Monday, June 8, 2009

Riding the Credit Crunch

Following a recent article in the Cape Times on how bad the times are for the wine farms, I was asked:

"Does the view in the article reflect your wine farm?"  No.  Foremost, I do not agree that visitors to the farm are trading down to buy cheaper wines.  When visitors come to the farm we sell them an experience – wine sales follow automatically and price hardly comes into it.  Being small only I, as passionate owner/winemaker, or my equally passionate Assistant Winemaker, do the cellar tours and wine tasting.  The fact that all our wines over-deliver obviously also helps. 

We have our premium range and our ‘entry level’ range.  At cellar door the sales of the Premium Range have always exceeded those of the ‘entry level’ range and this has not changed, despite our ‘entry level’ red being really good value for money (Best Value Award from WINE Magazine for three consecutive years).

We have a few very loyal small tour operators – when I say small I mean they usually only do private tours.  Their clientele is usually upmarket and interested in wine and more often than not they have wine sent back home.  The tour operators know we offer cellar tours and tastings in German, and for that sector this is an immediate winner (we offer the same in Spanish, but we don’t get may Spanish speaking tourists!).

At the moment visitor levels are down, but that’s largely a seasonal thing – this time last year was also dead.

Visitor profile to the farm is also seasonal.  From November to Easter we have a lot of foreign visitors, made up mainly from British, Germans, Americans, Swedes and Dutch (in that order).  Gauteng holidays bring visitors that are in buying mode.  It’s refreshing to see how many South African wine aficionados we get in the 28 to 35 year old range.

Non-cellar door wine sales locally come mainly from restaurants and from mail campaigns and neither of these have suffered – in fact restaurant business is up, which may partly have to do with the evolution of the brand. We have never done a lot through retail outlets as the competition there is massive and yes, cut-throat.

When it comes to international sales we have experienced the two extremes.  Sales to the US have suffered – our distributor philosophises about the sushi-to-taco syndrome.  Our premium wines sell for US$19.99, which used to be the ‘sweet spot’, now the ‘sweet spot’ is US$12 – US$15.  Europe, on the other hand, has soaked up what the US didn’t take.  Our Danish distributor reports the best season ever, and our wines are right up there – the result of joint marketing efforts with our distributor.  Holland and Germany are not very different.

In addition we have very recently received two significant orders from UK and Switzerland for the first time.  With a bit of nurturing these will develop into repeat business.

We sit with the [nice] problem that our 2007 reds are all sold out (apart from stock we put aside for restaurants), and yet we don’t want to release the 2008’s as we only bottled them very recently.

In the range we also have two wines that are for early release: the Blanc de Noir and the Rosado.  The 2009 Rosado is already sold out, and the 2009 Blanc de Noir would be sold out had we not turned down orders from our European distributors – we need to keep some here for next summer.

...and under my breath I muttered "Long may this last!"

Friday, June 5, 2009


So here I sit, having read many blogs, and I finally decide to find out what all this hype is about - blogs, Twitter, Facebook, Squidoo, LinkedIn... what can it all bring? One of my most respected wine writers, Robert Joseph, is looking at effective ways commercially exploiting one (or more) of these.  So I thought Hey, why not give it a try?  Maybe people do want to hear about what goes at a small winery.  And that's what I plan to do.  My second blog (this is my first) will be Riding the Credit Crunch.

Watch this space!