering something that does not correspond to demand.”

The company recently set up an office in Miami and has big plans hoping to sell a million cases, or 12 million bottles each year within five years. They also plan to spend over $10 million on advertising and other promotions over the next three years, a sizable amount  for a wine brand.

Simplicity is the watchword in Chamarré’s bottle design and labelling. Taking a leaf out of the New World’s book, many of its wines are labelled by dominant grape type rather than the place in which they are made. The butterfly logo provides visual continuity across the range. Take a look at their web site which is interactive and friendly, with good descriptions of each wine.

I find everything about Chamarré to be inviting and friendly, whether it’s the label, the web site or the tasting notes. I think they’re taking some great, and brave, steps in making French wine available, and less intimidating, to the masses. I could probably write a lot more on the various hooks this company is using and what they’re up against. I think it’s pretty cool.

Adapted from a blog post by Michelle Lentz  www.wine-girl.net

By Mike Carter.

Six Cost Saving Tips Your Packaging Suppliers Don’t Want You to Know

It’s estimated that the South African wine industry spends over R 4 billion on packaging annually. And what’s even more astonishing is that a measly 10% saving equates to an additional R 400 million bottom line profit – without even selling one extra bottle of wine. This demonstrates that the impact of packaging decisions is huge. Few companies have a grasp of the total cost impact of packaging and the opportunities that can be gained by understanding them.

Here are the six cost saving tips your packaging suppliers don’t want you to know:

Planning in advance gives you time to weigh-up options and evaluate new suppliers. It’s good practice to regularly evaluate alternate suppliers. Look for suppliers that are willing to work with you to identify cost saving options the industry is capable of delivering.

Once the development process is complete and specifications agreed 80% of the costs are embedded, leaving only 20% of the problem to work on for those in manufacturing. Thus the major opportunities for saving occur in the design stage and this is where your designer or packaging consultant should add value.

Continue looking at cost saving ideas even when you need them the least. A simple modification to your packaging specifications could lead to substantial cost savings over the long run.

Determine your production volumes annually. It’s more expensive ordering small quantities so rather order less frequently and let your suppliers carry the stock, invoicing only when it goes into production.

Unlike fine wine, inventory doesn’t improve with age. Excess inventory ties up capital and ‘hidden’ costs such as damaged, lost, redundant stock, warehousing, insurance and financing costs, all eat into the bottom line.

Insist on having a service level agreement in place. A simple way to measure your supplier performance levels is based on on-time, in-full and error-free deliveries. For example an order delivered 85% on-time, 90% in-full and 80% error free, returns an actual performance of 61.2% – clearly unacceptable. By regularly monitoring and managing your suppliers you can maximize the benefits of your sourcing strategy.

Because the wine business operates in a time sensitive and globalized environment suppliers have to be a source of competitive advantage. Build a culture of cost control into your daily operations and leverage the brainpower of your suppliers. Research shows that wine producers that pre-screen all possible suppliers are more likely to be profitable.

By Mike Carter (first published on www.wine.co.za).

Touch Of Class

Class is one of the top UK magazines aimed at the on-trade – from stylish bars, to gastro pubs, to the top hotels. They also sponsor the Class Wine Packaging Design of the Year awards.

“Distinctly Individual” was the key trend among winners of this year’s Packaging Design awards. This year the glass is thicker, labels are more subtle and the premium brands have realised that they must invest in distinctly individual and sophisticated designs if their products are to command attention on the back bar.

Class magazine awarded Stormhoek’s Siren brand Wine Packaging Design of the Year 2007. Here’s the story as told by Orbital Wines PR manager, Catherine Monahan: 

“We decided that we wanted to do something special with Stormhoek for the Independent Sector and On Trade sector. Two wines were chosen – both Estate wines.  A Sauvignon Blanc – grapes from our next door neighbour’s farm and a Pinotage – produced from a small vineyard on the Stormhoek “Hidden Valley” Estate.”

“Having built up a  very animated online community we thought it was appropriate to ask for their views and ideas as to how Siren should look.”

“Within 3 weeks we had over 250 ideas and suggestions from all around the world.  Although some were abstract, there was a common thread across most suggestions and so this allowed us to create a clear design brief for our design consultants.  One of the views reiterated time and time again, was that the wines needed to look really beautiful, elegant and stylish and that got us thinking about a link between the wine and fashion industry. Why shouldn’t wine be a thing of beauty and so Stormhoek Siren range was created with these thoughts in mind.”

The wines are now listed in some of the coolest bars and restaurants in London such as Bibendum, Pont de la Tour, Quintessentially Wines (owned by acclaimed wine journalist Matthew Jukes and Chris Orr), The Tate and more.

In this modern age, great quality wine is no longer the main point of difference. Everybody has modern vineyard practises and wine cellar techniques ensure that most people have great tasting wine, so Stormhoek wanted to add something different, and consumers seem to agree.

By Mike Carter.

What Does It Take To Be Authentic?

Authenticity constantly requires reinforcement, and it can come from a number of sources: craftsmanship, timeliness, relevance. But it is a brand’s values–the emotional connection it makes–that truly define its realism. And there are four primary strands that draw out that connection:

A sense of place. “Authenticity comes from a place we can connect with,” says Steve McCallion, creative director of Ziba, a Portland, Oregon–based design consultancy. “A place with a story.”

A strong point of view. Authenticity also emerges from “people with a deep passion for what they are doing,” says McCallion.

Serving a larger purpose. Consumers quite rightly believe, until they’re shown otherwise, that every brand is governed by an ulterior motive: to sell something. But if a brand can convincingly argue that its profit-making is only a by-product of a larger purpose, authenticity sets in.

Integrity. Authenticity comes to a brand that is what it says it is. In other words, “the story that the brand tells through its actions aligns with the story it tells through its communications,” Hardison says. “Only then will customers sense that the brand’s story is true.”

By Bill Breen.

Read the full article: www.fastcompany.com

Improving The Cellar Door Experience

According to the “Customer Experience Report” conducted by Harris Interactive and RightNow Technologies, organisations that provide a superior customer experience can gain a significant business advantage.

The research also clearly illustrates considerable consumer frustration with poor service and indicates the high cost of not providing high quality service:

Over 65% took their patronage elsewhere because of poor customer service experiences

Around 27% said they would never return, no matter what the enticement

More than 53% said they would return only if the company proved they had improved their customer service level

Nearly 50% said the company would have to prove it valued their patronage before they decide to return

All respondents voted that more than 25% of their customer experience service last year was not good

But around 78% said they would increase their custom if they perceived continuously excellent customer service!

Wine related tourism is becoming increasingly important for wineries who use the cellar door to build brand loyalty and share their story first hand with consumers. Consumers who are knowledgeable about the history of the winery form a relationship with the brand, and this can also lead to increased margins, as wine sold at the cellar door is typically sold at the full retail price, without giving up margin when sold through a distributor. 

Consumers have become far more demanding and success is no longer a matter of providing guarantees and smile training. Consumers expect quality, flexibility and value for money – right from the beginning. Quality and the development of human resources have become the most significant factors for competitive success. In real estate it’s location, location, location. In tourism it’s training, training, training.

Wineries need to be aware that the tourism industry is fiercely competitive and is not an “easy” or ”laid-back” industry, not requiring much in the way of strategic planning, professional management, or sensitivity to the environment and local cultures. For those that are prepared to take up the challenge, wine-related experiences can become an important generator of tourism activity.

By Mike Carter.

The Next French Revolution

Wine consumers have another alternative to the traditional cork and bottle: environmentally friendly Tetra Pak cartons.

Tetra-Prisma containers are state-of-the-art packaging that will give cork and bottle manufacturers sleepless nights. 100% recyclable, Tetra-Prisma containers reduce packaging by 90% in comparison to typical glass wine bottles. In fact, Tetra-Prisma containers have less packaging than an egg! These light weight containers weigh only 3% of the total weight, while an eggshell weighs 7% of the total weight of an egg. And think of the savings in shipping costs!

The French Rabbit Tetra Pak 1 liter container is produced by the Boisset family, which owns vineyards throughout Burgundy and has been making quality wine for two generations. The family works in close concert with many grape growers to achieve sustainable farming practices and is committed to the classic 3 R’s – reduce, re-use and recycle in every aspect of their business.

French Rabbit Tetra Pak has already won two prestigious packaging awards: Gold Medal – Functional Innovation – 2006 World Wine Championships Wine Packaging Competition, and Best New Wine Product of 2006 – Beverage Industry Magazine.

They offer Pinot Noir, Chardonnay, Cab, Merlot, and Family White and Red Reserves. Their web site pushes the environmental benefits of the product which will appeal to many wine consumers especially those who enjoy the outdoors: picnicking, backpacking, camping, in fact anywhere where glass isn’t appropriate.

www.frenchrabbit.com

By Mike Carter.

Is Good Design Good Enough?

I make a point of regularly browsing the wine department at my local supermarket. And it doesn’t look good. At first glance all the wine bottles look the same. Hundreds of brands displayed like sardines in a can, lost in a sea of packaging and marketing desperation and confusion. 

So what’s the point of spending thousands, sometimes hundreds of thousands of your marketing budget on design? Do consumers even notice? Is wine marketing different to any other product on the shelf? Should you be throwing more time and money at design? And what’s your payback or ROI on design? Do you even know?

According to industry expert Paul Scrivens the best designs don’t always win, but they win more often than not. His recently posted Did we ever remember design? discusses this very point and makes for interesting reading. Here are a few of his gems that apply equally to the wine industry:

“When it comes to design, every year is the same. You will see articles upon articles extolling the virtues of design and how companies can benefit by putting more emphasis behind it and what happens? The same companies innovate while other companies think they can overpower the competition through features and marketshare.”

“When will every company begin to realize that if you are going to compete at least make design one of the categories you trump the competition in? You might not be able to compete on the size of your audience reach. You might not be able to compete when it comes to how many zeroes are in the bank account. However, losing because your design is not as good as the competition means your chances of success are slim to none.”

“We live in a world where so many things are grabbing for our attention that we do not have the time to sort through all the mess. We do not have the time to waste on ugly. We want to have pleasant experiences with everything that we use and that all begins with the design of things.”

In many products design plays an important part in the consumers overall experience. Take Apple for example. So perhaps the answer is to see design as one of the more important parts of the marketing mix. Or maybe raise the bar by taking your product design from mediocre to excellent. Certainly a better and potentially more rewarding strategy than trying to compete on price alone.

By Mike Carter.

Celebrating The Magic Of Ballet And Wine

Ormonde Private Cellar is situated just outside Darling and they recently launched a new brand designed especially for the American market. The label is distinctive as it breaks away from the  overused animal theme trend commonly used for South African wines exported internationally.

The wine Ondine, celebrates the life of the legendary Dame Margot Fonteyn considered the greatest ballerina of her time. She was the star of the Royal Ballet and inspiration for many of Sir Frederick Ashton’s ballets including Ondine, created in 1958. The story derives from Friedrich de la Motte Fouqué’s tale of a water-nymph who marries a mortal and the whole of the ballet is filled with images of waterfalls, sea and streams where Ondine makes her first appearance from a fountain. This inspired the creation of the logo representing the fountain and abundant water world.

According to Eduard Haumann from Haumann Smal Design Studio, Fonteyn’s magic fluid grace and mystique particularly contributed to the flowing text used for the brand name whilst Silver foil was used in the logo to add quality to the label and to make the water/fountain connection.  

“The one important thing I have learned over the years is the difference between taking one’s work seriously and taking one’s self seriously. The first is imperative and the second is disastrous.” – Dame Margot Fonteyn.

 By Mike Carter.

Waiting Is Not A Strategy!

Few will dispute the uncertainty of investing in the wine industry. Patience, deep pockets, and a passion for wine are the minimum entry qualifications whilst business knowledge is welcome, although optional. Whilst cost pressures challenge wine producers to be innovative and “think out of the box”, the importance of procurement strategies has been greatly underestimated. Here are three practical “supply-side” moves that will yield quick gains for medium and small wine producers.

Exploit the power of collaboration. Don’t see your competitors as the enemy, “they want something from us”, but as potential collaborators and a resource for reducing costs. By combining assets and capabilities wineries can gain the benefits of scale that they would be unable to achieve alone. Packaging, labeling, bottling, warehousing and logistics are all areas ripe for potential savings and efficiencies. Bottling companies should take their expertise to the next level by seeing themselves as more than just labeling and bottling operations, and rather as supply chain management companies.

Operate lean and mean. Unlike fine wine, packaging inventory doesn’t improve with age. From an accounting perspective inventory is treated as an asset, but savvy companies now base their business models on the concept that inventory is a liability. Many managers are unaware of the costs of holding inventory. This includes damaged, lost and redundant stock, and don’t forget the warehousing, insurance and financing costs. Reduce your inventory and you will reduce debt and improve your cash flow. 

Reign in costs. Because the wine industry operates in a time sensitive environment suppliers now have to be a source of competitive advantage. Value is added by intense communication and information flows. Build a culture of cost control into your daily operations and leverage the brainpower of your suppliers.

For the wine industry, with cost of sales running up to 70%, it is clear that purchasing of inputs is a critical issue. In determining viability size does not have to be a determing factor and by building alliances with competitors and suppliers wine producers can jointly build a competitive advantage.

By Mike Carter.