We’re all in this together ….. yeah right

My alternative title for this blog was something along the lines of “why promoting domestic consumption of New Zealand wine will be vital for price recovery and why industry politics will ensure it doesn’t happen” ………. very catchy (not) and hence the Tui rip-off.

The big unanswered question for the wine industry is whether domestic consumers will follow NZ wines back up the price chain when the wine supply/demand equation comes back in to balance.

The imported wines that used to populate the sub $10 market before NZ wine migrated downwards are still waiting in the wings so it will not be any general shortage of cheap wine that provides the answer to future consumer behaviour in respect of NZ wine. Nor, despite the general industry view that the quality of the discounted NZ wines was so much better than the imported wines they displaced, will that automatically ensure that consumers share that view or even care, in the face of price rises.

Given that the recession and over-supply occurred simultaneously it has been impossible to accurately assess how much of the discounting has been supply driven and how much has been due to recessionary pressures on consumer spending. However, it is reasonable to state that the more that recessionary factors are the cause, then even with resolution of over-supply issues,  price increases for NZ wine in the domestic market will not be possible without a major turnaround in consumer confidence.

Based on those realities I think it would be very unwise to assume that domestic consumers will simply accept paying more for NZ wine if it is more expensive than they have been accustomed to paying over the last two years. My view is that wineries and the industry as a whole will have to re-establish the consumer proposition that under-pinned pre-discounting prices for NZ wine, if we are to return to those price points.

At the right time, wouldn’t it be a good idea for NZ Winegrowers to co-ordinate and fund a campaign to reignite New Zealanders passion for the quality (as opposed to the cheap price) of our wines? Given that NZ remains the largest market for NZ wine, and the only market for a large number of small wineries, it should be a straightforward decision to make, shouldn’t it? Not a chance, or at least not while representation on the board of NZ Winegrowers is guaranteed to be dominated by the interests of the large wine companies.

The last time the question of domestic promotion of NZ Wine arose,  around 1995 as I recall, a Buy NZ Wine campaign was proposed. The proposal was promptly squashed and replaced with the sop of an expensive and glorified trade show in Auckland. It was never stated but the inference was that the large companies vetoed the original proposal as it would involve  some of their levy contributions funding competition with their own commercial advertising and interests.

So, although promotion of NZ wine in the domestic market may be an important step in re-establishing sustainable prices for our wines, there’s not a snowball’s chance in hell that NZ Winegrowers will fund or coordinate it if the large companies put their own commercial interests ahead of the team we are all supposedly part of. If I’m proven wrong any time in the next two years I will send an apologetic bottle of wine to the CEO of each of the category 3 (large) wine companies. I will not be holding my breath.

2 Comments

  • This all makes sense and yes, we are all hoping that the NZ wine consumer will remain loyal and move with the prices as they (hopefully) increase. The trick is perhaps to work out how to get them drinking the REAL wines again and move away from all the 2nd, 3rd 4th labels that were churned out. Connection to the brand has never been more important, be it the wine brand or brand New Zealand. And when it is brand New Zealand then NZWG should be involved. I have had many a discussion with them re not being complacent about the domestic market (though some years ago) as it is vital we have a strong foundation here from which to spring into the global markets. Every NZer is a promotional vehicle for our wines – we need to talk to them/communicate with them and remind them of the authentic, excellent wines they used to buy before we as producers and they as consumers, compromised themselves and lowered the bar. Here’s to kiwis drinking great kiwi wine and telling the world!

  • We can’t change the past but we can still change the future – OK the Sauvinon glut was a stuff up and we won’t do that again – who could have forseen a global recession (a few greedy capatalists in a big country overseas!) but re Belinda’s comment “Every NZer is a promotional vehicle for our wines” Well – that’s how I feel and my long time passion for NZ wine has spilled over into my business – the media and international marketing has for too long focussed on Marlborough Savvy and you and I and many others know that Savvy is not the only variety made in NZ that can compete on the world stage – I’ve been to dozens of tastings this year and tasted 100’s of NZ wines that would stand on their own Internationally, if only they were marketed and promoted effectively. I have tasted Syrah from Hawkes bay that presented in a blind tasting in France, 4 out of the top six were NZ wines – not French. Rieslings that were as good as if not better than those from Germany. Bordeaux Bends from Waiheke that are world beaters, stunning Chardonnays that would beat the best Chablis – Pinot Noir from Otago and Martinborough and Marlborough and Waipara that should stun the world’s Burgundy lovers… So what’s wrong? Tiny wine country competing in a global market – The NZ wine industry stated in 1830, fizzled out with prohibition and lack of Govt interest and didn’t really kick off until the 70’s / 80’s so we are still in our infancy -BUT we are now in the 21st century, we are not constrained by the likes of appellation controlee, we have the technology to communicate instantly – lets use that – Social media. I spent the last few hours at the Great Wine Capitals Conference here in ChCh – tatsted MORE fab NZ wines and some from the 9 other GWCWGN wine regions. We in NZ have what it takes and we can take on the world – we just have to shout louder – HERE WE ARE WORLD – COME AND TASTE!!! I’m doing my bit with The New Zealand Wine Directory – Linking Wine Lovers around the world to New Zealand’s Wine Online… Cheers and Good night – John (JB) at http://nzwinedirectory.co.nz

    Well that’s my rant for the day – cheers to you all

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