Dr. Nadia van der Colff
19 April 2021
In this blog post (the fourth in the Wine Consumer Series brought to you by Sauvignon Blanc SA), the success of New Zealand agricultural products, including Sauvignon blanc, will be discussed from a consumer perspective. As a new world wine country, a lot can be learned from how New Zealand approach agricultural value chains and market development during product innovation. Elements, critical for strategic marketing decisions and consumer communication, relevant to Sauvignon blanc, will be highlighted.
Consumer integrated innovation and supply chains
With increased global competitiveness in the wine landscape, innovation is key to stay relevant from a consumer market perspective1. As a new world wine country, consumer needs are at the heart of New Zealand’s agricultural value chains.
Trends and consumer expectations are integrated and considered in every step of the value chain of New Zealand agricultural produce2.
An “outside in” approach
With this “outside in” approach, New Zealand agricultural producers, therefore, not only have a production focus but rather adapt and align their products with consumer needs. New Zealand agriculturalists have, to an extent, adopted the Steve Jobs (Apple) philosophy successfully:
“You’ve got to start with the customer experience and work backwards to the technology. You can’t start with the technology and try to figure out where you’re going to sell it.” – Steve Jobs
In marketing terms, this philosophy can be referred to as a consumer-pull approach, opposed to the traditional market push approach3. With a consumer-pull approach, chances of being more relevant and in demand are greater, ultimately giving bargaining power to place a premium price on a product.
In wine literature, it is argued that a combination of a traditional market push and consumer-pull approach is often required and could provide the desired edge over competitors1.
Consumer-centric core values and marketing strategies
In the case of New Zealand, they use their unique terroir (traditional production focus) to produce cool climate Sauvignon blanc, with globally desirable sensory characteristics4. However, as a collective, New Zealand agricultural producers selected “quality, sustainability and innovation” as core values, aiming to pull consumers and create a demand for New Zealand produce.
“Quality, sustainability and innovation” are also the message that has been consistently sent out to the world to the extent that many global consumers associate New Zealand products with these attributes.
“Quality, sustainability and innovation” are strategically aligned with global consumer trends, especially in higher-end markets. In 2020, New Zealand recorded their 25th year of growth in global wine exports5 and clearly delivers wine aligned with consumer needs and expectations.
A consumer research and marketing budget
Money does make the world shout for New Zealand products! Anticipating and responding to the global health trend, New Zealand agricultural bodies allocated a lot of money to promote New Zealand products in international markets through e.g. in-store tastings and celebrity chef endorsements6.
New Zealand lighter wines
Proven to be fruitful, New Zealand lighter wines (<10% Vol), mostly produced from Sauvignon blanc, is the biggest research programme ever undertaken by their wine industry. From 2018-2019, volume sales of New Zealand lighter wines increased by 20% in the UK market alone. Once again, New Zealand lighter wines’ aim, is aligned with current global trends:
“To deliver a forward-looking premium and sustainable product that supports drinking more responsibly and moderately as part of a healthier and more mindful modern lifestyle7.”
Take home message
for South African Sauvignon blanc
- Global wine consumers need one, consistent message about South African wine, which will help to frame an international perception about all South African varieties.
- Identify and align core “Sauvignon blanc values and vision” with macro consumer trends such as quality, value, health and sustainability.
- Wine markets, both locally and globally, are dynamic and consumer-centric innovation is often required to stay relevant.
- When considering Sauvignon blanc innovation, steer away from a one-dimensional “market push” strategy where the focus is purely on production.
- Innovation does not necessarily imply major changes in intrinsic wine properties but can be innovative marketing strategies or a combination of product modifications and promotions.
- A consumer-pull approach to Sauvignon blanc innovation cannot be adopted without a sufficient budget for consumer research and marketing.
In the next consumer blog, some insight on consumer learning and communication, with relevance for Sauvignon blanc will be discussed.
- Stupono, M., Giacosa, E., & Pollifroni, M., (2019). Tradition and Innovation within the wine sector: how a strong combination could increase the company’s competitive advantage. In Grumezescu, A. M. & Holban, A. M. (Eds). Processing and Sustainability of Beverages: The Science of Beverages Vol 2. Woodhead: 185-204.
- Martech (nd). There is much more to New Zealand’s fresh supply chains than just timely delivery to markets. Growing futures case study series. Available: http://www.martech.co.nz/images/11supply.pdf
- Menna, A. & Walsh, P.R. (2019). Assessing environments of commercialization of innovation for SMEs in the global wine industry: A market dynamics approach. Wine Economics and Policy, 8:191-202.
- McKirdy T. (2019). New Zealand Sauvignon blanc is a global success story, whether wine critics like it or not. Vinepair. Available: https://vinepair.com/articles/new-zealand-sauvignon-blanc-guide/
- New Zealand Wine. (2020). New Zealand Wine Growers Annual Report. Available: https://www.nzwine.com/en/media/statistics/annual-report.
- Piddock, G. (2016). New Zealand venison seen as an ethical choice by European consumers. http://www.stuff.co.nz/business/farming/83325674/new-zealand-venison-seen-as-an-ethical-choice-by-european-consumers
- NZ lighter wine. (2020). Available https://www.nzlighter.wine/our-story/.