Creativity Needed in the Wine Industry
Anecdotal evidence points to the existence of a large number of wine estates in and around Stellenbosch that are in the market. Apparently one of the main reasons for this supply, and it is not only in the region of Stellenbosch, is the lack of business performance.
In talks with some of the experts of the South African wine industry, and also based upon a cursory analysis of the industry, it appears that very little innovation is taking place in the industry. Some of the areas that do, however, exhibit a measure of creativity, are as follows:
- Creativity in the vineyards. Some estates are planting vines close to one another, and doing their utmost to ensure higher yields whilst maintaining high quality. The days of playing quality against quantity are long gone! Yet, a large number of wine estates still cling to this out-dated mode of thinking! Here we find that it is typically wine-makers that tend to support this point. One the other hand, the wine estate owners, some of whom are astute businessmen, would like to push the quantity and quality argument. But how do they argue against their guru’s in the winery!
- Creativity in the winery. Some estates are experimenting with new techniques and new blends. Others are experimenting with new bottling, using PET bottles, etc. Amongst others, we have a coffee-aroma pinotage! Some have radically cleaned up their labels and simplified their offering, as well as restructuring their wine ranges on offer. Old and tired names such as “Such and Such Reserve” have been replaced by interesting names with a story!
- Creativity with business models. A number of estates have ventured into providing restaurant services, event management, and accommodation. If you are not yet in these areas, you are not being creative when you do move into them, but are playing catch-up – a dangerous position to be in! In addition to these, others have diversified their products to not only provide wine, but other fruit products as well.
- Creativity in dealing with global challenges such as global warming and corporate social responsibility. A number of wine estates are doing well in dealing with sustainability issues such as managing scarce resources such as water, and with creating and tapping into alternative sources of energy. Others are going out of their way to deal with their carbon footprint, recognizing the importance of this issue. Then there are those who been creative in making important contributions to addressing the need for accommodation and education in society! Some of the players have also made important contributions towards safeguarding nature through setting aside land to protect indigenous plant species.
- Creativity in marketing. A number of wine estates have started to tap into social media to raise the awareness and build their brand. Twitter, Facebook, Pinterest, and Instagram are being used to put the brand out there. Other attempts include tapping into social events such as music and art festivals to create awareness.
The question that goes begging is that if wine estates are doing all of this, why is the wine industry in trouble? The reality is that far too few wine estates are being creative. Most of them are “doing more of the same!” And as Einstein states, “doing the same things and expecting different results, is the definition of insanity!”
More creativity is needed in the following areas:
- Route to market. What do the wine estates need to do to get their wines to the end customer in a way that suites the end customer, without creating channel conflict? How do you circumvent the large retailers such as Tesco, Sainsbury, Shoprite, and Pick ‘n Pay, who all have considerable channel power, without getting killed in the process?
- How do you get more people to drink wine instead of drinking beer, AFB’s and spirits? How do you get people between the age of 20 and 30 to drink wine? How do we get a much larger percentage of the growing black middle class to drink wine?
- How does the wine industry deal with issues such as poverty and an image of the exploitation of labour?
- How do we deal with the issues of global warming? Some experts are worried about the areas in which we would need to plant future vineyards. Will the Western Cape still be the site for vineyards 30 to 50 years from now? What do we need to do with this?
- How do we brand South African wines abroad in the face of strong competition from wineries in the USA and Chile, to name but two countries? How do we position ourselves as a great source of high quality wine that is also good value for money?
It is also important to not only focus on incremental innovation, or even strategic innovation. The real successful wineries would be those that come up with forms of disruptive innovation, where the competitors are made irrelevant by means of truly out-of-the-box moves!
This is by no means a complete list of the challenges the South African wine industry faces. We do need, however, to be creative in our approach towards solving these and other problems we face. More of the same just doesn’t cut it anymore!
(This article has also been publised on the Somersault website: http://thesomersault.com/creativity-needed-in-the-wine-industry/.)