No vin for the bargain bin
How to sell your entire wine production in two hours – at a profit
SOUTH AFRICA’S wine market is no easy space these days, with a plethora of new boutique offerings competing with more established brands at a time when discretionary spending is being squeezed. Even major producers such as Distell and KWV are finding the competitive wine market a hard slog. For new and smaller producers it’s often difficult to offload wine production profitably – which, of course, may explain the array of “affordable” wines currently on the market.
However, well known winemaker Francois “Wing Nut” Naudé – until 2005 the winemaker and CEO of L’Avenir Estate – has seemingly stumbled on a novel way of profitably marketing an entire production load. Naudé – helped by his family – set out to make a premium range pinotage blend, drawing in wines from top Cape estates such as Hartenberg and Delheim.
Instead of taking the blend – branded as “Le Vin Francois 07” – to selective retailers and wine boutiques, the Naudé family decided to hold an auction to sell off practically all its stock (barring a few cases that will be auctioned for charity). In essence, they stripped out some exorbitant distribution and marketing costs, replacing those with a one-off event cost associated with hosting a black tie function for the well heeled and well connected in SA’s wine circles.
The auction concept might be perceived as a risky sales plot. Potential buyers on the night simply may not be in the mood to spend, especially since the Naudés’ event was crammed between the two big Cape wine auctions hosted by Nederburg and the Cape Winemakers’ Guild.
Fortunately, the auction – held in a fashionably rundown warehouse in Observatory – worked a treat, with the entire consignment of 135 cases sold in around two hours. On average, Le Vin Francois 07 fetched around R250/bottle – which ranks the new blend alongside established ranges from premium producers such as Meerlust, Tokara and Kanonkop.
One of the notable buyers was well-known restaurateur Alan Pick ( The Butcher Shop & Grill), who snapped up 60 cases. That at least means the general public – no doubt at a touch more than R250 – will be able to sample Le Vin Francois 07.
Naturally, swift sales were driven by buyers appreciating the rarity factor, realising only around 1 600 bottles of Le Vin Francois 07 will be in circulation.
Francois Naudé junior, who handled the marketing of Le Vin Francois 07, says with all the wine sold, the family showed a profit. “As we have very little overheads the net profit margin was quite good. And for us that was the launch issue and we really just didn’t want to ‘payin’.” He estimates the marketing costs for Le Vin Francois 07 were pegged at around 40% of turnover. “It was very important to put money behind our brand.”
By Finweek’s calculations the maiden run of Le Vin Francois generated sales of around R500 000 (including magnums and other “big” bottles). That’s not bad for one night’s selling. But the challenge for the Naudé family will be to replicate the “sold out” achievement by increasing production without compromising the wine’s “rarity factor”.
Currently, a production push looks unlikely, with Naudé pointing out that with this particular wine the family will definitely not be increasing production. “The rarity factor is critical to the sustainable success of the venture.”
However, Naudé says the concept has legs. “I think we successfully illustrated we’re serious about this endeavour and that we’re not in this for a quick buck.”
Whether the successful deployment of the Naudé family’s first batch of wine will prompt other boutique producers to follow suit will be interesting to gauge.
Naudé says he’s not sure if the wine auction concept will inspire others to follow a similar marketing route. “I really don’t know… but I reckon the risk issue is one factor that might deter quite a few.”
Rarity factor is key. Francois Naudé junior and senior