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
…show more content…
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.
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”.
the way and producing high quality wine and reaping success in a growing market, but just like any
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
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.
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:
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?
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.
Since RMC has established its brand image as the top quality premium wines through years of wine development and partnerships with top world brands like Marchesi de’ Frescobaldi, the Chadwick, and Opus One, it is more attractive for RMC to pursue higher income market segment. The high earnings associated with greater wine consumption. This market segment is less sensitive to price changes, high-end wines demands usually exceed supply which creates an opportunity for this segment, and retailers have lass of bargaining power since producers can sell high-quality wines through restaurants, hotels, and wine shops.
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
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.
The most important necessary inputs for the production of wine are grapes, bottles and labor. Concerning the grapes, there is an outstanding difference between the traditional wine producing countries for example in Europe (the south of France, Spain, Italy and Southeastern Europe) and big wine factories that operate as oligopolies like in the US and Australia. Due to the bond to traditions and the higher demand for quality in Europe most of the wineries here still stick to the original way of producing wine, including the growth of the grapes on the land around the winery, a so called vertical integration (which is often considered by producers where the supplier's price is too high or the offer is insufficient, in our case this trend results rather in traditional and cultural values than in financial ones). This eliminates the percentage of dependence on agricultural suppliers significantly, whereas concerning a big wine company the negotiation power of the supplier is quite high. These wine companies tend to have a low sensitivity towards the price they are charged, as grapes are a crucial component of wine production. However, in both cases the price of the grapes is always
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 immediate future looks promising for the wine industry. In 2012, the industry is expected to grow by 4.4%, and will only increase through 2016 [ (IBISWorld) ]. The wine industry relies on a three-tier distribution system. The producers sell to the wholesalers, who then sell to the retailers. The national sales tier consists of suppliers who sell to a wholesale distributor [ (Tincknell & Tincknell) ]. As suppliers continue to consolidate, the larger producers will have the upper hand due to