Distell move highlights growth opportunities

Opportunities for growth in international wine markets still exist despite the current recession, according to Distell’s international director Donald Gallow.

Gallow used the announcement of the company’s flagship brand Nederburg gaining a listing with major Dutch supermarket chain Albert Heijn BV to say the deal was consistent with Wines of South Africa’s (WOSA’s) aim of building wines sales in Holland’s premium segment.

Seven Nederburg wines, he said, would be selling for between €4,99 and €5,99 in Albert Heijn stores. The multiple grocer is the leading retailer in the Netherlands.

“WOSA recently unveiled a marketing strategy designed to counter South Africa’s over-representation in Holland’s extreme value market, where wines are priced below €2, and instead grow sales in the mid-priced band, by focusing inter alia, on brand champions,” he said.

Gallow is confident that Nederburg will find favour with the Dutch supermarket’s customers, given the brand’s long-standing heritage, its prize-winning tradition and its heightened international profile emerging from the association with the 2010 FIFA World Cup.

Nederburg has been granted the official licence to produce a special collection of wines in the lead up to next year’s tournament which will be sold until the end of 2010.  

“Already on offer in a range of markets, these wines are being actively merchandised across the international duty-free channel, strengthening the brand’s visibility,” Gallow said.

He believes Distell’s strategic partnership with agent Baarsma Wine Group Holding (BWGH), newly strengthened with the inclusion of additional wine brands from his company, will further consolidate its position in Holland.

BWGH is a leading player in the Dutch retail and on-trade channels representing a range of established trademarks to over 6,000 trade customers. The organisation also sells direct to a consumer base of over 30,000.  

Gallow also confirmed that Distell has secured listings with the majority of the major multiple grocer chains in the UK, where Nederburg is performing well, along with Two Oceans, which has been steadily building support worldwide.

Already highly popular in Canada, its biggest market globally, Two Oceans is now escalating its profile in the US, thanks to positive reviews from Robert Parker and other influential critics.

Distell also sells many of its wine brands across the African continent and in selected Asian markets, as well as Australia and New Zealand.

The company reported a 22% year-on-year increase in total wine export volumes for the 12 months to June and, according to Gallow, should maintain a double-digit growth momentum during the present financial year.

“In the present climate, shoppers are obviously very price-focused,” he said. “Distell has followed a policy of austerity in good times and in bad, and manages a very cost-effective supply chain to over-deliver on the price/quality ratio, while protecting brand equity.

“This is an approach that should continue serve us well, particularly while consumers are forced to be so budget-conscious.”

Alan Lodge, 28.10.2009