Greg Sherwood MW: Branding is key to succeeding in the international wine market
By Greg Sherwood, 15 November 2023
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Being involved in the UK wine trade on multiple levels allows me to encounter all number of successes and failures in decision making among wine producers, importers, distributors, retailers and fine wine merchants. I am privileged to be able to wear so many different hats all at once, but then again, few everyday fine wine merchants have had the good fortune to work internationally for investment companies, have traded commodities across multiple continents, and been able to apply the knowledge of multiple degrees from Business Management and Economics to a Master of Wine to their day-to-day work life.
I, for one, would certainly not deny that I have been given opportunities that I fear increasingly few others that follow in my footsteps will get as we move into a much more inward-looking world where volatility and insecurity rules the day, and where international travel is increasingly looked down upon, and often positively discouraged by the powers that be in the name of some kind of greater global responsibility. We seem to be entering a new era of counter-globalisation, where growing isolationism is once again viewed as a protective shield as opposed to a self-limiting vice. In this new world, just how are businesses, and I am thinking wineries in particular, supposed to build their brands internationally when encountering all these new and unexpected headwinds?
I am not sure if it’s just the current stagnant and sticky market environment we all currently find ourselves in or if it is a greater business community restlessness, but every day I am encountering more and more wineries, from all over the world, who are patently unsatisfied with the current status quo, with their current importers, agents or distributors. A couple of elements always stand out for me when I pluck up the mental willpower to drill deeper and analyse some of the reasons for producers’ dissatisfaction. First and foremost, it is surely the greatest challenge faced by all wine businesses: Routes and access to markets, and the shrinking number of viable channels into these markets for many producers’ products. The second and increasingly significant challenge is the general lack of brand building that wineries, individually or in tandem with their agents and distributors, are engaging in to build an identity for their products in a highly competitive and overtraded marketplace like the UK or EU.
While the question of diminishing routes to market is certainly a subject worthy of its own in-depth focus, for the time being I want to focus on the latter aspect of simply building a brand, a critical element in indicating how a winery not only positions itself but also establishing what elements set it apart from all the competition in a specific market. Acknowledging that essentially, a wine brand represents a liquid promise that a winery offers to their consumer, indicates why branding is such an essential and important tool for a wine business if it wants to make a name for itself and its products, forging a coherent company identity for a successful long-term consumer relationship.
With so much emphasis on the fundamentals of building a brand, I have recently attempted to go back to basics to try and identify some of the essential building blocks that some wineries might be missing or simply getting wrong in their general consumer messaging. I have hit the textbooks and tried to salvage some of the important lessons modern wine businesses of varying sizes can re-examine when considering their brand building activities in various markets around the world.
For many of the fine wine brands I deal with in the UK on a daily basis, one of the most important fundamentals is authenticity, supported by delivering on the quality promise. In the current overtraded wine marketplace, having a high-quality individual wine that really delivers, or as I prefer, over-delivers, is one of the most important foundation blocks for a strong brand, especially in a time of rising cost centres which makes it all too easy for producers to take their eye off the ball and cut corners, thus compromising on their wine’s quality and authenticity. In the Cape, businesses are all too aware of dry goods scarcity and cost inflation, loadshedding and related soaring fuel expenses. But if a winery compromises on its wine quality, they in turn compromise the whole essence of their wider brand.
Another of my favourite fundamentals of successful brand building is the question of building loyalty and commitment to one’s winery or wine brands. If a winery can build a faithful, committed following with an increasingly obligated consumer through honesty combined with quality and authenticity, loyalty should be forthcoming. Consumer trust over time transforms into loyalty and delivering on your quality promise will earn you the consumers’ trust. It all kind of starts to sound like some kind of virtuous circle, and in essence, looking at and focusing on core values helps complete the circle. For authentic wineries, branding is not simply a marketing exercise. Effective, successful wine brands are lived, embraced and incorporated into consumers’ everyday lifestyles ensuring, in most instances, repeat purchasing.
Brand building, like wine itself, is an art which starts with strong, coherent messaging to create an authentic story that can be shared consistently by the winery, but then also later by committed, loyal consumers themselves. Of course, identifying your target market audience correctly and then creating strategic cues that will appeal to them is fundamental to successful product brand building, thus making a customer-first approach so essential if a winery is going to change and evolve with modern consumer behaviour and consumption patterns. But ultimately, in an age of cutthroat competition, the only sure thing that can make a brand stay relevant is impeccable individual wine quality.
- Greg Sherwood was born in Pretoria, South Africa, and as the son of a career diplomat, spent his first 21 years traveling the globe with his parents. With a Business Management and Marketing degree from Webster University, St. Louis, Missouri, USA, Sherwood began his working career as a commodity trader. In 2000, he decided to make more of a long-held interest in wine taking a position at Handford Wines in South Kensington, London, working his way up to the position of Senior Wine Buyer. Earlier this year, he moved across to South African specialist merchant Museum Wines to become the Fine Wine Director. He qualified as a Master of Wine in 2007.
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Mike Carter | 17 November 2023
Greg, you raise some thoughtful points, but let’s take a realistic look at branding for most wine businesses. Building an international brand is an enormously expensive endeavour, out of reach for the vast majority of producers. It takes much more than just attractive labels.
Distribution poses monumental barriers to entry into this industry. It’s only natural for a winery to be unhappy with lackluster sales performance from agents. But it’s rarely so black-and-white. More often than not, it’s a combination of insufficient marketing support and ineffective brand messaging to consumers. My advice – always look inward before casting blame outward.
In my experience, the future of most wine businesses lies in wine tourism. Global wine volume demand is stagnant, while tourism grows exponentially—wine tourism in particular. Young generations may not care much for wine itself, with endless alcohol options available. But experiences are what they crave. And wine tourism represents the ultimate blend of lifestyle leisure and hands-on entertainment.
Selling your own wines at full price in your own tasting room and controlling the entire experience is a no-brainer. For most wineries, especially small to mid-size, on-site direct sales through wine tourism provide the clearest path to profitability and sustainability.
Distribution partners and export dreams make sense on paper. But the hard financial truth is that fully leveraging your own backyard, literally, is the wisest strategy. Tasting room sales achieve the highest margins by far. Successful brands begin at home.
Greg Sherwood | 17 November 2023
Wow, some great points. Let me reply like this…
Greg, you raise some thoughtful points, but let’s take a realistic look at branding for most wine businesses. Building an international brand is an enormously expensive endeavour, out of reach for the vast majority of producers. It takes much more than just attractive labels.
– I AGREE AND DISAGREE. BUILDING AN INTERNATIONAL BRAND NOWADAYS DOES NOT NEED TO BE EXPENSIVE THOUGH WILL REQUIRE SOME EXPENDITURE AND A BIT OF TRAVEL. WITH SOCIAL MEDIA ROUTES, SMALLER TASTING COMPETITIONS, WINE INFLUENCERS, GROUPED SMALL PRODUCER TASTINGS, BIG IN ROADS CAN BE MADE.
Distribution poses monumental barriers to entry into this industry. It’s only natural for a winery to be unhappy with lackluster sales performance from agents. But it’s rarely so black-and-white. More often than not, it’s a combination of insufficient marketing support and ineffective brand messaging to consumers. My advice – always look inward before casting blame outward.
AGREE TOTALLY. WHEN EVER A PRODUCER COMES TO ME, AND ITS VERY OFTEN, AND ASKS FOR MY ADVICE ABOUT MAYBE MOVING TO ANOTHER AGENT, I ALWAYS ASK THEM HAVE THEY EXHAUSTED ALL MARKETING ROUTES, HAVE THEY VISITED CURRENT CLIENTS WITH THEIR AGENT, HAVE THEY POUNDED THE PAVEMENTS, HAVE THEY PUT THE EFFORT (THAT THEY EXPECT FROM THEIR AGENTS) IN AS WELL? MOVING AGENTS IS EXPENSIVE AND EVEN IF YOU MOVE TO A NEW, BETTER CHANNEL, CAN SET YOUR SALES, MARKETING AND BRANDING BACK YEARS!
In my experience, the future of most wine businesses lies in wine tourism. Global wine volume demand is stagnant, while tourism grows exponentially—wine tourism in particular. Young generations may not care much for wine itself, with endless alcohol options available. But experiences are what they crave. And wine tourism represents the ultimate blend of lifestyle leisure and hands-on entertainment.
YES, ANOTHER GREAT POINT. BUT THE TOURISM ANGLE FALLS UNDER MY BUILDING TRUST AND LOYALTY SECTION, AS IF YOU GIVE A TOURIST A GREAT EXPERIENCE AT YOUR FARM OR TASTING ROOM, THEY WILL REMEMBER YOU AND SURELY BUY YOUR PRODUCT AGAIN IF AVAILABLE OVERSEAS, IF FOR NO OTHER REASON BUT TO TELL THEIR FRIENDS, WHILE SHARING THE WINE, WHAT A GREAT TIME THEY HAD IN CAPE TOWN AT XYZ WINERY. BUILDING TRUST CAN TURN INTO LOYALTY.
Selling your own wines at full price in your own tasting room and controlling the entire experience is a no-brainer. For most wineries, especially small to mid-size, on-site direct sales through wine tourism provide the clearest path to profitability and sustainability.
A LOT OF YOUNG GUNS OBVIOUSLY DON’T HAVE FANCY WINERIES OR EVEN PLACES TOURISTS CAN VISIT TO TASTE. SO IT DOES SOMETIMES PRESENT A CHALLENGE TO CONNECT WITH NEW POTENTIAL CONSUMERS THROUGH THE TOURISM CHANNEL. BUT IF YOU DO HAVE TASTING FACILITIES, I WOULD RECOMMEND LEVERAGING THEM TO THE MAX AND SELLING AS MUCH THROUGH MAILING LISTS AND PRIVATE DATABASES AS POSSIBLE. THE AMERICANS DO THIS VERY WELL WHICH IS WHY THEY DON’T HAVE MUCH PRESURE TO EXPORT. IT’S MORE FOR EGO AND EXPOSURE.
Distribution partners and export dreams make sense on paper. But the hard financial truth is that fully leveraging your own backyard, literally, is the wisest strategy. Tasting room sales achieve the highest margins by far. Successful brands begin at home.
AGAIN, GREAT POINT. LEVERAGE WHAT YOU HAVE ALREADY BEFORE GOING OUT THERE TO TRY AND REINVENT THE WHEEL. IT OFTEN COMES UP WHEN WE TALK ABOUT BRANDS ENTERING COMPETITIONS… WHICH NOWADAYS COSTS A FORTUNE. WINERIES PAY AND ENTER, THEN SUDDENLY THEY WIN A GOLD MEDAL… AND THATS THE END OF IT. THEY DO ABSOLUTELY NOTHING WITH THE AWARD. MADNESS. THAT’S MERELY THE BEGINNING OF THE HARD WORK, NOT THE END!! SEEMS OBVIOUS BUT YOU WOULD NOT BELIEVE HOW MANY WINERIES DO NOTHING WITH A DECANTER GOLD OR AN IWC GOLD ETC. EVEN IF THE SAID WINE IS SOLD OUT, SO WHAT, USE IT TO PROMOTE THE NEXT VINTAGE!
PK | 18 November 2023
Mike,
Some really great insight into local marketing and brand building in South Africa. As my granny always use to say, ‘make sure everything at home is nice and tidy, before you plan on going on a trip’. Which kind of makes sense in so many ways, as following the path of least resistance or going down the road with fewer obstacles surely make sense and a market in your back garden surely trumps all the unknowns of the international market. But there’s also obvious limits to that and at some point the business model has to evolve and you have to look beyond the nest.
Tourists come taste and pay good money for your wines at cellar door, enjoys the experience and may tell their friends to come or come back themselves again in a couple of years, but surely you need those return customers and/or clients physically buying bottles and cases of your wines for it all to make sense in the long run. When those tourists leave and go back to their countries the where, how and with who your wines are internationally starts playing a more and more important role. If you only focus on capturing that picture perfect moment in the Cape Winelands, where the client sits in your tasting room but once he or she leaves, there is no more business as you are relying on the client running into your wines again by chance somewhere in the big bad wine world out there. You are missing a trick maybe???
Yes marketing and brand building can be expensive, but getting on the books with the right importer and merchants in important markets internationally surely trumps that, no? When the client leaves your tasting room knowing exactly who distributes your wines in their markets and where they can get your wines, surely that is going full circle and adds to any kind of margins and revenue at the end of the day.
Yes some of the bigger wineries have marketing budgets and some of the smaller guys/girls don’t even know what that means and or the column doesn’t even exist on their spreadsheets. But I also think the idea of marketing and brand building can sometimes be made far more complex than it actually is and should be. This is where I come back to my first comments, doing some homework and getting aligned with the right importer/distributor is so important and whether you have the budget or not, if you want to grow your business into a sustainable one, I think leaving the nest has to be in the future plans and international markets has to be on your radar and part of your business plan.
I think if we ask the likes of Lukas van Loggerenberg, Franco Lourens, Pieter Walser, Marelise Niemann, John Seccombe, Duncan Savage, Craig Wessels (the list can go on and on), their wines have a great following in SA and tourism does it’s fair share for them, but partnering up with the right people in international markets has taken their brands to the next level, without having to take out a second mortgage in order to achieve recognition and a following.
I had the privilege of smousing some wine for Cathy and Paul at the Wine Village in Hermanus during 2021 when the tourism kind of came back online again after Covid and what I found interesting was tasting wines with some if the international clients and after we’ve hooked them on the in-store purchase, the conversation went further. Starting talking about where they are from lead to taking the old smart phone out and finding where the wine in their glass were in their local market ended up in on the spot purchases or just a complete light bulb moment. With some tourists not even realising this was possible and that these wines were only sold abroad.
“make sure things at home are in order, but then at some point go on that trip “😉. My humble opinion!
Mike Carter | 18 November 2023
PK
Thank you for your insights. Love your granny comment! I’m glad we are on the same team.
Your observations about the young guns are entirely correct; however, marketing to mainstream consumers (as opposed to wine connoisseurs) who buy their wines from supermarket shelves is a completely different beast.
I agree that marketing and brand building can be more complicated than they should be. But it does not have to be that way. However, I am sure you will agree with me that the wine industry has unintentionally made wine enjoyment more difficult than it should be.
Wine, in my opinion, should be accessible and bring people together. In the end, it is all about sharing good wine with good company.
PK | 15 November 2023
Greg,
Thank you for another thoughtful bit of writing and definitely a subject needing discussion and focus in terms of the South Africa as a wine brand in the international market. I find myself working in the fine wine sector in London as well, dealing directly with the investment side of the wine world but also assisting our agencies with brand building and it is a minefield, I agree.
I just think theres a handful of things that always come up when chatting to other merchants, fellow South African producers and brand owners and even just Jo Public sometimes.
With some of our more established but even the smaller estates and not even to mention new young gun talents, it is so important to aligning winery expectations with what is realistically achievable in the UK and EU market is important. Making sure the importer understand your business model, your growth and sales expectations and then also making sure you understand not only market, but do your homework on the distributor/importer. You can’t have hopes and dreams and being in some of the top end on-trade establishments in the UK, being drooled over by some of London’s top Somm’s when your representation in the UK specialise in the off-trade and sell mostly to discount prone retailers. Winemakers, export managers, owners, need to do some basic research before shaking hands and just thinking of the GBP and ZAR current exchange rate.
The other small problem we do see and especially in the UK market, has been the ‘flavour of the month’ or ‘what’s new and exciting’ when it comes to South African wine. And this has almost come off the back of the Saffa wine revolution in the UK and the New Wave movement making people use to new and exciting producers popping up at the rate of 20 tonne/ha over the last couple of years :-). Off the back of that more established estates and the older statesman of the industry, rather than reinventing themselves and taking the momentum to grow into new markets and avenues has sat back and criticised and mostly continue doing what they have been doing for so many years. This has had this strange effect of nothing really long lasting or sustainable being attained or achieved off the back of exciting South African wine industry events in the UK. It always lasts for a couple months with the odd article here and there, but after it clears its onto the next campaign for UK merchants and the Saffa boys and girls wait for the their week in the sunshine normally during September each year when the industry shifts focus back to SA in the UK.
Just think there’s so many missed opportunities, but the blame falls at the feet of both producer and importer, with expectations on either side not lining up. Basic industry, market and even own business model knowledge sometimes being as clear as daylight.
Short of the long I think is, #1 difficult building brands with what is making South Africa hip, relevent to a degree and exciting at the moment, #2 bigger brands either partnered up wrong, or just not happy with market position and this has caused stagnation, #3 young guns not 100% knowing and/or understanding the market, not fully aware of where they should position themselves and unfortunately theres always financial pressures and cashflow is king so UK and EU importers come in get them on the books BUT nothing happens with the brand.
Think comparative tastings are great for our producers and brand owners, visits, travels and harvest experience abroad is great for technical knowledge sharing and growth, but at the end of the day the wine industry is all about selling a product and if you don’t have the basic knowledge and/or understanding of who you are selling to, where you should be positioned and who your partner should be or in some cases who they are, then you kind of stuck in the mud. As Greg mentioned, “you gotta hit the books”!!! Market insight, sales and distribution knowledge is as important as palate calibration and spending 4 weeks in a great wine region stomping grapes and lugging crates around… if you want to sell the wine you making.
Just a thought.
Greg Sherwood | 15 November 2023
Thansk for your insightful comments Pieter! It’s an interesting subject for sure… but also a VERY important subject!
Mike Carter | 18 November 2023
Thank you for the insightful comments, Greg. I appreciate you sharing your perspective, and I hope you’ll permit me to offer some additional thoughts.
You mentioned social media – it reminds me of the Mark Twain quote, “It’s easy to quit Facebook. I’ve done it hundreds of times.” While social media can be effective in the short term, nothing beats building a loyal following over time through high-quality, engaging content. Consider a blog or newsletter that allows you to connect on a deeper level, highlight your expertise, and establish thought leadership. This gives you a direct line to your audience, which is great for building relationships, gathering feedback, and increasing engagement.
The young guns offer fresh thinking, but mostly they operate on tight budgets. Beyond leveraging their personal brand stories, consider tapping the power of a creative website that enhances the visitor experience, builds your brand, and showcases your product. This is a huge opportunity to foster one-on-one relationships with your audience, elicit feedback, and drive engagement.
At their core, most winemakers have a gift for crafting remarkable wines. Marketing and branding require playing the long game. The challenge is for wine business owners to delegate that expertise to someone who speaks their language and understands their business.