A group of nine grape growers with a total of 49.6 hectares growing potentially 274 tonnes of wine grapes. Six of the nine growers produce wine, but all rely to some degree on external sales of the unprocessed grapes. The group has the potential to produce 17,850 dozen bottles of wine. The market for wine grapes and wine suggests static consumption and an over supply of some grape varieties. Research is indicating that vineyards of under 15 hectares tend to be low performing and that a clear focus on the managemn4t of the vineyard business is critical. A co-operative strategy may well be the way for smaller producers to achieve more efficient management (practices) and return on investment. From a wine marketing perspective, the YVSWG faces a great challenge in establishing a new brand in a crowded marketplace. However, if the group is able to work in a systematic, united manner - improved market penetration of individual brands is possible. Marketing success will be contingent on: (1) The quality assurance process to screen potential members and validate ongoing membership. All (accredited) wines from the producer can then bear the group’s branding. The primary purpose of such assurance is to maintain group integrity. (2) A sales/tasting outlet possibly using an existing facility in a central Yarra Valley location. (3) Budgets established and monitored. (4) Effective branding of YVSWG, to permeate all marketing decisions. (5) Pricing of any individual wine not exceeding $20 for unoaked whites, $25 for oaked whites and $30 for oaked reds (except for the occasional reserve wine). (6) Promotion through web page and links, strategic alliances with local tour companies, wine festivals and special events, promotional dinners and events, restaurants and one retail store - as well as a sustained media program. Advertising is not recommended. (7) YVSWG launch - a two stage process, launching the concept, then launching the initial wines once released. (8) Packaging must reflect the branding proposition. Quality design of the logo and branding will be a necessary investment. The SWGA has a choice of company, incorporated association or co-operative organisational structure with a company limited by guarantee being the preferred model. Of the three financial models developed, the model incorporating an initial joining fee then yearly membership fees and a levy based on sales is preferred. It is concluded that the formation of a SWGA is a feasible option for the nine participating growers.
Centre for Regional Development Reports
Swinburne University of Technology
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