Future Leaders

Two were viticulturists, one a winemaker, the other a marketer. The general feeling after their presentations was; this industry is in good hands, if these guys are anything to go by.

Here are the abridged speeches given at Bragato.

Stuart Dudley – Marlborough Viticulturist Villa Maria

As has been widely discussed, the industry is in an enviable position, with continuous growth in our markets, strong brand perception,  a clean green image, all controlled by large group of passionate people. 

The Land

There is a limited amount of the traditional vineyard areas left.

I say the word traditional as this is constantly subject to change.  We as an industry have constantly pushed the boundaries, higher, further and in new remote areas.

Thirty odd years ago the Awatere Valley, Gimblett Gravels and Martinborough were all considered non-traditional and non-viable, and look at them now.

The restricted availability of traditional vineyard land will push a new wave of pioneers out into new regions, pushing the boundaries as those of our past have done.

With these new plantings will come new varieties, styles and management techniques, all of which will have to be flexible to deliver the wines of the future consumer. 

Water

One only needs to look at the current political environment to recognise the importance this country and its people place on water. The Dairy industry is currently in the spotlight, however we need to ensure when the attention comes on us we can proudly stand by our practices.

With restrictions on water availability there will be a need for better application and monitoring, which in turn will bring more compliance.  As we are already seeing, there will be an increasing number of storage dams required, and in time it will be likely that another “Think Big” scheme like the Southern Valleys water system (Marlborough) could be required to open up more land.

I do however feel the biggest advancement may be made by moving away from our common rootstocks, almost all of which are designed to be low vigour and spoon fed water and nutrition.  Many international regions with a dryer climate than us survive without irrigation, something we seem fearful of doing.

Sustainability

It cannot be understated the value of having an industry body that has installed a system by which we grow our grapes sustainably. There is no other direction for the industry to go and we are currently ahead of the pack, thanks to the foresight of a few individuals.

However we need to take the next step.  Within the relatively short lifespan of our industry we are already seeing resistance to herbicides and fungicides, and significant degredation of soils, our most valuable asset. We need to move towards working with our vineyards, not fighting them. 

There is a great opportunity for us to become the first “residue free” wine industry, a goal which is not beyond our reach, with a significant part of us already there or close to it.

Innovation:

A successful future requires it.  New technology will be an ever increasing part of how we manage our vines.  To maintain competitive advantage we will need to continually look for new ideas to reduce costs and increase quality, while maintaining our image. 

Although the number 8 wire attitude will help us in some ways, the real advancement will come from our research teams and technical experts.  Viticulture and the wider industry has to continue to invest heavily in research. As the innovators uncover the secrets of our vines, new machines, products and techniques will be born. 

People:

Viticulture will require an increasing number of highly qualified people to ensure quality and growth goals can be achieved. This can only occur through investing in these young people, training them and having them learn from the experienced practitioners.  Young people will be our future, so we need to ensure we attract the right ones, and give them all the resources they need to help the industry take the next step.

Caine Thompson, General Manager Pyramid Wines

Using Team New Zealand as a metaphor, from the winning of the America’s Cup back in 1995, through to last year’s rather disappointing finish, Caine had some valuble points to make.  (Just think Team New Zealand, when reading this.)

The good news is we are still in the race, and our reputation is solid. We led it for some time, but recently the wind has been taken out of our sails. It could be worse, but it could be a whole lot better. 

So how do we get back, so we can stay in front? As we look forward to the race, there will be a lot of changes and there are a number of Mega trends that are upon us, that will change the way we operate our business. 

What will the world look  like in the future? 

Well there will be 8.3 billion of us by 2050, which means we will need 35% more food, 40% more water and 50% more energy. More than 20% of the people will be over the age of 60. There will be 50 billion users of internet connected devices, mobiles and computers. How will this change the way we do business? 

And a huge  shift in GDP from G7 countries to E7 countries. Will these countries even like Sauvignon Blanc? Do they even like wine?

How do we build a competitive boat as an industry and as businesses in light of these trends?

We need to build competitive luxury business brands and a meaningful international New Zealand brand. As an industry and a producer, the boat is our brand and we all compete in the race to sell wine, to make a profit for our shareholders. To build the brand, we need to recreate value by building from the solid foundation that our forefathers have done such a great job of. So where does this opportunity lay?

Three areas we need to improve on.

Firstly excitement and innovation as an industry and as a business. As we look forward, mobile and internet devices are going to completely change the way we do business. They already are. Online sales are huge and are growing all round the world.

If you haven’t heard about digital currencies, they are going to be part of our future. The likes of Britcoin, if you haven’t heard about it, I encourage you to do some research. Our company started using and accepting Britcoin about six months ago and now it equates for about 10% of our on-line sales.

Machine drones – there is a lot of potential  here and there is excitement that New Zealand can lead in this space, all driven by mobile devices. 

In terms of exciting we need to look at other coutnries for innovation. What’s hot, what’s not? What can we learn from others? What are the somms writing about, what excites them? New varieties and new sites. Have we found the best sites yet? Probably not, because we are such a young industry. New business models, shared resources, cooperative buying, paired groups. Viticulturists and winemakers always get together to talk about what they are doing. What about executives, marketers, CEOs - how often do they get together?

Luxury positioning

Our reputation going forward  will not be built on premium Sauvignon Blanc. We need to play our best hand always. In order to sell large, we need to promote and sell the elite as a country. We need luxury brands and products north of $100 a bottle, but it needs to be honest. It needs to have integrity and purpose. 

We need to build competitive business brands, and a meaningful national New Zealand brand.  To build that brand we need to recreate value with three key measures: Excitement and Innovation while always staying curious 

Finest quality

 New Zealand has a huge opportunity to lead the world with residue free wine production. It is something that has a lot of meaning and is tangible to consumers.

Biodynamics and Organics will continue to grow and lead the charge. They will have a competitive advantage in the market in the long term. The natural winemaking movement will continue to rise, especially among Generation Y. You can see this at events like Rootstock. This younger generation is our next consumer group. 

So we came bolting into the race in 1995, we fell over for a while, we are getting there, but we need  to keep pushing. To get better, to be better. As the job is not done yet.

Jack Glover Sales and Marketing Manager Mudhouse Wines

Simply put marketing is the promoting and selling of products. The future of marketing New Zealand wine is a pretty big topic and we must review where we have come from. We got an inspiring view from the 2014 fellowship inductees, Herman and Agnes Seifried and Richard Riddiford, and the position our industry is in as a result of these pioneers is enviable.  

We must also look closely at what the key factors are that impact on our industry right now so that we can identify the areas that we can control or influence in the future. 

All factors that influence the growing, making, marketing and selling of our wines are interrelated and impact on each other. However there are only a few that we can have significant influence upon to help shape our future. This is the media, the market place and our consumers. 

By the nature of our geographical limitations and the global thirst for our wines we are a demand lead industry. The important thing to note here is that we need to be in touch with what is driving that demand and for us, this is the consumer.

The traditional influence on the consumer and their buying habits has been by way of the media and the market place. Our drinkers have been fed review after review, award after award and been merchandised in retail and the on trade environments to death. But the consumer is shifting and the current consumer is making better, more informed and tangible wine choices in a market that is more open, segmented, diverse and information saturated than ever before.  

Does this mean that consumer demand can start influencing their traditional influencers? If yes then we need to be more relevant to this consumer and focus more on where they are engaged to augment the future of New Zealand wine.

This means getting our businesses future fit to be in a position to talk to our consumer. Review the traditional must haves in your go to market strategy – a story and distribution – against what consumer we want to engage with, what is happening in their buying environment and the movements in our categories. In addition to this we need to focus – where you focus is where you grow. Delivering a strategy from this is getting future fit and the consumer is at the heart of this. Lastly we need to test this regularly to stay future fit and improve.

New Zealand wine is demand lead, not supply – so don’t ignore the consumer, they aren’t loonies, they are the future.

Braden Crosby – Winemaker Borthwick Estate

Look at the future, and the word millennials keeps occurring.  Millennial is the word that strikes fear into the heart of any employer and marketer.  These are the future winemakers and wine consumers, the future taste makers and fashion creators.

But in two years time, these millennials will not be drinking mass produced wine.  They will be drinking craft beer, lots of it, and the better and more interesting the brewing process, the more they can’t get enough of it.   

Which makes you think. I love craft beer and I think the craft beer producers have got one over us in the wine industry.  Pro-active rather than reactive thinking has led them to captivate a whole new market with their forward thinking innovation and experimentation in production techniques and packaging.  

The future for all industry is in creativity and innovation.  Apple do it so well, imagine if New Zealand could replicate what Apple has done. What would that even look like?  Sauvignon Blanc is great, but how do we move beyond this to the next level. 

In the future we will see great technological advantages driven by winemakers and consumers.  Yeast selection, winemaking technology, laboratory equipment, but some of the most important improvements in winemaking will be in our ability to create wine in a more sustainable and environmental fashion. Sustainability is no longer a by-word for an annoying scorecard. We need to lead the charge as our size gives us the opportunity to be more dynamic than other larger wine producing countries.  We are going to up the ante and in winemaking, this means greater efficiency in power and water usage and reduction in waste.

We are becoming more attuned to our environmental impact and coming to terms with how we interact with our environment.  Developing an environmental concience goes hand-in hand with an increasing awareness of the social issues, especially around the potential harm from alcohol, and the safety of our product.  

Food safety and an understanding of what is going into our wines will become a bigger issue in the future.  We have to be careful before we are forced to list ingredients on the label.  The key to developing consumer awareness is to promote transparency in our winemaking practices and educate the consumer and winemakers.

Education 

We are seeing a rapid increase in the training level of our industry, but it would be great to see a higher level of education at a technical and scientific level. 

And in business as well.  It would be great for universities to think about running short courses to keep up skilling our labour pool.  Diversity of skills in the workplace will become imperative…because what is the winemaker’s job again?  

Making wine is a start, but the modern winemaker will need to have more divergent talents, such as scientific technical knowledge, business, marketing and social media skills.  We will need to not only be able to do a tannin assay, but tweet about it at the same time.

And I don’t want to be overly controversial, but pay rates are one area that is going to be an issue going forward.  We all have passion, but when you have studied for 3-4 years, have a degree and 2-3 years’ experience, you need to be renumerated appropriately, and I fear some people may leave the industry if they cannot get a living wage at the start of their career. 

Who are the people who are taking over the reins of our winemaking enterprise?  The ability to buy into the wine industry for a young winemaker is daunting, and most probably unaffordable.  We need to think about succession planning
to ensure we maintain our
eclectic, diverse mix of business models.

It is a competitive world out there, but it doesn’t need to be survival of the fittest here at home.  Let’s look out for the younger generation. Not only are we the ones who have to fund the pensions of all the retiring winemakers and viticulturists, but because when New Zealand’s winemaking is strong, we will all be better off.