WWW - World Wide Wine
By Sarah Diston | 4 June 2001
Fax machine vs Internet, it could be the biggest battle between traditionalists and modernists since the New World began to challenge the Old World's dominance of the wine industry. Despite a reluctance to accept the net, it is predicted that in 15 years time all supermarkets will be using some type of electronic B2B system. So will the web be the winemaker's ultimate marketing tool? Sarah Diston investigates.
It has been predicted that by 2005 the industry could be looking at a surplus of 200m litres of wine a year. And as consolidation in the industry gains pace and the bigger just get bigger catching or just protecting market share is going to become increasingly difficult, especially for the smaller and medium size producer.
The message a spate of B2B internet firms are pushing is that, in these tough conditions one of the most important things the web can offer is immediate access to a global market. Unfortunately even those web businesses with sound plans and a genuine message have been caught up in the well documented technology slump. Everyone is wary of the net at present, from potential investors to customers, and the conditions for convincing a sceptic wine trade to carry out transactions on the web could not be harder.
"The drinks trade especially the wine trade which is what we are focused on primarily doesn't move very fast," says Greg Rice, chief executive of the e-commerce wine trade exchange, Vineo.
"We are trying to support the current structures of the trade but make it function better."
E-commerce wine trade exchanges are cropping up everywhere and are primarily targeted towards buyers and producers wanting to target a global audience and a real time trading market, underpinned with credit and logistics facilities. The idea is that for a fee producers and buyers can confidentially buy and sell products on the market or the exchange under these competitive conditions.
However, for the web to be used efficiently and for producers or buyers alike to optimise its potential fully it must be seen as an integrated part of the business and not left to become isolated.
"We're not trying to walk in and change the way the industry does business overnight. We are trying to support the current structures of the trade but make it function better. As that starts to happen there will be efficiencies to be had and certain inefficiencies will drop away. It's an evolution process," Rice continues.
Another attraction the internet has is that it can never be switched off. As one market closes another opens. The opportunity to trade continuously to a global audience 24 hours a day, seven days a week, 52 weeks of the year isn't something producers can afford to ignore for too much longer.
"Most producers have internet connection. They are just slow in adopting it," says Michel Lemey, vice-president, sales and marketing at Global Wines & Spirits.
"When producers want to merchandise their products, they generally print a catalogue and price lists, which they combine according to the profile of their clients and the territories in which they are represented. A procedure like this is costly, complicated and cumbersome to manage," Lemey adds.
"Producers can centralise on a single screen all the information and transaction costs. It closes the larger and smaller organisations regarding access and technology. It [the web] has the potential to become a powerful tool of the wine industry," he continues.
"It's also extremely flexible. The web can be adapted to meet all sorts of needs because it can accommodate an infinite number of price/product/region/client combinations. Producers who printed a catalogue and numerous price lists can now adapt them as they like, without ever touching paper," he adds.
"Most producers have internet connection. They are just slow in adopting it"
However it is just this sort of radical departure from the norm that still pushes more traditional elements of the trade away and web marketers need to be wary of advocating revolutionary concepts such as the paper-free transaction too hard.
"A lot of people are very distrusting and [believe] anything that goes down a phone line or computer cannot be real. It's got to be something that's been tried and true. It's a difficult concept," comments Rice.
To a lot of people and businesses the web is still very much in its infancy but when it has been forecast that in 15 years time all supermarkets will be using some type of electronic B2B system to do most of their buying it could be time for the wine industry to realise that B2B is here, and whether we like it or not, it's here to stay.
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