Wineblog

At the change of the season, I always find it remarkable to see how prices of “last season’s” stock spiral down through massive sales and mark downs at clothing stores. Not being particularly bothered about fashion, I’m tempted to now do my summer shopping as we are heading towards winter!

Wine is a completely different ball game though. As a living product, if it’s past its time, it’s, well… dead. Sales of discounted bottles merchandised in half-barrels at tasting rooms are a common sight during the December holidays – and usually rid cellars of “last season’s” coppery rosés and past their time cheap and cheeries, at ridiculous prices (think Mooiberg Farmstall). But if you’ve missed the boat when the rosé was still pink – and sold for more than R12 – you’re basically just covering the cost of the bottle and the matching bright screwcap.

Getting the numbers right and predicting just how much of what should be produced, is probably one of the trickiest parts of business – especially if you’re working with a perishable product. Just like in the world of fashion, it comes down to a game of trends …

South Africa, for instance, completely missed the take off of the Pinot Gris boom – while the Yanks and Italians laughed all the way to the bank. To a lesser extent, the same happened with rosé. Having only surfed the latter part of this wave, there were countless cellars that sat with stock after big orders fell through – probably because the Brits had a gloomy summer.

Unlike with fashion, wine has a far longer and more complicated cycle. If Hárslevelü is the next big thing, you can’t plant a few hectares tomorrow and take the market by storm this Easter Weekend. Nope, it takes about six years – and by then sweet Pinotage might by a hit!

The guys that have to be more on top of trends than even wine marketers are the ones that produce the plant material. They have to source grafting material even long before the decision is taken to plant new vines – and to make it even harder, the rootstock and clone combination also becomes part of the equation.

 A day at the Hemel and Aarde farm of South Africa’s biggest vine nursery, Lelienfontein, revealed some very interesting predictions… “We do a follow-up for every vine that we sell. When you’re in the specialist field like us, you naturally have an ear on the ground,” explains vine marketer Marco Blom.

He explains that because margins on every drinking wine are becoming extremely narrow, producers can’t afford to sustain marginal blocks. A vineyard either needs to fetch prices that justify lower yields, or it needs to produce enough grapes to make a reasonable profit despite poor prices.

According to Marco, we are probably going to see a rise in Ugni Blanc plantings. Similar to Colombar, this is no-nonsense customer in the vineyard and produces impressive yields that can either be processed for light everyday white wine, or be distilled for brandy purposes. There should, however, be a good reason why this is the most widely planted variety in Cognac.

On the red side, the same applies for Ruby Cabernet: It has never wowed connoisseurs, but it delivers a remarkably structured wine, considering the yields this variety produces.

Lelienfontein marketing duo: Andre le Roux and Marco Blom

Referring to grapes that are bigger on value than on tonnage, Marco says that Pinot Noir is in great demand throughout the winelands – but especially in the Robertson area. Variation between clones should be into account here, since higher yielding clones are generally used for MCC’s and called the “Champagne clones”, while lower yielding Pinot Noir clones are more suited for the production of dry red wine.

And niche cultivars? Marco feels strongly that nothing can be written off. “We need to maintain stock of all the niche cultivars. Even less common varieties go through cycles. We always need to have stock at hand.”

With 47 cultivars and 110 clones at their Hemel and Aarde Clone Garden, Lelienfontein has got a reserve of stock and a valuable source of material for the whole industry. 

What the industry – and eventually the market – wants, however, remains the golden question. For now, I’ll celebrate the interest in Pinot Noir by drinking MCC – and buying clothes for next summer.

In the August 09 edition of WineLand, I did a story questioning the role of competition and accolade stickers on wine bottles. This followed after reports that some international importers requested wineries to remove local competition stickers from their wines – arguing that, besides certain international awards, these glitzy decorations are only confusing consumers.

The major value associated with the role of competitions and the uncertainty of the legitimacy of their outcome has since then again been questioned by two separate marketing research reports – one local and one from the US.

 An MBA project by Christiane von Armin, carried out at the University of Stellenbosch Business School (USB), shows that the notable increase in the number of South African wine competitions has watered down the impact of their awards and accolades.

According to Christiane, consumers have also become skeptical about the honesty of some wineries in using awards for marketing wines, while the competition organisers are often the ones cashing in on winemakers’ attempts to increase the prestige of their wines through accolades. The report states that “the abundance of competitions has gradually given rise to doubt, with critics increasingly questioning whether these awards carry the same weight.”

An online survey was conducted among a total of 285 South African consumers by means of a questionnaire. This revealed that variety, vintage, region, producer and packaging all play a bigger role when choosing a wine than awards. On a scale from 1 (not important) to 5 (very important), the latter only rated 2.97, with variety being the most important factor at 4.14. 

The majority of these consumers (68%) agreed that the increasing number of wine awards is confusing.

Christiane’s report boldly concludes: “Perhaps the industry should take steps to avoid a nasty hangover from overindulgence in competitions and awards – and worse marketers’ fake awards that cheapen the concept.”

To further deepen the concern surrounding the “cheap concept” of competitions, an American study by Robert Hodgson found that there is very little concordance among competitions in awarding gold medals.

This study was published in the Le Bulletin de L’OIV, the international wine organisation’s technical and research report.

In this report an analysis of over 4 000 wines entered in 13 US wine competitions, showed why winemakers often refer to competitions as “wine lotteries”. Of the 2 440 wines that entered in more than three competitions, 47 received gold medals, but 84% of these exact wines also won zilch at another competition.

This report concludes that “the probability of winning a gold medal at one competition is stochastically independent of the probability of receiving gold at another competition, indicating that winning a Gold medal is greatly influenced by chance.”     

According to Christiane, with producers being under pressure from diminishing profit margins, “it is more crucial than ever for wineries to achieve the optimal blend in their marketing mix.”

Maybe this mix, entails more effort in hand to hand sales, label (and not sticker) presentation, expanding to new markets and even new green initiatives – while being more selective when entering a competition.

And if you’re really desperate, don’t cheat by entering small batches at competitions – just enter the lotto. That’s also decided by chance!