2009 will be testing time for the wine industry. The commodization of wine will continue and most wine producers will be price takers. Red wine prices are expected to increase substantially. Wine producers also face savage price increases for packaging, especially labels, bottles and aluminium closures.
However wine producers should be careful that this "noise" doesn’t deflect attention from the possibilities for adding value to their product. Adding value can mean a lot more than brand image or cutting prices. It’s how well you transact business with your clients, how responsive you are to inquiries and the clarity and speed of your confirmation.
Here are three trends that will influence the South African wine industry in 2009:
Not all consumers are price sensitive. Premiumization (a trend identified by Trendwatching.com) offers wine producers the opportunity to escape the commodity trap with up-market packaging for those products that offer the consumer more than what he thinks he needs, or has become used to expect.
Web savvy marketers know that over 2 billion consumers will be connected to the internet by 2009. With just a hand full of South African wine blogs available, grab the opportunity to communicate with your potential consumer if you have a good story to tell. I recently Googled "South African wines" and not one South African wine estate was listed in the top 10 search results.
Government regulators concerned about the rise of binge drinking will play a greater role in how wine is marketed, and big changes seem to be afoot for the wine industry in France. Warning labels are now reality for South African producers. Advertising of wines is also set for radical change. According to a recent Financial Mail article the South African transport department has proposed that all advertising of alcoholic products that is visible from any public road be banned.
Trendwatching.com comments that 2009 will be an excellent year for those businesses keen on showing consumers that they really care. At the same time, this is a great moment to innovate: shrinking budgets and diminishing revenues from existing offerings normally bring out the best and most creative in business professionals.
But the most important side effect of more austere times is probably that consumers start questioning what truly makes them happy, which more often than not steers them towards the realization that happiness ain’t (just) about traditional consumption. Expect pockets of consumers to switch to lower-consumption models with surprising ease, and to look for different and less costly sources of happiness and thus, ultimately, status. Any way you can help them with that will be a guaranteed winner.
By Mike Carter.