The Wine Industry and Vincor
Vincor International Inc. is in the business of selling premium wine to discerning wine drinkers. The company relies on its firm resources and capabilities from which it derives its distinctive competencies. These include the ability to produce market and distribute premium New World wines to a growing market of customers around the world. The total estimated world market is worth approximately $190 billion dollars (U.S.).
Vincor’s strategy is based on its distinctive competencies (such as world renowned wine making experience, vineyard development and ownership, and the ice wine product/brand) and centres on an acquisition and takeover formula (sometimes with a joint venture component). The company
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Vincor does market wine alternatives itself, as a way of dealing with substitute demand. Vincor makes cider and has a wine kit business division (Spagnols) that gives Vincor some product diversification. Partly because of the ease of competition and as part of the differentiation and protection of the Canadian wine industry, Vintners Quality Alliance (VQA), a quality assurance program that identifies Canadian premium grape content, assists in making start-up more difficult for those wishing to emulate Canadian wine brands. The dollars spent on marketing and brand loyalty play a large part in protecting market share and there are certain absolute cost advantages that contribute to establishing some barriers to new competition. Ultimately, there is little cost to the consumer when considering switching brands. Experimentation in wine drinking is often a characteristic of the wine drinking market and thus can contribute to promoting new substitute entry into the market.
Bargaining Power of Suppliers
The supply of grapes, apples, bulk wine and grape juice concentrate for Vincor’s wine products comes from a combination of sources. Privately owned vineyards (Canada, U.S., Australia) provide somewhere between 35% to 57% of the raw products needed to
Vincor International Inc. was North America's 4th largest producer and marketer of wines and related products by volume with leading brands in all segments of the market. Vincor has wineries in California, Washington State, British Columbia, Ontario, Quebec and New Brunswick. Its family of estate wineries is supported by an international distribution network and dedicated sales and marketing forces. Vincor's premium wine products are complemented by a variety of popular priced wines, wine kits and refreshment products. Vincor was taken over by Constellation Brands.
The study data appear to support the notion that CFC grape juice is held in high esteem in Puerto Rico, yet a solution to CFC’s sales problem is needed. With this in mind, Ms. Verbrugge arranged a meeting with Jeff Hartman, Market Research Manager, to discuss and review the situation. Ms. Verbrugge wanted to examine the problem in more detail and was prepared to commit
Large-scale wine suppliers from New World countries (US, SAm, SAf, Australia) were exploiting modern viticulture and more scientific winemaking practices to produce more consistent “high-quality wines”.
Wine growers need to invest heavily in market research and customize their marketing and labeling to
The product we chose to do was wine and we picked this item due to the business sector we are entering. There are an excess of 300 wine exporters in Chile and the main ten accounts for 52% of the aggregate wine exports. Chile is a wine producer 's heaven as the world 's fifth biggest wine exporter. It offers long, hot summers and cool waterfront breezes which are perfect climates for vineyards. Not only is the temperature near flawless, but the environment is pest and disease free so therefore the grapes can grow with just about no impedance whatsoever. The soil also is a major contributing factor, with the differences of soil sorts in Chile; various sorts of wine can be produced. From the business standpoint there is no way we could pass up this opportunity especially in a developing country with so much room for growth.
HVWC was established in 1990 by the Smith family and over the years, the company has managed to upscale its production by increasing production resources, production capacity and improving the distribution mechanisms. Though the company has struggled to keep up with the quality demands, viticulture and viniculture studies have however enabled the company see remarkable developments in increasing quality to the extent that the company has managed to collect various awards and gain international recognition as high quality wine manufacturers. This plan is therefore set to promote strategic effort that will steer the company’s success further and will be based on information gained from:
With the global wine industry expected to generate almost $292 billion in 2014, Wine production and its supply chain are no doubt big business. The supply chain involved from a growing grape to an uncorked bottle is one that involves many intricate details. Because of the popularity of wine, grapes are in fact the largest fruit crop on Earth. But that is not indicative of the complex and interlacing processes that are necessary to grow the proper grape for wine production. Proper weather conditions, the right mixture of soil, and balanced pruning are just the tip of the iceberg in just the first step of the entire wine supply chain. These same grapes that have been tended to as if they were patrons of a restaurant having their own fine glass are then picked and crushed only to be placed into containers to begin the next step of their journey. A long series of processes including, cold soaks, must adjustments, adjustments, fermentation, and yeast addition are where complex science and agriculture join forces. In a scene worthy of a science fiction movie in a mad scientist’s labratory, these grapes slowly become wine. Finished product can be bottled or transferred in bulk to its next destination but will eventually land in a glass where a final customer enjoys the fruits of all the labor involved in this harmony of moving parts.
The US winery industry had a growth rate of 4.7% between 2006 and 2011, and is expected to grow by a rate of 4.9% over the next five years [ (IBISWorld) ]. In California alone an average of 175 wineries have opened every year since 2000 [ (Richard Green) ]. The states of New York and Virginia have been major players in the US wine industry. The data shows that the demand for wine has been increasing at an exponential rate over the past 5 years. Average annual revenue for the wine industry is expected to be estimated at $20.2 billion through 2016 [ (IBISWorld) ]. The growth of the wine industry, particularly over the past 10 years, can be attributed to a few key drivers in the market. Per capita consumption of alcohol has increased
The focus of this marketing plan is the iconic Penfolds Grange which is arguably Australia’s most sophisticated domestic wine brand and how it can be strategically positioned to capture greater value share in the highly competitive domestic and export luxury wine segments.
1. How did the French become the dominant competitors in the increasingly global wine industry for centuries? What sources of competitive advantage were they able to develop to support their exports? Where were they vulnerable?
In the wine industry wine producers have two basic markets, the low budget substance abusers and the high class table wine drinkers. When wine producers develop their products they usually have one of these markets in mind.
This report will outline the reasons Generation Y have become one of the biggest growth areas for wine businesses. Generation Y includes consumers born between early 1980s to the early 2000s. Wine producers have adopted may modern methods of marketing, such as using social media and the internet to reach a far wider global market than in previous decades. Many wine businesses sell their wine online, providing free samples and recommendations to further expand their customer base. In addition to this, New World wine is being modified to suit young consumers tastes and preferances, and conforming to popular trends. Wine tourism is also becoming increasingly popular worldwide, as vineyards open in regions that had never before produced wine. The designs of wine labels are also changing to suit the younger generation 's tastes. These factors are resulting in Generation Y becoming one of the biggest growth areas for the wine industry.
The U.S. wine industry consisted of 1,500 wineries; however, it was highly concentrated industry since 70% of the wine, by volume, was produced by the top 10 wineries. California was the leader in the U.S. wine industry and was accounted for 90% of the production from over 800 wineries. Wine distribution system consisted from wineries, wholesalers, and local retailer and nonretail outlets. Selling wine through the internet or directly to retailers was almost impossible in the majority of the states. Supermarkets were the biggest distributors with 52% of the retail wine sales; therefore, they had high bargaining leverage. Specialty stores
In order to understand exactly how wine is produced, one must go all the way back to it’s main component – fruit. In many cases, wine’s main component is grapes. Grapes are grown on a