The future of Small Australian Winemakers

Trends in the wine world are quite common, things falling in and out of fashion but for sometime now especially here in Australia  we have witnessed the development of a trend of ” bigness” & the creation of  mega wine brand organizations. Today 4 brands own more than 80% of all wine brands in Australia. We have at the same time witnessed  the growth of the big box liquor retailers who now represent more than 45% of all wines sold here in Australia, both of these factors have really changed the game and not so much for the better.

Mark Watson from Wine and Grapegrower commented recently  “Like it or not, retail consolidation has changed the face of the Australian wine industry forever. Its impact has been far-reaching and varied. For consumers, it has meant deals aplenty, while for many independent retailers it has completely altered their competitive environment. Significantly, it also has forced many wineries, growers and distributors to reassess their operations. Long gone are the days of independent retailers scattered liberally through the suburbs. Now large supermarket chains Coles Myer and Woolworths are estimated to account for a combined 45% of liquor sales in Australia.The retailer’s mark-up traditionally has been around 30-35% of the end selling price, and as the dominant players flex their muscles in the market place and look to maintain margins, the effect of retail price reductions is felt all the way down the supply chain. Ultimately, this leaves the others – the wineries, distributors and growers – with less financial room to move.”

However all this change whilst being seen by many a consumer as a  good thing for the their pocket is unfortunately at the same time robbing wine lovers and consumers of diversity & choice. We are seeing less and less small wineries brands & great international wines not being represented on many retailers shelves, we are seeing more and more generics. own labels and white labels (clean skins) making their way onto retailers shelves.

We are sadly seeing the death of creativity & individuality from the growth of these trends and we are now being confronted with a  ” new retail normal” which is creating a Lowest Common Denominator approach to wines. Try walking into a large liquor outlet and you will see this principle at work where everything sort of looks the same & price is the only differentiating factor between wines .

I challenge you (other than in some of the more boutique and independent wine retailers) to find something that is not mainstream & ask yourself “ why did I come here?” ( sounds like the start of  a Talking Heads song) and you will find that many of your decisions have been driven purely by price or by that wondeful rating score that you now see  in most wine brochures. ( we think that most tasting panels are not as expert as they appear but that is a whole other story)

Let me ask you when was the last time you simply stepped inside a liquor store to explore and see what new wines you could discover & try? ( you know just to spend a hour or so exploring the shelves and going ” wow” like we used too). Buying wine has become well like purchasing any other household grocery product and we all know how much we love spending our time doing that?

The fact remains that scale & size of this nature tends to kills both innovation, competition & diversity but I am heartened to continue to  meet and see many small wine producers both here locally and internationally who are taking the fight back, bucking this trend and refusing to play this game any further.

If you have ever taken the time to stop and chat with a wine maker about more than just his/her wines you will find that they are at heart both just another small business trying to make a buck & artisans who are deeply connected and passionate about their wines and their craft. Ask them a few questions like ” how come we do not see your wines outside the cellar door” or why are you not in retailer X” - trust me you will simply open up the flood gates as we found out.

You will hear tell of  the stories  about  wine distributors who lay before wine makers tales of poor sales, no consumer demand, you are too expensive, you need a second label, we need to increase our margins & there is finally too much competition out there. Simply many wine distributors are adding further pressure to  many small wine makers bottom line- mind you many have portfolios that read like a phone book & often have many competing labels and wines) so it is no wonder many small wine makers are going it alone or looking for alternative channels in which to let consumers know about their products.

I  have been involved in sales for many years so nothing should really surprise me but I did witnessed a great example of  wine selling the  other day as a wine representative was talking to one of our clients in Melbourne about  a deal to good to refuse. The conversation went  something like this  ” if you buy 3 cases of wine X, we will give you a case of wine Z and Y as a bonus” now that is the way to represent your portfolio & your brands value. Bargain basement fire sales strategies like this work all the time, however I am sure the wine maker in question would not be as excited about this his/her wine being presented & represented in such a way it is little wonder why wine has become just another commodity.

I was fortunate to be at a wine show a few weeks back that showcased some great wines from the Orange Region of New South Wales, of the 20 or so wineries represented there all  managed their own sales, marketing and distribution & refused point blank to have their products as one wine maker said to me “ lost in a sea of bottles where they simply become orphans”

I am sorry if I sound somewhat critical or biased but we as wine lovers & consumers need to be doing more to help  our small wine makers who have been treated quiet  poorly  by distributors & retailers alike and that help them take back the game- even if this comes at a cost. (  Here is an idea -No Small Wine Maker or Importer has been hurt in the production or selling of these wines, we could start our own Ethical Wine Growing Movement)

Wine makers like all small business owners struggle with where they should allocate their time and energy, a recent survey which was conducted by INC showed that “46% of all entrepreneurs had 3 or more jobs, 30% had 5 or 6 jobs and only 9% only had 1 job” (INC September 2012) and to make matters worse 43% of all owners feel more ” frazzled” than this did this time 12 months ago.

Something has to give and something has to change before the world of wine losses it colour and turns vanilla.

I learned a long time ago we cannot achieve everything we need without some help, the challenge is when to recognise when you need and from whom. For many small wine makers it is about both time and trust , I just love chatting with small wine makers and seeing where we can connect if there is a connection and most times rather than not after we get to know each other we make that connection and so starts a whole new conversation.

For many the reason that they make wine is that they love what they do and they have a deep passion for the wine industry, we should be doing everything that we can to support them, jump in the car and get out of town one of these weekends and head to Orange, Mudgeee, Canberra, Macedon Ranges or Geelong and see for yourself what is out there.

You will meet great people at the cellar door who are  both knowledgable & passionate and they really value what you say and think about their wines.

Going big might save you a buck or two but it will rob you of your experience- go on break the buying cycle and see who else is doing something creative for and with wine as there are a lot of us out there waiting to welcome you in.

Zum Wohl

Leigh

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