ONLINE WINE A SIGN OF THE TIMES? Online wine sales are not only increasing but outpacing growth of sales in the traditional retail market. The main driver is the demand from millennials or Generation Y…in other words, those aged 18 to 27. Online retailing is important in many markets because of the interest it generates from millenials. As Rabobank analyst Stephen Rannekleiv says, “it so happens that precisely this group forms an increasingly critical wine-drinking demographic.” Late last year Constellation Brands, which owns Constellation Brands New Zealand that produces labels such as Selaks, Kim Crawford, Drylands and Nobilo, announced the opening of Robert Mondavi Wines’ exclusive flagship store online. The move, Rannekleiv says, highlights the growing opportunity that online sales present to wine marketers around the world, but also reflects the rapid pace of change occurring in online platforms across different markets. Although e-commerce channels continue to gain importance for wine marketing, they face various challenges in key markets. “The rising number of e-commerce platforms increases opportunities for 50 www.foodtechnology.co.nz wine marketers, but it also increases the difficulty of truly standing out in the market. Online retailers are seeing a rapid increase in the number of competitors. To remain competitive, they’re being forced to expand their offerings of products and services,” he says. Wine marketers need to engage with online customers and integrate the brand’s social media platforms into the overall online experience. “Consumers shopping online will also be referencing the brand in either positive or negative ways on social media,” Rannekleiv says. Brand owners can use social media to be part of those conversations to build their brands, and important tools are evolving to support this process. Rannekleiv also predicts online channels will play an important part for long-term growth, but they must be managed as part of the broader brand development strategy. “While most wineries recognise the growing potential, the complexity of effectively growing online sales while minimising conflict with traditional channels can be daunting. Few wine marketers seem confident that they were making the most of this opportunity,” Rannekleiv said. WINE INDUSTRY URGED TO THINK DEEPLY ABOUT FUTURE Cooperation and alliances are not new in the New Zealand wine industry, but wineries and regions wanting to maintain their individual integrity and not be swallowed up as part of a trans-national need to consider their options carefully, a wine researcher says. Dr Paul Woodfield, a great-grandson of the Corban winemakers, says losing individuality amongst a myriad of brands would be disappointing for major players in the New Zealand wine industry, and suggests a recent strategy involving the introduction of sub-regions defined by location and terrain could be one answer to the conundrum of cooperation. The University of Auckland academic says whilst concerns over the ability of small and medium-sized wineries to market their wines and compete globally against larger New Zealand wineries remain, subsequent research has identified several elements unique to the wine industry that could help with the problem. “The wine industry has traditionally been dominated by family winegrowers who have been able to lower their overheads by getting all family members involved in building the business,” Woodfield says. “Pride in a winery’s achievements is often a reflection of the wines’ family branding and story, its process and geographical location. “But cooperation is an enabler for identifying and pursuing the major segments in a market. Through cooperation, the volume and variety of products are increased, enabling smaller wineries to compete in markets alongside their larger competitors. “In addition to the prospect of cooperation, wineries see their competitors as those of a similar size to their own. In light of the cooperation discussion, it can be reasoned that wineries would cooperate on a ‘sub-region’ basis because this would include all categories and not just similar sized wineries.” Woodfield says the strength of the New Zealand market means the number of winegrowers in this country has jumped from around 100 in the early 1990s to about 700 today…many of them heavily involving family members. The
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