just the answer – New Zealand Winegrowers
Last month, ex-Brown-Forman exec David Cox became Europe director for New Zealand Winegrowers. He spoke with Chris Mercer about what attracted him to working for a generic body and about New Zealand's potential for further growth in Europe.
just-drinks: Your job prior to this was head of Brown-Forman's wine division in Europe. What interests you about working for a generic body and how important is the role of generic marketing in the era of big brands and companies?
David Cox: Generic bodies help to bring the whole category up. With the support of the trade, they can help consumers who are wanting to find a way through this myriad of wines. Brands within that message can get still get the benefits and so it is marketing dollars well spent. That's why Pernod Ricard and Foster's still support generic programmes.
j-d: New Zealand's wine industry remains very young. What growth opportunities do you see for the sector?
Cox: It's true, if you think that in Marlborough hardly anyone was producing 30 years ago. I think we need to be very careful on positioning. In the UK, we have got to be existing at and above GBP5.99 - that's still a sweet spot in the market.
We can grow in other markets that have not been exploited in Europe, but we don't need to grow by dropping to wine discounting. Promotions are the order of the day, but we have got to be careful of this.
j-d: Which export markets in Europe are the most attractive for New Zealand wine?
Cox: I think Scandinavia, so Sweden, Norway and Denmark. I believe that there is potential in Germany, if we can stick it long-term. It is a long-term view, but Germany could potentially be a greater wine market than the UK in the next 10 years. New Zealand wines are there at EUR10 and upwards. It will remain small volumes for the next few years, but New Zealand is starting to get a reputation like we did in the UK.
j-d: Would you attempt to sell New Zealand Riesling to the Germans?
Cox: I think you would have a tough time selling New Zealand Riesling to Germany. Some of our reds are more likely to do well there.
Cox: Eastern Europe remains a very young market. I'll be advising New Zealand companies to be relatively cautious there for now. We should not try to be all things to all men. We should be targeting key markets where you can establish an image.
David Cox, Europe director at New Zealand Winegrowers
j-d: New Zealand Winegrowers' CEO, Philip Gregan, is confident of reaching NZ$1bn of exports worldwide for the first time in 2009. So, has the recession in key markets like the UK passed you by?
Cox: We are not suffering in that way. We have been growing sales here with price per bottle up GBP0.15, before the duty tax rise is added, and that's with people watching the pennies. People are happy to spend when they know they are getting the quality.
We are still only 2% of the market, but our goals are not volume led. We have got to be demand-led rather than supply-led.
j-d: Do you feel that you have most of the industry on-side with that message? Does Pernod Ricard, for example, which accounts for more than a third of New Zealand's total production, understand this point of view?
Cox: Pernod Ricard have been hugely supportive. They are happy to pay their share of membership costs to us and I believe they do understand what we are trying to do, that volume needs to be carefully managed.
j-d: In terms of the wines themselves, which styles do you see driving further growth for the industry?
Cox: Sauvignon Blanc is 70% of our volumes, but I believe that there is more growth there. Our rising stars are Pinot Noir - we get particularly good regionality with Pinot Noir - and also Syrah. On the aromatics, Pinot Grigio perhaps has more potential than Riesling. But, let's not forget Chardonnay, which is still the world's favourite grape."
j-d: New Zealand's wine sector is seen as being at the forefront of efforts to improve sustainability and protect the environment. How important is that as a selling point?
Cox: We know that sustainability is an overused word in the industry, but we have got to talk more about that, and this is one of my focus points going forward - to talk more and to raise the noise on that. When it comes to these things, we need to show that we are just trying to produce, that we are trying to do the right things.
j-d: Lastly, this job means that you'll be going head to head with your twin brother, Michael, over at Wines of Chile. Is the family still talking?
Cox: Yes, it should be interesting, and we've spoken on the phone since I took the job. Michael's done a great job over there, so I'll be trying to emulate his success.
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