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Broedertwis over US Export Strategies

Posted: January 23rd, 2009 | By Neil Pendock


“The last time the SA wine industry stood together was on the boat to St. Helena” (referring to the deportation of bittereinders at the end of the Anglo-Boer War) and “trail dust is thicker than blood” from Louis L’Amour are two popular sayings in SA wine.

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The veracity of the first is confirmed today as SA wine debates the merits or not of establishing another body to encourage exports to the US on the www.winenews.co.za website. The newbie will be called USAPA (USA Producer Association and not the USA Pickleball Association as one wag pointed out) and will be funded by voluntary contributions. It will run alongside WOSA (the exporters’ mouthpiece) which is funded by an export levy. It’s all a bit like COPE and the ANC trying to run SA and in true political fashion, the debate was nearly stillborn as dark and sinister forces attempted to silence one of the communicants on winenews.

Help is clearly needed as SA sales are falling like the proverbial rocket stick on Guy Fawkes’ Night (down ¼ over two years in a market of rising imports). Shouting from the sidelines is a popular hobby in SA wine marketing and some of the anonymous points raised are worth repeating:

• If as much time was spent selling wine in the SA as is spent talking about selling wine we’d be #1;

• We are approaching the American market in too cultured a manner, displaying our Calvinistic and polite British heritage. The inherent brazenness of the Ozzies and Americans laughs at this. So without any loud butt-kicking and an in-your-face approach, we can all get together, talk a lot and even jerk each other off, but it is not going to get us anywhere.

• The pampered SA wine writing industry is conspicuously absent from the debate. No wonder their publications are collapsing faster than RDP houses in KwaZulu-Natal.

For my own 5c worth, I’m more of a Louis L’ Amour disciple and think there’s a lot to be said for trail dust. I wrote about it on winenews six months ago:

First we take Manhattan

While Dalene Steyn from WoSA advises producers to defend market share in Europe rather than expanding into the USA, Mark Solms has secured landing rights for his exciting Solms-Delta brand in Manhattan.

They sentenced me to twenty years of boredom
For trying to change the system from within
I’m coming now, I’m coming to reward them
First we take Manhattan, then we take Berlin

First we take Manhattan by Leonard Cohen

Leonard Cohen could have had Mark Solms in mind when he penned the lyrics of the opening song to his 1988 album I’m Your Man. At the risk of over-egging the barrel, SA wine was a seriously boring place before Mark Solms arrived with his desiccated grapes and Museum van de Caab which connected SA wine to its cultural history for the first time. Sure Groot Constantia, Nederburg and Meerlust have told the white side of the story for decades, but Solms was the first to present the whole picture.

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Professor Solms now looks to be rewriting the wine marketing book as well, acquiring shelf space in some of Manhattan’s most prestigious retail space for his brand. Sherry-Lehmann on the Upper East Side is the refueling outlet for the dowagers and billionaires with apartments overlooking Central Park, the owners of those poodles you see taking their chauffeurs for a walk. Located on Park Avenue, you need to take care when browsing that your “famous blue raincoat” does not bum-brush a stand of Pétrus.

The Sherry selection of SA wine is idiosyncratic to say the least. The last time I was there was to load up on Excelsior Cabernet Sauvignon at $9 a bottle for casual quaffing. This was the previous vintage of the “always reliable” wine demoted from 3 to 1½ stars in the 2008 edition of Platter’s – an assessment I hear that was embarrassingly reversed when publisher, editor and a couple of assorted Platter’s palates tasted the wine again recently. This time, the assessment was done blind and the Excelsior was judged three stars, unlike a couple of other Cabernets that had been rated sighted at three but collapsed to two when done blind. Now we know why the guide has a red cover this year!

Joining the Excelsior on the Sherry shelf will be Solms’ Koloni and Africana, both wines under the Solms-Hegewisch brand, a desiccated white and red respectively made by Hilko Hegewisch. Over at Rockefeller Plaza, Wall Street Masters of the Universe will be able to order Solms-Delta wines with their pastrami on rye at the Morrel & Co. wine bar while the marvelously named Frankly Wines on Broadway and Gnarly Vines in Brooklyn will offer Hiervandaan and Lekkerwijn, both guaranteed tongue-twisters for noo yawk tawkers.

Less of a surprise is the listing at Astor Wine & Spirits on Lafayette Street. After all, Richard Astor is a partner and his ancestor John Jacob Astor just about owned Manhattan in the late 18th century, lending his name to the famous Waldorf-Astoria hotel. Standby for a Solms-Astor listing there too. Vastrap would be most appropriate even if it’s been a long time since a mud and manure floor had to be danced flat in Manhattan.

Cohen’s advice to start with Manhattan before tackling Berlin is not universally accepted. A letter to the editor of the current edition of Wineland magazine by WoSA’s Dalene Steyn is something of a report back on the recent VinPro Information Day held at Goudini Spa. Ms Steyn reports that while Johan Bruwer’s point that there is still a lot of scope for South Africa in the USA is well made “his comments were very valid but I believe we need to be cautious.

While exploring the American market and tapping into its potential is a positive step for those producers who can afford to sustain a long-term marketing campaign and make inroads into this highly competitive market, the majority of SA producers would be better serviced by continuing to build and maintain their marketing bases in Europe.

This is especially pertinent in view of the fact that California is increasing its efforts and budget to grow market share in Europe. Not being able to predict if a recession will actually happen in the States, it may well be cheaper to defend market share en Europe than open the US market.”

Su Birch, CEO of WoSA, agrees with Steyn. “There has been a huge consolidation of distributors in the US and the road is littered with very expensive failures. Most SA producers underestimate the resources required. There is not even an SA category in the US and we need a generic marketing campaign to generate awareness. The US is the fastest growing market and is clearly the place to be but WoSA does not have the resources required. It is a lot easier to sell wine in other parts of the world.”

Reacting to Steyn’s letter and a January report in Decanter that America will soon become the largest wine consumer in the world, Andre Shearer, CEO of Cape Classics, the largest, oldest and arguably most successful ‘SA wine merchant’ in the US begged to differ. “Who on earth would not want to be part of that? Now, if SA producers are being advised by a formal wine industry body, to avoid the US, they’d be plain stupid. If they are suggesting that you’d better have your best juice, best funds, best marketing hat and masses of long-term energy – they’d be right. The US has higher standards than our other export markets and therefore only the best survive. We should be raising our standards vigorously instead of running to the less difficult, but lower ‘barrier to entry’ markets. That being said, in a free market, go where you go, and do what you do!

I would urge South African producers to continue to refine their viticultural skills, make ripe wines with finesse, and get serious about collaboration so that we can jointly raise our overall standards and not settle for grand mediocrity, which I still believe is very prevalent. We are just very, very lucky that our region producers nice wines with some effort. I do not mean that people don’t work hard, but I do think we need to work a lot smarter, to coin an American phrase. I still believe totally that the US will still ultimately define what great South African wine is.”

With WoSA and Shearer offering diverging opinions, the conflicting signals sent to producers are confusing to say the least. Perhaps Solms has a solution – do it yourself. As Mr. Cohen summed it up:

I’m guided by a signal in the heavens
I’m guided by this birthmark on my skin
I’m guided by the beauty of our weapons
First we take Manhattan, then we take Berlin

  
 
 

Comments

 

Dana Buys

January 23, 2009 at 10:29 am

Yes, it is tough to get us ‘boere’ to stand together but not impossible :-) A good number of wineries have been in the USA for a long time. Think the likes of Rust & Vrede has been active there for 14 years with many 90 point wines and a number of Wine Spectator Top 100 finishes.

De Trafford, Boekenhoutskloof, Hamilon Russel, Warwick, Ken Forrester, Glen Carlou, Fairview, Neil Ellis, Sadie Family, Rustenberg et al have all done well and received great ratings over the years.

I did a search on Wine Spectator’s rating database this morning and it showed more 923 Cape wines rated 86 points (Very Good)or better for the 2003 to 2008 vintages. That is not bad at all!
Narrowing the search to 90 (Excellent) points and it returned 293 wines.

Fact is, that despite many great reviews, the South African category does not exist to any significant extent. That means South African wines are lumped under ‘International Other’. Next to wines from Outer Mongolia and Bulgaria etc. Just about no-one shops there or orders from those categories on wine lists.

The objective is not just getting a listing or appointing an importer. It is about creating the category South African properly, positioning it as a quality category offering exceptional value and then working together to create demand for the wines!! The pipeline is full – the wines need to be pulled out of the pipe now.

This is not possible by going it alone and thus the need to work together. There is no other option.

Usapa will work closely with WOSA to ensure no overlap in effort and alignment in objectives. Su Birch has made it clear that we are all on the same page re the road ahead in the US market.

Far from the kind the of agreement that exists in policy and direction between the ANC and COPE :-)

The Usapa blog is now up and running at usapa.wordpress.com

BTW Solms-Delta had 5 wines reviewed by Wine Spectator and they all scored under 80 – Mediocre in their terms. That is a hard sell in the US no matter who owned Manhattan once upon a time.

So lets focus on the big picture – work together, work smart and go there with our best wines to build a category that we can be proud of.

 

Groenie

January 23, 2009 at 12:14 pm

Great comment Dana but why work with WOSA when they’ve already demonstrated they can’t deliver in the USA? Why should producers pay twice – rather give WOSA’s budget to USAPA.

 

Dana

January 23, 2009 at 12:43 pm

Thanks Groenie

WOSA has some contracts and commitments in place that can not change in the short term. As long as we share a common vision for the US market then working together is fine. We will ensure we dovetail our efforts and not waste money on duplicate activities.

As Sun Tzu wrote in the Art of War thousands of years ago: The 1st rule of war is ‘To win without fighting is best’.

That does not mean we are at war with WOSA but that alignment is better and that we need all of our energy in the war to win the right place in the US consumer’s minds.

 

Mike Ratcliffe

January 23, 2009 at 5:27 pm

Good one Neil,
The collective momentum of those that know what a huge market we are missing will prevail, but you are correct in saying that dark forces are gathering. We should be under no false impression – the first battle that South Africa will have to overcome is to get past the small minority that would rather criticise than get involved and make things better.
The question is not ‘should South Africa be present in the US market’, but rather when. The answer is that we should have been there ten years ago. We are playing catch-up.
Mike
http://www.warwickwine.com

 

Emile

January 24, 2009 at 10:27 am

It would really be great to see a couple of tangible ideas for tackling the American market coming out of all this. For example, will the Wosa bumble-bee and gecko tack also be taken in America? Like an ad-agency, USAPA should get a creative section to thrash out some ideas whilst the “suits” do the talking. Take the Antipodeans. A Bledisloe Cup rugby match is being played in Denver’s Mile High Stadium this year between Australia and New Zealand. Not only to promote rugby, but also the products that characterise these nations – wine being top of the list (along with Drizabone, New Zealand Green-lipped Mussels and RM Williams).
When the talking stops, all South Africa-related activities in the US must be monitored and we should be ensuring Brand SA Wine is visible. Who is ensuring the embassy and consulates do their bit? Why not look at appointing SA Wine Ambassadors in America such as Ernie Els, Charlize Theron, Gavin Hood (Oscar winning director, and SA born) and Dion Beebe (Oscar winning cinematographer and SA born.) You don’t always need big budgets and committees to think on your feet.
In any event, wishing you all the best of luck.

 

Groenie

January 24, 2009 at 11:07 am

Emile, you’ve got the job! As Barack says, we need a change – in our case from the time-share re-tread everybody is using at the moment.

See on winenews that WOSA are embracing USAPA – have the WOSA directors voted on this? How cynical is that, to embrace the competition so any success they achieve will reflect well on you? Who pays for these press releases? Is this how WOSA promotes wine in the USA?

So many questions, so few answers!

 

Wine Spectator

January 24, 2009 at 5:20 pm

Dear Dana,

Thanks so much for the absolute trust that you place in Wine Spectator scores as being the holy grail of penetrating the US market. Your side-swipe to Solms-Delta was, however, uncalled for especially if you compare who Solms-Delta is already dealing with in the US (http://www.solms-delta.co.za/m.....nalus.html) compared to who you are supposedly dealing with, http://www.cellardoorimportswine.com/ (although it is quite difficult to make any assumptions on this based on their dormant website). This gives a good idea of the source for your sour grapes but not why you would launch an attack on a farm that I was led to believe falls in the same appellation as yours.

Mark Solms and his team are not only creating wines of real character and authenticity but also has one of the best track records with regard to the upliftment of his workers and the community at large. The latest edition of Platter gives all the wines of Solms-Delta (i.e. excluding Solms-Astor and Solms-Hegewisch) 4 stars and up whereas most of the wines of Vrede en Lust languish in the 3 and 3.5 star range. The way I understand it, USAPA will not allow Solms-Delta (with established market acceptance in the US) to be a partner in your venture (due to not achieving high enough scores in the venerable US publications). Am I the only one thinking that this reminds me of what George W. Bush famously said: “Our enemies are innovative and resourceful, and so are we. They never stop thinking about new ways to harm our country and our people, and neither do we.”

I believe that you owe Mark Solms an apology.

 

Dana Buys

January 25, 2009 at 3:42 pm

Dear Wine Spectator

It could be that the point came across more harshly towards Solms-Delta than intended. The point that I was trying to make is that the SA wine experience in the USA has proven that you can not build the category on your own.

There have been many top producers working with top importers and top distributors there for years, but as most of them will tell you, there is no South African category to talk of yet.

You can’t just go to the USA with interesting stories and connections – you need to go there with products that appeal to the local consumer, deliver great value and as part of a category that gets the consumer’s attention. You need demand vs just more stock in the channel.

Solms-Delta was the example of a possible go-it alone approach per Neil’s column and that is why I referenced them & their Wine Spectator scores.

The Usapa door has been (and still is) open to all producers – no one has been excluded. The meeting notices have been posted on Wine.co.za all along. Solms-Delta was never excluded – they just never attended the meetings.

A key focus will be on showing the best quality wines in order to build South Africa’s position based on quality vs price. Of course producers can sell their lower scoring wines in the US – they just will not be on show.

I think Mark & his team have been very innovative and I have a lot of respect for them. I apologize for picking on them specifically.

BTW we terminated CellarDoorImports a year ago. Four of our wines are 4 star in Platter for what that is worth. I personally agree with Neil’s views re the value of sighted tastings by a single taster. Thankfully Platter is reviewing their approach and that is great to hear.

 

Mark Solms

January 25, 2009 at 4:26 pm

I absolutely agree with Neil’s advice (‘do it yourself’) especially if your wines are sufficiently different to require individualised marketing. As Neil explained, it has worked very well for us in the US. Quite apart from all the usual advantages of independence and personal responsibility, there is a specific disadvantage to generic marketing that affects producers like us. This disadvantage explains Wine Spectator’s misleading ratings of some of our wines (which, by the way, they undertook not to publish; I had not noticed until Dana’s unwelcome remark that they appear on their web archive).

Tasters who approach our wines in a ‘blind’ generic line-up, as Wine Spectator’s panel did, and therefore do not know they are made from desiccated grapes, might understandably worry about the unusual aromas and flavours which they cannot explain. Accordingly, they score them cautiously. We have suffered this frustration time and again (from tasters who think the less they know about what they are tasting, the better). The latest example: WINE magazine (blind) rated our Amalie 2007 one star, while Platter (sighted) rated it four-and-half stars.

Likewise, Jancis Robinson and Neil Beckett (who tasted our wines sighted) described, in the Financial Times and ’1001 Wines You Must Try Before You Die’ respectively, the very same wines that Wine Spectator rated less than 80 as “seriously distinctive” and “unique”. Such attributes can evidently be actual drawbacks in a generic (and blind) context. That is why we are ‘doing it ourselves’.

 

Pieter de Waal

February 4, 2009 at 11:49 pm

Charles Back makes some very relevant comments on his blog: http://www.blog.fairview.co.za/?p=389

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    Called "South Africa's most influential wine writer" by DrinksBiz (NZ), a "wijngoeroe" and "beminnelijk maar snoeihard" by De Telegraaf, a "Master of SA Writing" by Ernst Gouws and voted “most trusted palate” by readers of WINE magazine, Neil Pendock is South Africa’s leading Indie drinks commentator.

    An "enthusiastic amateur", he owns a small farm on the Paardeberg which used to supply a few grapes to Swartland Winery, a producer he never wrote about. After two decades in the spittoon, he retains a healthy disregard for the anoraks, bowties and Emperors of drink and their new clothes.