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Marketing Experts Upbeat about Wine Export Potential

July 6, 2010

New Zealand is well-positioned to exploit opportunities emerging in a world awash with wine, according to international marketing experts attending a national conference staged by EIT Hawke’s Bay.

The line-up of internationally-recognised wine industry leaders and researchers delivered this key message to capacity audiences attending the two-day New Zealand Wine Business Symposium held on EIT’s campus in Taradale on 29-30 June.

While supply currently outstripped demand by some 20 percent, they said, there were openings for smart operators attuned to the changing marketing environment.

In his address, American marketing consultant Jon Fredrikson pointed to huge opportunities for exporting Sauvignon Blanc to the USA. With the varietal comprising just four percent of the total American wine market, there was plenty of room for growing customer preference.

A former Fulbright Scholar in economics and an MBA graduate from Columbia University, Mr Fredrikson is a recognised authority on wine industry marketing trends. He is one of the most quoted sources in write-ups about the American wine business and wrote the chapter on wine consumption trends in Jancis Robinson’s authoritative Oxford Companion to the Wines of North America.

Many New Zealand companies already had established distribution networks in the USA to take greater advantage of the potential for growth, Mr Fredrikson said, and this country was well respected as a producer of premium Sauvignon Blanc.

Wine sales in the USA were hard-hit by the economic downturn, but bottled imports had rebounded in the first quarter of this year and New Zealand, together with Argentina, had posted the largest volume gains among all exporting nations – up 57 percent.

“This was remarkable because the average value of New Zealand table wines imported was over $US66 per case, second only to France ($US77 per case) among all major exporters to the US.”

Annual retail growth of two to four percent was expected over the next five years and would favour New Zealand Sauvignon Blanc brands and to a lesser extent our Pinot Noir exporters, Mr Fredrikson said.

China’s home wine industry was growing, said economist Lawrie Stanford, but it couldn’t meet increasing local demand. Currently reds were more popular with wine drinkers, but education was a key to boosting interest in high quality New Zealand whites.

Mr Stanford, who has had 15-plus years experience as a global market analyst for the Australian Wine and Brandy Corporation, said a small high-value segment existed in China and this was expected to grow.

Founders of Australia’s largest online community Andre Eikmeier and Justin Dry stressed the potential for social media such as Twitter and Facebook to sell to a younger generation of wine drinkers.

In a witty presentation, the pair from Qwoff, Australia’s first and largest social wine review site, said 400 million people used Facebook. By building genuine relationships with those interested in wine, wineries could create in “a tribe of loyal customers”.

French wine industry consultant Isabelle Lesschaeve reinforced this point in characterising these young wine buyers. Generation Y, she said, were technically savvy, wanted instant gratification and expected information to be available wherever they were, regardless of the form that took.

Unlike their Baby Boomer parents, this generation had started drinking red wine styles and their preferences were strongly influenced by their peers, Dr Lesschaeve said.

Initiated by EIT and Hawke’s Bay Winegrowers two years ago, the biennial symposium was immediately hailed as the industry’s leading forum for informed updates on global marketing trends.