“What does a couple do when they find out they are going to have a child They think of a name. What does an entrepreneur do when starting a new company or releasing a new product He, too, thinks of a name.”
Most people in the packed audience at Spier grinned. They have been there (if not in both cases, then at least in the second case.) But to get from the name to a brand … That, Gerrie Heyneke explained, is the challenge. Between the just a name and a great brand there is a chasm that is filled with passion, inspiration, motivation, great ideas, truth, consistency and desire. Heyneke, the managing director of Young & Rubicam, was one of the key speakers at Wosa’s seminar named “Business Success for Small Wineries” which was held in June 2005. And a great many people from small, medium and not so small wineries sat with rapt attention, picking for golden nuggets that would lift their brands from the multitudes. And get them that elusive five minutes in the presence of one of those powerful retail buyers.
Heyneke calls it “the voyage of discovery” – getting from just a name to a brand. And for him, the journey starts by replacing the conventional 4 P’s of “place, price, promotion and product” with “passion, plan, perseverance and people”. He argues that everything is about people. People produce, people consume – and people populate the numbers that drive all the marketing plans…
He pointed out that there is no other brand category in the world in which as many brands compete, as that of wine. “The only other category that springs to mind is music.” He describes the wine bottle that is left on the shelf as a “social risk” and emphasises that the only winning strategy is to create a brand. So what is a brand “A brand is a promise you make to people”, but one which, according to Heyneke, requires a commitment from the soul of an organisation or a team. It is not a product or a logo, but something that is a living, growing, changing, developing identity. Heyneke quoted a study by Interbrand that claims that brands account for more than 33% of shareholder value. In the case of businesses such as McDonalds, the brand contribution to shareholder value is 71%, with Disney it is 68% and with Coca-Cola it is 51%.
Great brands, he states, are truthful and consistent; they deliver, are relevant and desirable. Does your wine brand fit the description Or is it pretentious, superficial, too glib and glamorous
“You need to understand your stakeholders first”, Heyneke warned the local wine marketers. One of his most powerful quotations during the presentation was a statement by Clem Sunter: “No one is ever again going to make a lot of money by using the same machinery to produce the same thing and selling it to the same people as everybody else”.
Differentiate your brand by telling a story that is attractive, important, trustworthy and inspirational, he advised. “The future of brands is inextricably linked to the future of business and since so many socially influential brands are in the not-for-profit sector, the future of brands is also inextricably linked to the future of society …”
Heyneke highlighted some good examples of original branding from the wine industry. These were Fairview’s Goats Do Roam, Flagstone’s The Outsider, Distell’s Graca and Peter Bayly’s Port.
“In branding, a name means business” was one of Heyneke’s concluding statements. His perspective on branding wine from an advertising agency point of view was challenging and appealing. You could sense the longing in the audience for inspiration and guidance in creating distinct personalities for the masses of wines that are flooding the shelves. Only time will tell whether Gerrie Heyneke’s personal brand left any seeds in fertile minds.
Cottage tourism industry
The most controversial speaker at Wosa’s small wineries’ seminar must have been Paul Bannister, managing director of Ignite. Not for his passion for rock ‘n roll, but for his comments about the wine industry’s tourism mentality. His earlier media statement about the “cottage mindset” of the industry caused quite a furore – which he welcomed from his position behind the microphone at Spier. Bannister, who sits on the boards of the International Marketing Council, SA Tourism and the Grahamstown National Arts Festival, has a powerful opinion when it comes to tourism and marketing, and 20 years of experience to base his perceptions on.
His view of tourism in the South African wine industry highlighted a lack of resources and information, no central co-ordination and an overall immaturity. Having raised the hairs of all the tourism authorities in the wine industry, Bannister explained that his concern is mostly on the level of the individual winery, where there is “limited entrepreneurial experience in local wine tourism and marketing”. He also regards “product focus – to the degree of obsession” a serious challenge to wine tourism.
Considering that the wine routes are the 4th most popular tourism experience in South Africa (after the Waterfront, Table Mountain and the Kruger Park), there certainly is much potential to be developed and revenue to be generated.
Answering the question: “Who is knocking on your cellar door”, Bannister quoted several Australian and Californian examples and definitions. He then proceeded to show the audience interesting correlations between top wine importing countries and main inbound tourism market sources. Strong similarities suggest that both wine and tourism deal with the same set of wallets!
He explained that tourism activities are usually initiated by pioneering tourists, who inspire some ad-hoc facilities. This is followed by a development phase, when the destination becomes mainstream and tourism becomes a recognised economic activity. In the consolidation phase, you find a mature destination that is tourist orientated – often causing conflict with local community needs. This phase is followed by a decline in tourist interests, as more exciting destinations call to be explored. The wine industry is facing a consolidation stage, which means that the industry tourism strategy needs to reinvent itself in order to ensure growth. Bannister admitted that domestic tourism needs more stimulation from national campaigns, and that South African tourism needs to be more inclusive. Bannister promotes co-operation and conservation as the two strategic elements that have the potential to drive South African wine industry into a new and dynamic phase. Other recommendations include improving signage, trading hours, service levels and incorporating much more personal contact, historic information, festivals and eating opportunities.
“It’s all about the people – the crucial role of enterprising and entrepreneurial community leaders to help give direction and create momentum whilst convincing their respective communities of the sustainable merits of wine tourism.”
How money can ruin your fun …
A “whole” business approach was the prompt for Wineprophet’s chairman, James Herrick, to take the stage. Herrick, who conducted the 2004 Cost Competitiveness Study on the South African wine industry, captured the audience at Spier with a very simple powerpoint presentation, titled: Money and How It Can Ruin Your Fun in the Wine Business. Showing all the different cost elements, financial implications and business decisions in a very simple and creative way, he managed to get a very hard message across. Not one to soften any blows, Herrick stated that wine “is an appalling business when you are totally responsible for the total investment in the total business.” Given that wine is a very capital intensive business, Herrick proceeded to explain the different types of money and the typical mistakes in “not structuring your money right”.
He highlighted the fact that the wine industry is actually more about residential and property investment, than it is about wine production. Size and the nature of the business, is therefore one of his main concerns. “The business model for a small boutique winery does not work for a medium-size winery”. Higher volumes do not by default mean higher profits.
According to Herrick, 40 000 new wine products are presented to UK retail buyers annually. No surprise that he advises South African producers to first develop clients in their own country!