‘Consumers have the perception that for under three euro ($ 3.80) they can buy quality wine. That’s a huge challenge. How can brand-builders convince consumers to pay five euro when they have the perception they can buy good wine for three?’ asked Arend Heijbroek, wine sector specialist at Rabobank.

‘We are not yet at the end of the price pressure; prices will decline further,’ Heijbroek predicted. ‘Everyone is being squeezed, only the tax man is doing well,’ he added.

Ways forward turned on two main issues. First, convincing more people to pay more money for better quality wine; and secondly, listening to - and acting on - client and consumer needs.

‘We need new markets and new consumers,’ said Yves Bénard, wine director for luxury goods brand LVMH. Bénard is currently working as an expert advisor to the World Trade Organisation lobbying for the scrapping of wine trade barriers in markets such as India and Canada, and is also in the process of setting up an international wine lobby group. ‘We need to work together to protect ourselves and develop world wide wine exports,’ he said.

Concentrating on your best customers, delivering what they want, and raising prices as you raise quality is the only way to raise profit margins, said Vic Motto of Global Wine Partners, an American wine investment bank.

‘First understand your customer, then deliver at the right price - ¬most wineries are not actually doing this. But you can’t adapt to everyone, so don’t worry about the whole market; only adapt to your best customers and keep reaching out to them and improving your offering.’

Speaking from an European angle, Chris Carson of Constellation Europe agreed with Motto: ‘What the wine industry has got to do is invest in the consumer, not tanks or grapes. Find out who it is you should be selling your product to.’

Motto also advised winemakers to stop talking about hectolitres and start talking about money: ‘This business is not about volume, it is about revenue.’

Speaking of his experience developing the Golden Kaan brand in partnership with KWV in South Africa, Marian Kopp of Racke International said partnerships were vital to profitability, both to reduce costs and widen distribution networks. Kopp called the Golden Kaan/KWV partnership ‘soft consolidation’.

‘We shared costs in research, in set-up, and during the launch. Golden Kaan has subsequently sold 900 000 cases. We broke even after three years, and we now sell in 30 countries, with a 7m euro annual turnover,’ Kopp disclosed.

He stressed that research is vital. ‘One thing you cannot do in soft consolidation partnerships is trial and error. Research is needed before you launch a brand, and international networking.’

Asked about investing in South Africa, Kopp told WineNews that if he were looking for something now it would a red wine brand, with or without a production facility. ‘If it has a production facility that is good, but it doesn’t add value.’

For the official media release issued by the organisers of Wine Evolution 2007, click here.