All Things to All People – Smart Marketing or Stupidity?

We all know that the Barossa makes great Shiraz; Coonawarra and Margaret River are the best for Cabernet Sauvignon; and, Tasmania for Pinot, and so it goes on.

During my recent trip to South Australia, I noticed something interesting which some people will think makes a great deal of sense but to some purists, it is utter folly and stupid. Many wineries I visited are experimenting with all sorts of grape varieties. To some extent, this experimentation has been going on for a while but it is increasing exponentially. In this week’s article we will examine why and look at the pros and cons of this expansion.

Sevenhill Cellars in Clare has been an active winery since the 1850’s and has over a sequestry of experience and tradition behind them. Being owned by the church, one could rightly be expected to think they would be conservative in their approach to wine making. That may be the case, but it does not stop them experimenting with untried and unproven (in their area) grape varieties. They have currently planted and are experimenting with Barbera. When I asked Br John May why they were doing it, his answer was much the same as I received at many other wineries, “We are trying to get in front of the next trend or the next big thing.”

This response is interesting for a number of reasons and whilst I have picked Sevenhill Cellars, I could have picked Pirramimma or any one of a number of old, well established wineries and the story would have been similar.

As background, it is important to note that the fact that the Barossa produces such fine Shiraz or Margaret River great Cabernet Sauvignon is no accident. Likewise, there is a reason why Bordeaux grows only a selected number of red varieties and why Burgundy specialises in Pinot. So why doesn’t Burgundy grow Shiraz or why doesn’t the Barossa produce good Pinot? The answer is simple and can be summed up in a single word, “climate.” You can’t grow cherries in far north Queensland and you can’t make decent Pinot in the Barossa. You also can’t make great, big Shiraz in Tasmania either.

Not everything is black and white. Coonawarra can make reasonable Shiraz, and the Adelaide Hills can do a credible job of both Pinot and Shiraz. Some new varieties may be viticulturally adequate in the longer term in their new areas but it does not mean marketing success or great wine. However, no matter how hard you try, you are never going to make a great Pinot in the Barossa, so why are so many wineries planting so many new varieties in their areas which may wind up as successful as Barossa Pinot?

Times are tough in the wine business. As the new plantings of the last decade come on stream, the oversupply of some varieties will only get worse until market growth (and hopefully exports) can absorb the excess. At this point, Shiraz and Chardonnay are the big sellers. Cabernet, despite being one of the noblest varieties is not that easy to sell. Margaret River has even produced cask wine for the first time! Sure, the icons will still be in great demand, but the reputations of the likes of Moss Wood, Cullen, and Grange have taken decades to build and their popularity is not an issue. Instead of trying to make “great world class wine,” the wineries that are planting these new varieties are trying to find the “holy grail” – the next big money spinner.

In the mid 1990’s for many, it was the shift to the big, American oak, blackberry, and prune flavored milkshakes that appealed to a certain influential US wine critic and his followers. That wave has passed its peak so the wineries are looking for the next big thing that will bring in the cash. Did the 90’s trend do the industry any good? Yes and no! It was profitable for some, but in many ways it left Australia with a reputation in the US for making a particular style of wine that will take a long time to change.

The shift to big, blackberry and prune, oak, alcoholic milkshakes was not very hard to achieve. It was a natural incremental development along an existing path. But make no mistake, it was a fashion trend, no more and no less. Like all fashion trends, they come and they go, there is little long term brand loyalty. The fashion press decides what the next “in thing” is and the fashion conscious consumer moves to the new fashion. Then in time, they move away when the next vogue comes into being.

If cutting a new cloth of a different design and shape is all it takes to be successful in wine, following the fashion, or indeed, setting the fashion would be easy. Unfortunately, many wineries are confused between “branding a wine label” and “creating a new market” and the two things could not be more different. Branding a fashion wine is, in theory, relatively easy, think labels like wines called “Lust” and “Envy.” These fashion conscious wines come and go very quickly and can be fashioned or designed with short notice.

Some wineries are more than trying to catch a fashion wave. In reality, they are hoping to design a new wave catching implement that will appeal to a particular type of surfer which may or may not be popular in a few years time. In the words of Yes Minister, “it is a brave move.”

Many of the wineries are planting Spanish and Italian varieties like Tempranillo, Nebbiolo, and Barbera etc. As these wineries are new to these varieties, they are not going to make great wine straight off, unless it is by a stroke of good luck. The vines need to age, the viticulturalist needs to gain experience on how to best manage the vines and the winemakers need to experiment to find what works best. Yesterday, by chance I was talking to Mike Brown, the winemaker at Gemtree, about his Tempranillo and he said, “I had to throw out the Australian winemaking rule book and fly but the seat of my pants. At one stage, I wanted to throw the wine out but with a lot of work (and some encouragement) it came good.”

All this takes time and money and the big assumption is that the area is actually suited to growing that grape in the first place. Then once a good wine has been produced, there is a significant matter of educating the market and that is no small task. The average wine drinker is unlikely to try some wacky blend or variety they know little about in a restaurant. There is an old joke, “why is Merlot so popular in the US? Because the average American can’t pronounce Cabernet Sauvignon.” Can you imagine the average casual Oz’tralian trying to get his tongue around Tempranillo in a restaurant? It would be worse than trying to order “Cabinet Frank.” The wine will have to be “sold” and the customer nurtured and educated, be it by the wine waiter or the cellar door staff.

So why are wineries doing it? Simply, they hope to turn a profit in the process. Some see it as investing in the future and many hope they have been smart enough to pick the next big thing. Will they wind up being winners? When you consider the long-term chances of success, very few will, some may get lucky but it may be an expensive (and useless) exercise for many.

For a moment think of Joe or Josie Average who walks into a boutique winery whilst on a short break holiday. Joe’s favorite tipple is a fine light Pinot and Josie prefers big full-bodied Shiraz. This winery is small and grows its own fruit in one area. What are the chances that both Josie and Joe will both find a wine they like? Low! And that is because if this winery is trying to produce good wine, they will have a devil of job producing both a big Shiraz and a delicate Pinot. However, that is what a lot of wineries are trying to do with these new grape varieties; they are trying to be all things to all people and unless you are a huge concern and buying grapes from all over, that’s difficult.

Southcorp, Hardys, or Blass may be able to do it but many of the smaller guys have little chance.

I love the words of Peter Barry of Jim Barry Wines when I interviewed him and he was talking about profitability and said, “Those involved with new labels; trying to get five hundred cases here and there, in the long term confuses their market as they have dumped too many new labels on them; that’s why we have cut back to the core range.”

Interesting how one successful winery believes the secret to doing well is to concentrate on the varieties that do well in their area and tries to build the demand for those wines. The complete opposite thinking of so many others!

d’Arenberg has been spectacularly successful with their huge range of these new wine styles but they have been smart about the way it has been done. Firstly, volumes are low. Secondly, they have the infrastructure behind them to support the introduction of these new wines. There is a very successful cellar door operation which is a great way to educate the public but even better, they have a thriving winery restaurant which shows how well these wines go with food. And that has got to move a big percentage of these new labels. There are also dinners put on across the country to showcase the wines.

So who will be the winners and who will be the losers? Time will tell, but in the short term, there will be more losers than big winners.

Copyright © Ric Einstein 2004