Wednesday, 14 December 2016 08:55

KWV takes a Southern African gin to the British

It’s not quite selling snow to Eskimos, but South African liquor giant KWV is attempting something similar as it takes on the British market – the home of gin – with an African boutique gin brand. Cruxland Gin, a product that is infused with signature botanicals including Kalahari N’abbas, was launched this month in the UK and is being sold through major retail chains such as Morrisons, which has 400 outlets nationwide. N’abbas is a species of truffle indigenous to the Kalahari Desert and Namibia. They only grow for a short time after the first rains of the season and it is said that only a highly experienced ‘truffle hunter’ can find the right location to dig for them. “It is not something consumers will find in any other drink, anywhere in the world,” KWV claims in a media statement. The company adds that a product development team took three years to create the gin from botanicals typical to Southern Africa. This provides a distinctive point of appeal, notes Anneke Mackenzie, KWV’s Global Portfolio Manager for Spirits. “Experts say the gin revival has been sparked by unusual flavours and launches of small [product] batches, which are adding vitality to the category and the re-emergence of a cocktail culture.” Mackenzie claims Cruxland offers gin consumers something that is unique and, more importantly, something that has a ‘taste of origin’. “[In South Africa] the response has been phenomenal and we are happy to report that the introduction to the UK market is showing signs of equal interest.” The product was introduced to the UK liquor trade, media and other influencers through an event at the Whistling Stop, a trendy gin and cocktail bar in London.
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Thursday, 01 September 2016 08:20

The urgent need to rebrand brandy

Falling market share, strong competitors and an outdated product image is forcing the SA brandy industry to rethink its strategies. According to the August-September 2016 issue of the ‘IMM Journal of Strategic Marketing’, the magazine of the Institute of Marketing Management (IMM), the problem began over a decade ago when brandy began losing its dominant share of the spirits market to whisky. “Brandy producers sat back while the whisky guys were working hard on marketing and the premiumisation of the category,” says Nick Holdcroft of liquor giant Distell. “By the time brandy producers caught on they had missed the boat.” The industry has paid heavily. In the seven years to 2014, brandy’s annual sales volume plunged by 16-million litres (34%). Whisky was the big winner, with its annual sales volume in SA rising by 10,2-million litres (33%). “There has been massive margin erosion in the brandy industry,” says Iain Hooper, MD of liquor company Edward Snell. It produces Oude Molen and Wellington brandy. The brandy industry set about stopping the rot in 2011 through a campaign led by the SA Brandy Foundation. The foundation’s Director, Christelle Reade-Jahn, says: “it’s like turning a super tanker around. Our first goal was to stop the bleeding. We achieved this in 2015.” Last year marked the first positive showing by brandy in a decade. Volume grew 1% while whisky volume fell 7%. However, market analysts attribute the reversal to the price of whisky rising due to the weak rand and a decision in February 2015 by Distell, the brandy industry’s biggest player, to hold the prices of several top brands. At the heart of brandy’s problem is the aspiration-driven nature of consumers. “Younger drinkers come into the brandy category because it can be bought cheaply,” says Reade-Jahn. “But they are lost to whisky as their incomes rise.”
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Despite the slowdown in its economy, Nigeria is one of seven emerging market countries that offers ‘tantalising and lucrative’ growth prospects in the alcoholic beverages sector. This is according to a study being released by Just-Drinks, which researches the global beverage industry. The other countries listed as future ‘boom markets’ are Indonesia, Mexico, the Philippines, South Africa, Turkey and Vietnam. Common to all of these markets is the presence of an emerging and relatively youthful consumer base, the report points out. “Economic and demographic factors are expanding the personal income of increasingly large sections of the population, who are also urbanising in search of work, thus becoming more exposed to international trends and products,” it says. Another study on the Nigerian alcoholic beverages market – released in May by international research company Euromonitor – agrees with the Just-Drinks assessment of market potential in the country. According to Euromonitor, volume growth is expected to be ‘fairly strong’, although weaker than previously forecast due to the slowing economy. “Positive growth in economy lager (cheaper beer) is set to help offset losses in mid-priced lager, while spirits, wine and high-strength premixes can be expected to continue growing moderately, although sales of these products are not yet mature in Nigeria,” the report says. “Population growth is also set to support the good performance of these categories.” Euromonitor notes that, in Nigeria, consumers drink mainly in groups outside the home, therefore on-trade (pubs, bars and restaurants) accounts for the bulk of alcoholic drinks sales in the country. But it adds that the growth of modern retail outlets, such as supermarkets and hypermarkets, is helping to drive off-trade (grocery and retail outlet) sales growth as their prices for beer are generally cheaper due to bulk buying.
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Demand from Chinese consumers has led to increasing exports of South African wine to that country, with demand rising 30% in 2015 alone, according to figures from the local industry body.<>/b Reuters news agency says China has now become SA’s sixth largest wine export market, driven by increased interest from the country’s growing professional class. Charl Coetzee, Cellar Master for the Babylonstoren winery near Paarl, said in an interview with the news agency that Chinese drinkers tended to prefer red wines, although they would also purchase stronger whites such as certain chardonnays. In March, Babylonstoren sent its largest consignment yet to China – a container with around 13 000 bottles. The wine farm hopes to eventually be exporting one such container every month. But South Africa faces stiff market competition from France, which is the dominant player, as well as from exporters in Australia, New Zealand and Chile. “We realise that the challenge is to keep getting trade and consumers to trial South African wines and, more importantly, to retain customers to ensure repeat sales,” Michaela Stander, Asia Marketing Manager for Wines of South Africa, told Reuters. “If Chinese consumers are not well informed and not ready to accept our wines, the imports may soon die down again.” In an article published in late 2015, the ‘IMM Journal of Strategic Marketing’ reported that the La Motte winery, from Franschhoek, was another enjoying success. “We entered China three years ago in a joint venture with a Chinese firm. We created a special brand for the market, L'Huguenot, and are selling over 3-million litres annually,” CEO Hein Koeglenberg told the magazine.
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It’s hardly likely to have mass-market appeal, but prominent Scotch whisky brand Ballantine’s is gaining international media coverage with the unveiling of a whisky glass that it says can be used in zero gravity by astronauts and future space tourists. The basis of the design is that it holds the liquid at the bottom of the glass before running it up to a mouthpiece to be drunk. Under normal conditions of weightlessness, of course, the whisky would simply float out of the glass and around the spacecraft – leaving the would-be drinker to try and gather up individual droplets of the amber nectar. “The glass is unlikely to make its way into space in the near future – astronauts aboard the International Space Station (ISS) do not drink alcohol – but in the meantime it will make a useful marketing tool for Ballantine’s,” observed ‘The Guardian’ newspaper in an article this week. Eager not to miss an opportunity, Ballantine’s has also blended what it calls a ‘Space Whisky’ to accompany the glass on its space adventure. The company says the whisky has a flavour of “sweet honey and creamy vanilla, intermingled with fragrant clementine oranges [and] old-fashioned barley sugar sweets with a hint of liquorice spice”. Last year Aardbeg, a single malt whisky from the island of Islay off the Scottish coast, promoted itself as ‘the first distillery in space’ after a vial of its whisky returned from a three-year space mission that saw it travelling at a speed of 27 000 km/h while orbiting the International Space Station 330km above the earth. The company said the aim of the project was to study the impact gravity has on the whisky maturation process, although it has yet to fully explain why this is important to its largely earth-bound customer base. Perhaps it and Ballantine’s are eyeing the lucrative Martian market?
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Thirsty Angolan consumers are partial to a tipple of sparkling wine, while in Nigeria their taste is for a good bottle of red, despite the generally warm climate. This is according to South Africa’s wine promotion body, which is looking to increase sales into African nations. SA exports of mostly red wine to Nigeria have risen to 4,5-million litres a year, while Angola buys 6-million litres, of which 5-million are sparkling wine, Bloomberg news agency reported last week. The latter are predominantly shipments of JC Le Roux, a low-cost sparkling wine. “They are crazy about JC Le Roux” in Angola, “it is the biggest mover in the market,” Wines of South Africa (Wosa) spokesperson Matome Mbatha told Bloomberg. “In Nigeria, they really like to consume red wine. As much as it’s hot, they love your Pinotage [and] your Merlot.” Other African markets that South African wine exporters are keen to penetrate are Uganda, Kenya and Ghana. ‘Strategic Marketing’ magazine, the publication of the Institute of Marketing Management (IMM) will report in its next issue that KWV, one of South Africa’s high-profile wine producers, is focusing its export efforts on African countries and the US, rather than the growing Chinese market. KWV says South African wines are at a disadvantage in China because they are subject to 16% import duty, while wines from France, New Zealand, Australia and Chile are not.
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