With the 2022 harvest well on its way, I’m always in awe of the excitement surrounding it, the romance of capturing the seasonal variability in a bottle, expressing the noble character of each vintage.
With the close to 270 000 individuals impacted directly and indirectly by this annual event, the importance of wine grape production and vinification can surely not be underestimated. Even more significant is the positivity of the wine industry, after what can be seen as the most impactful 2 years in history, showcasing the true resilience of all the stakeholders involved.
All while the terroir complexity unfolds it is difficult not to be aware of all the financial challenges (or opportunities) that we face at the foot of Africa. The macro-economic drivers have been unfolding at a rapid pace as the world economy recovers, a slight sigh of relief before the inflation surge sets in, however closer to the wine world it’s been even more unpredictable. Like the scarcity of raw materials forcing many to look at alternatives or the Marlborough Sauvignon blanc shortage that has New Zealand really having an introspective analysis on their other regions and wines – perhaps an indicative lesson on building a country’s success on one varietal and region, numerous industry commentators advised us on following suit with Chenin or Pinotage to increase our margins. Or perhaps the trade wars between China and Australia causing a rapid increase in demand for our produce, brand building or not, it sure is a welcome relief to capitalise on any opportunity to manage down our considerable stock level.
Closer to home a ticking timebomb of low-to-slow economic growth and record high unemployment has our consumer cash strapped, with lockdowns and prohibition amplifying the way in what wine is perceived as a category – some would say its now closer to a necessity like toilet paper than a luxury good. The demand is there, with category growth seen more in sweet and bag-in-box – but at what price?
Considering all these complexities from soil to sip, harvest commences, and a sinister reality is faced: How many of these grapes are driven by market demand and servicing a need identified by brands through predictive market insights? No doubt is given to the importance of production and quality to ensure consumer satisfaction but are we as an industry engaging enough with the ever changing needs and demands of our clients. The largest South African wine consumer survey, sponsored by Hollard Insurance, The Great Big Wine Survey, will soon be launched for the second year under the auspices of newly established Vintelligence, a Southern Skies subsidiary focusing on providing business intelligence solutions to all industry stakeholders.
Now for a second year, the close to 8 000 consumers indicated their cultivar preferences are far from met, in comparison to what vineyards are currently planted in the Winelands, you would be surprised to find the opportunities for the noble cultivars and not the mass producers. The ability to dive deep into this data set is of exceptional value on many different insights and trends, but no wine business should underestimate the value of the data capturing inside the farm gate and cellar door as a starting point.
Data fatigue is a reality faced by many and there are many solutions and service providers in the market, but I strongly suggest the low hanging fruit should be a priority, low-cost solutions with high impact insights. Start basic, make it user friendly and fun, do a daily routine that doesn’t take up valuable resources and keep you out of the vineyards and cellar. Be consumer centric and work yourself back to the vineyard, align appropriate opportunities to learn from your consumer, to engage and capture what their needs are. Shorten the supply chain and evaluate your ability to go direct-to-consumer as efficiently as possible, this is how true margin is grown and cash flow improved, with the e-commerce opportunity on our doorstep. Vintelligence will launch the CellarDirect Direct-to-Consumer report in the last quarter of 2022 to provide valuable insights in this space.
The holistic goal should be to envision what predictive insights you should access daily, to capture sales, stock and financial aspects while a solid customer relationship management program is implemented. Making sure as an industry we rise to be more predictive on future opportunity and not just react on current reality.