US wine market demands focused approach

Promoting and increasing South African wine exports into the tough United States market remains a top priority for Wines of South Africa (Wosa) according to the organisation’s CEO, Siobhan Thompson. Addressing the Exporters Club Western Cape (ECWC) recently, Thompson said it was a market that offered exporters tremendous opportunity but breaking into it was difficult which was why a more focused strategy had been adopted. “It is for all intents and purposes 50 countries in one,” she said. “Rules and regulations vary on a state-by-state basis and targeting retailers directly is impossible due to its three-tier trade system with regard to alcoholic beverages.” This system controls the sale of alcohol across the US and ensures that exporters cannot target retailers directly. The three tiers are producers, distributors and retailers. “Basically this legal system ensures that producers can only sell their product to wholesale distributors who in turn then sell to retailers who then sell to consumers,” said Thompson. “As South African producers we have to convince these wholesale distributors that are massive in comparison to what we are used to here that South African wines are what they want. This is not easy. One has to put up a real fight to get into this system.” The US initially implemented this system to increase the minimum price of alcoholic drinks, to control alcohol abuse, and to decrease the potential political power of large producers who could create a monopoly in the market and limit consumer choice. “We are finding though that there is real excitement around South African wines once we get a foot in the door,” said Thompson. “And reviews of our wines are very positive. People who take the time to taste our product are of the opinion that it is world standard and will then commit to stocking more as has been the case recently with a US buyer.” She said in an effort to penetrate the market more effectively Wosa was targeting fewer states in the US. “We are not looking at the USA as one market but rather focusing on specific states.” She said a more focused strategy was sure to see exports grow far more than has been the case to date. “It is a market that is important to us and we want to grow our footprint, but we are doing it in a more compact way. It remains a country where we see growth for wine exports.” INSERT & CAPTION We are finding that there is real excitement around South African wines once we get a foot in the door. – Siobhan Thompson