Air New Zealand Answers Critics

The decision was made to go with one single provider – Villa Maria.

The reaction from the wine industry was swift and not at all complimentary. 

Many individuals were quick to say they would respond by moving their company’s business to another international airline. Others described the move as a disgraceful attitude from a national carrier.

So what were the reasons behind the move? Air NZ’s Chief Operations Officer, Bruce Parton, agreed to answer the following questions.

What was the system used by Air New Zealand to purchase wines for flights and Air New Zealand Lounges prior to January 2015?

Previously Air New Zealand conducted a biannual wine programme which saw the airline invite wineries from around New Zealand to submit wines for selection on board.  Much like the current process, the wines we received were then tasted by our Wine Consultants who would make their recommendations to the airline which would then enter into negotiations to purchase the wines.

What was seen as the problem with that arrangement?

The previous process was both unnecessarily complex and costly to administer.

Firstly the sheer volume of wines we were receiving was challenging to manage and ultimately we didn’t feel the process added any tangible value either to our suppliers or our customers.

For instance, we had a number of smaller producers supplying limited volumes which in some cases worked out to be less than a day’s wine pour on board.  These volumes simply weren’t sustainable for us as a business and also didn’t allow us to create any significant brand exposure or value for the wineries themselves.  In turn research we conducted found there was little brand recognition by our customers of the wines we served.

We also received feedback from a number of wineries that our previous selection process was difficult and they decided not to submit wines for consideration as a result of this.

What was the company’s goal of the new arrangements announced in January?

We were looking to simplify the way we procure the wines we serve on board our flights and in our lounges while at the same time ensuring we offer our customers a fantastic selection of premium New Zealand wines.

We also wanted to put some real investment and effort into our wine proposition in Business class cabins in particular and ensure we were offering our customers travelling in these cabins the very best wines New Zealand has to offer while delivering some real benefit to our wine partners.

One supplier for economy and premium economy has upset wineries and regional associations throughout the country. Was that backlash predicted?

Naturally we expected feedback from the industry on the changes to our wine programme however we were surprised at the level of negative feedback. We acknowledge we could have done a better job at communicating these changes to the industry. We have taken on board this feedback.

Explain in detail the new arrangements. What will happen in economy, business class and Air New Zealand Lounges from here on in?

Ultimately we are investing more in our wine programme and we’re increasing our per bottle spend – in many cases by double.;

Business Class

In business class we now select wines annually from among the Air New Zealand Wine Awards winners as well as other top New Zealand wines.

It is very important to Air New Zealand that we offer a truly premium selection of wines from a wide range of local wineries.  In fact we expect to showcase more than 30 different labels and varietals from more than two dozen separate wine suppliers in our business class cabins over the coming year.

Premium Economy and Economy Classes and Air New Zealand Lounges

We conducted a tender process for a supplier of wines for our economy and premium economy cabins as well as our airport lounges.

Villa Maria was selected as our supplier as they have multiple vineyards and a breadth of brands which allows us to offer our customers a wide selection of fantastic wines from around New Zealand.

We have also retained the flexibility to invite wineries to supply wines for our lounges where additional labels and varietals may be needed.

Do the new arrangements mean Air NZ intends to spend less on wine purchasing?

Quite the opposite.  These changes allow Air New Zealand to invest more in quality wine across our lounges and aircraft cabins and in fact our annual wine spend has increased by an additional one million dollars. 

Do these new procurement arrangements mean only the big players are likely to be showcased? What about the smaller boutique wineries?

We still run a separate wine programme in our Business Class cabins.  Our Business class wine selection features a range of truly premium New Zealand wines including many Air New Zealand Wine Award winning wines.  We have actively encouraged wineries from around New Zealand to enter the awards.

We also have the added flexibility to reach out to wineries that do not traditionally enter wine awards when additional labels and varietals may be required.

Essentially if you win at the Air New Zealand Wine Awards we’ll be talking to you and if you don’t choose to enter the industry awards but make fantastic wine we’ll still be in touch.

How will the new arrangements benefit the New Zealand wine industry?

We are very proud to be able to showcase quality New Zealand wines to millions of people inflight each year.  The airline is in fact the largest single server of New Zealand wines, serving around 6.5 million glasses of wine to our customers each year.

We are looking at ways of how we can further promote the wines we serve on board both domestically and offshore through our various marketing channels whether this be through our inflight entertainment system or social media channels for instance.  We have a number of exciting announcements planned in the coming months around this.

In addition to serving New Zealand wines inflight, the airline is incredibly proud to be a long-term partner of the Air New Zealand Wine Awards and also works closely with New Zealand Winegrowers to promote New Zealand as a destination for wine tourism.

With a MoU with NZ Winegrowers, how is Air NZ planning to promote our wines further in the future?

See answer above. Plus by nature of consolidating our suppliers we hope to have much longer and deeper partnerships with a smaller number of partners rather than a number of short tactical ones.

There may be some in the wine industry that believe this coming out in public is a face-saving move? Your response?

We understand the significance of Air New Zealand making changes to its wine programme and believe we’ve been very upfront in notifying the industry of our plans, issuing several communications to wineries last year. As I mentioned earlier, we have taken some learnings from this and do appreciate the feedback we’ve received from the industry.

In your view, where does Air NZ sit among other international airlines?

While Air New Zealand may be a smaller airline in global terms, we believe we punch above our weight:

More than 13 million people fly with Air New Zealand each year.

We are the number one corporate New Zealand brand on social media with more one million global Facebook fans.

Collectively our safety videos have clocked up more than 50 million views online and have featured in coverage by global media outlets such as CNN, BBC and the New York Times.

We look forward to using some of these tools to share our wine story as well as promote New Zealand’s wine industry.