Marthélize Tredoux: What SA wine needs to do to crack the American market
By Marthelize Tredoux, 26 May 2016
There has been some introspection in recent opinion pieces on this site around South African wine in international markets – both on how the world sees us as well as our actual performance (see here and here). Nutshell version: our wines are consistently getting great recognition from international critics (Tim Atkin, Neal Martin, Jancis Robinson etc.), yet our exports are not as strong as all this positive sentiment would lead you to think, especially not in the USA.
It’s a conundrum we keep revisiting – surely if our wines are excellent, people should be buying them? We know it’s not that simple, of course, but we get mired in the simplistic rhetoric of the argument: We strive to gain the approval and commendation of the world’s foremost wine critics. We succeed in this (regularly, and with an impressively varied number of wines/producers) but this is no magic fix for an anemic international sales performance. Does the wine drinking public not heed the proclamations of these revered commentators?
I am not discounting the importance of wine scores in the context of sales. A recent study looked at what influences a customer’s willingness to pay for wine and higher scores correlated to higher prices, which is encouraging for us since we’re also embroiled in a struggle with pricing our wines correctly in overseas markets. However, a 90+ rating for this or that wine evidently does not lead directly to world domination…
So how do we crack the USA? Well, if I had the answer, I’d be selling it to wineries and raking in the royalties. I have a few ideas to share, though.
We are definitely circling the right ideas in our regular discourse. I’m just not convinced that the implementation is sufficient or currently very effective. Nevertheless, here is my idea of a “get well” plan for sales in the US of A:
- Take a look around to learn from the mistakes of others. Look at the example of Australian wines in the USA around the 1990s: their wines (specifically Shiraz) saw a surge in sales by establishing a strong reputation of good quality. A number of wineries then jumped on the gravy train and basically flooded the market with low quality wines at inflated prices in an attempt to make some quick profit. Predictably, it all came crashing down. Considering the export power of our bulk brands, we have to be careful to separate the bottom/bulk tier from the middle tier, which is the one we really shine in in terms of bang for buck.
- I’ve said it before and I will say it again: We need to get our own house in order first. Our industry as a whole will benefit from taking a good hard look at how we manage things from the tasting room level up through to management and exports. Efficiency isn’t a bad word and there is always room for improvement on both customer- and third-party facing side, since this often directly relates to brand perception.
- That brings me neatly to my third point: our brand is nearly non-existent in the USA. And I think we underestimate the size of the challenge to change that. It really isn’t much of an exaggeration to joke about the average American considering Africa as a single country – they don’t have a reason to be aware of our existence, much less our geographic location. The same study that correlated wine ratings with price also uncovered that recognition of wine region was another strong influencer in willingness to pay. They won’t pay for our wines if they don’t know where they come from.
I could go on – and I am sure, dear reader, that I will harangue you about this again before long – but for now I think we all need to agree that a concerted, thorough strategy is needed; one that runs the gauntlet from our very own doorstep right through to the hands of the consumer on the other side of the world. We’ve already nailed the tricky part: we HAVE world class wines! And not merely a handful on the very top end – our mid-level offerings punch way above their weight in terms of value. The world just doesn’t know it. We are a little blip on their radar. Or rather, a small drop in a very, very large barrel. Isn’t it time we made a suitably massive splash?
- Marthélize Tredoux is the co-owner and editor at Incogvino. By day, she helps SA wineries sell their wine in the USA. She won the Veritas Young Wine Writers Competition in 2013.