Smarter, faster, richer, wiser

by | Jun 3, 2016 | Business and Marketing

A healthy, adaptable and competitive wine industry is in the best interest of each of its stakeholders. And this is exactly what the Wine Industry Strategic Exercise (Wise) envisions. WANDA AUGUSTYN spoke to the driving forces behind this strategic project about the challenges, priorities and an ideal future for the wine industry.

Rico Basson – managing director, VinPro

What is VinPro’s main role in the wine industry?

VinPro is the service organisation for approximately 3 500 South African wine producers and cellars and represents them in discussions with government and on other wine industry platforms. The organisation has three focus areas, namely representation, value adding services and information transfer.

What are the biggest challenges facing you right now?

The single biggest challenge is to substantially increase the profitability of wine producers from the current average of 2% return on capital.

Other challenges include effecting successful transformation on all levels of the industry, developing talent by means of training, distributing world class research and information through expert advice, improving government cooperation significantly in order to establish a better policy environment, improving relationships with labour organisations, and helping to enhance market access and grow wine tourism.

What’s your take on Wise?

I am very positive about Wise because it provides a much-needed strategic research framework for a wide range of core priorities. The process is important to improve cooperation within the industry, but also with labour and government, to reach consensus about core priorities and to apply resources in order to reach set targets. Substantial progress has already been made – this includes the appointment of a full-time manager for a government interest group in Pretoria, the establishment of a transformation committee and the launch of a forum where representatives of the wine industry, labour and various national and local government departments can continuously liaise with each other on a wide range of priorities.

Rico Basson

 

Kurt Moore Siobhan Thompson
Yvette van der Merwe
Gerhard Martin

Name three Wise priorities.

Better market access in countries like China, the USA and Africa that is supported by trade agreements, growth of the local market and wine tourism, which both hold enormous potential; sustainable transformation within the wine value chain; and world-class research and technology development.

What excites you about the Wise process?

The process was essential to determine new strategic priorities, especially as the previous strategic exercise – Vision 2020 – was already completed more than 10 years ago. I am excited about the progress that has already been made, as well as the buy-in and new level of liaison between diverse parties the process has achieved. If Wise is successfully implemented, it will place the South African wine and brandy industry on a new growth trajectory.

What concerns you?

Change in behaviour and the creation of value. It is important that producers and businesses familiarise themselves completely with Wise, and even more importantly, also help with its implementation – this is not happening sufficiently yet.

A second aspect is behaviour. I often refer to the metaphor of an iceberg where only about 20% of the structure is visible above the water and the rest hidden. Our strategic plans like Wise are often like the wind blowing on the surface, but what we also have to contend with is the ocean currents beneath the surface, which are often stronger and prevent the iceberg from moving. These currents consist of values, fears, ideologies, attitudes, culture and habits. Successful implementation means that we have to align the current and the wind – then we’ll have an enormous opportunity to take the industry to new heights together.

Kurt Moore – CEO, Salba

What is Salba’s main role in the wine industry?

Salba is a voluntary trade association representing the interests of its members who are manufacturers and distributors of alcoholic beverages. Our membership includes wine and spirit manufacturers, but we also represent wine and spirit importers and distributors.

What are the biggest challenges facing you right now?

From a wine-industry perspective, our biggest challenge is to make the industry more profitable for the benefit of all stakeholders. From a Wise perspective that challenge translates into being able to implement the plans and strategies.

What’s your take on Wise?

Wise is a useful platform to get all stakeholders around the table so we can put our heads together to devise plans and strategies to make the wine industry more profitable and address key challenges such as transformation. However its success depends on our ability to implement the plans and strategies.

Name three Wise priorities.

To grow the local market and tourism, conduct global consumer analysis and speed up transformation.

What excites you about the Wise process?

The potential to bring about a change in the industry.

What concerns you?

The lack of willingness in the industry to embrace the body of research and to work together to implement the research findings.

Siobhan Thompson –  CEO, Wines of South Africa (Wosa)

What is Wosa’s main role in the wine industry?

Wines of South Africa is a non-profit organisation established to promote South African wines in key export markets. As a fully inclusive body comprising all the major exporters, we represent over 500 wine producers. Our business scope is to enhance the image and reputation of South African wines in key international markets. We also help with the development of new export markets and capacity building among all exporters. Another focus area is to promote the success of BEE with marketing support and advice and by facilitating the development of SA wine tourism.

What are the biggest challenges facing you right now?

Firstly a tough economic and trading environment. More than 70% of our export volumes are shipped to Europe, which is still recovering from a recession and is consequently price conscious. Africa has been badly affected by religious factions and health issues over the past few years and now the lack of forex thanks to the drop in oil prices which has impacted Angola and Nigeria, limiting the availability of US dollars to pay for imports.

Secondly we have a tough competitive climate. We’re up against well-established competitors who’ve negotiated good trade agreements, while SA has only two – with the US and Europe. These bodies also have funding support from their governments and stronger currencies and marketing funds to build their generic brands.

In the short term the devaluation of the Rand has definitely further negatively impacted activity in the focus markets.

What’s your take on Wise?

I think it’s a good collaborative way of building a wine industry strategy that can benefit all players.

Name three Wise priorities.

Marketing and promotion in conjunction with for instance SA Tourism, Brand SA and the local market and wine tariff and non-tariff barriers; economic empowerment and development; and knowledge and information development.

What excites you about the Wise process?

It’s an inclusive process built and managed by representatives from the wine industry. It has now also developed into a round-table process that includes labour and government.

What concerns you?

It needs funding support to realise the priorities and initiatives. Without funding it’s difficult to roll out some of these initiatives.

Yvette van der Merwe – Executive manager, SA Wine Industry Information & Systems (Sawis)

What is Sawis‘ main role in the wine industry?

The electronic capturing of information so we can increasingly focus on the training of clients, the integrity of the information and the expansion of our services.

What are the biggest challenges facing you right now?

To present information for the industry on our website in a more user-friendly way using a dashboard format with graphs, etc. If we use the export statistics as an example, users should be able to choose parameters like period, packaging type, country, volume and value themselves, and then choose whether it should be displayed in a table or graph. Users should also be able to specify their own information. The dashboard can be expanded even further to connect different systems to each other. The options are endless!

We want to increasingly focus on local and international market information and communicate this information to the industry in a timely and structured way to enable stakeholders to package events and trends with a focus on the implications for their interest groups.

What’s your take on Wise?

Wise has built on Vision 2020 and Foresight and allowed these initiatives to take practical effect. The industry, including service delivery entities, must move forward. Wise makes various resources available to the industry to achieve this and simultaneously gives direction to the service delivery entities.

Name three Wise priorities.

We have to build on our relationship with government in order to assist the industry in trade matters. It is concerning to see what other countries’ wine industries have achieved in conjunction with their respective governments with regard to trade agreements.

Another prerequisite for the industry is to get transformation in place. And we will have to increasingly promote trade to grow our value.

What excites you about the Wise process?

Wise has followed a practical, participative procedure that has continuously unified the same representatives of the respective industry stakeholders around the table. It is easy to devise plans and strategies and then leave the implementation up to other entities. But it does create room for different interpretations and a lack of buy-in. This hasn’t been the case thus far, however. It is exciting to be a part of Wise and to be able to make a positive contribution.

What concerns you?

It is still in the hands of the industry stakeholders to, inter alia, use the information and resources that have been made available in their strategic planning. The concern then still remains that certain segments will not use Wise to take their businesses forward.

Gerard Martin – Executive manager, Winetech

What is Winetech‘s main role in the wine industry?

To provide the SA wine industry with a sustainable base of leading edge technology , innovation and knowledge of viticulture and oenology so that the industry can remain competitive internationally and locally.

What are the biggest challenges facing you right now?

The speed of innovation and technology on a global scale is rapidly changing the rules of the game. It forces Winetech to ensure that the research it funds, is relevant and adds value for the industry.

We do not have enough scientists in various specialist fields. We therefore have to ensure that local and international researchers work together effectively to establish networks in order to find solutions for complex problems.

We also have to ensure that there is effective cooperation between industry stakeholders and researchers – these parties have drifted too far apart. We must also see to it that technology and new knowledge are transferred effectively so that everyone in the industry is equipped to make informed decisions that will benefit their business.

What’s your take on Wise?

I am very positive about Wise as it follows an integrated approach where various industry organisations work together to ensure that the industry will remain sustainable and competitive over time. The challenges are big and the SA wine industry is a small player in the global wine world, but the contribution we make to SA’s GDP and job opportunities, compels us to work together and toward a common direction.

Name three Wise priorities.

To create an environment of cooperation in the industry that supports focussed research, development and innovation; to enlarge the pool of research sources and to institute focussed actions to effect transformation on a bigger scale and faster, to create platforms where information like research findings can be transferred to stakeholders in the wine industry in an effective and cost-efficient way.

What excites you about the Wise process?

The fact that we realise that we have to work together as a team. Winetech also realises that we need knowledge and information on all levels to help make our research relevant and focussed on providing solutions that will benefit the industry.

What concerns you?

Implementation. We have good plans, but without effective implementation we won’t be able to win. We must set realistic targets and each stakeholder has to ensure that these are met.

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