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| Jam in the USA |
| 09 February 2010 by Mike Ratcliffe |
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| On a snowy, cold and generally miserable day last week, I walked into a
well known Washington DC wine store and noticed a new facing on the
shelf.
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The 'Jam Jar' is a marketing creation of Andre Shearer's Cape Classics, the respected wine marketers that have been part of the team working tirelessly to put South Africa on the map in the USA. The 'Jam Jar' is a 'sweet Shiraz' in beautiful jam-jar-style packaging and selling below $10 which is the sweet spot (pun intended) for the volume wine market in the USA. I spent an hour presenting an in-depth tasting of my wines to the store owner who was intrigued by everything vinous, and particularly interested in the South African story. "Although I don't like the wine, I stock it because it sells really well" was the answer to my prodding question about the Jam Jar's seeming intrusion into his collection of celebrated terroir-driven wines. How should we interpret that?
The South African wine industry has been pretty unsuccessful in penetrating the USA - the biggest wine market in the world. There are many reasons for this including a lack of political will, a sluggish DTI still convinced that South Africa should focus on the BRIC (Brazil, Russia, India & China) countries, a WOSA board that until recently has lacked the commitment and perhaps most importantly, a lack of funds for generic export marketing. The South African category barely exists despite the fact that the US potential continues to grow. On May 11th this year WOSA will launch its most ambitious US marketing and public relations exercise and it is going to be interesting to see what kind of support it receives from both the producers and the US media and trade. If managed correctly, this event could be just the tonic to rejuvenate and revive our struggling efforts. It is no coincidence that the event happens less than a month before the kick-off of the biggest sporting event of the year in South Africa. This double-whammy has potential to give South Africa momentum in the USA - and the industry should be in New York driving it hard.
The USA is a commodity market driven by marketing and in this sense a strong and innovative marketing bias is going to be the perfect tool within the framework of raw capitalism. At the same time it is imperative that we take care of brand South Africa to ensure that our fragile (but currently glowing) reputation is maintained and managed. Perhaps it would be appropriate to refer to 'Australia 101'; the 'Yellow-tail' and 'Little Penguin' lessons. This is an Aussie case study in which an unintended (probably) move away from solid generic marketing of their tangible attributes to a new reality based on the commoditisation of Australian brand equity has caused considerable pain down-under. South African producers in general and WOSA in particular are adept at positioning South Africa correctly and have been doing a pretty good job in Europe and the UK for years. There is nothing to suggest that the measured approach that has worked in other markets should not be followed in the USA too, with the knowledge that a meaningful image takes years to craft and requires sustainable efforts and funding.
This brings me back to the question of coffee, chocolate, jam and other flavours that are popping up in South African wine brands. Is the development of this 'flavoured' category the 'silver bullet' that we need to sell ship-loads of wine to Wal-Mart & Costco or is it the bastardisation of South Africa's carefully manicured efforts at positioning. Ultimately we walk a fine line between an individualistic 'whatever sells' ethos and a 'for the greater good' generic marketing philosophy.
I believe that South Africa's significantly improved marketing capabilities should be celebrated. We are no longer the 'also rans' in the creation of effective wine marketing strategies and this is being recognised by the trade and the media. The creation of new categories of wine and the rationale behind them should also be celebrated. I personally love these developments and have no doubt that they will effectively lower barriers to entry and increase the size of the pie for everyone. Let us, as an industry be cogniscent of the fact that South Africa is a country that has based its success on our excellent quality to price ratio - and that this positioning does not come easy. Let's be innovative, let's be clever, dramatic even and lets embrace radical new thinking while always leaning on the fact that we cannot afford to position South African wine as a commodity.
Mike Ratcliffe is on a two week trip across Scandinavia and the Eastern seaboard of the United States. He reports back on trends and observations from the road. For more frequent updates follow Mike on TWITTER by clicking on www.twitter.com/mikeratcliffe.
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