Treasury Wine Estates ‘retiring’ 30% of its products

Treasury Wine Estates is in the process of ‘retiring’ 30 per cent of its 3000 product lines, though the company has no plans to sell any of them.

The company’s chief executive told the SMH that he is aiming to have the task completed by half way through this year.

The idea is to hold onto the product lines with the option of re-introducing them at tactically advantageous times in the future instead of selling them.

The large number of product lines stretch across more than 100 brands which Treasury Wines now owns. That number increased by 25 after the acquisition of Diageo’s US wine business of British which came into effect at the beginning of this year.

Last week, Treasury announced that its first-half earnings increased 72 per cent to $146.8 million; and that its net profit after tax increased 42 per cent to $60.6 million.

Australia & New Zealand reported Earnings Before Interest, Tax, SGARA and material items (EBITS) growth of 6 per cent to $46.7m, driven by solid volume growth in a flat overall wine market in Australia.

Wine Solutions from Spray Nozzle Engineering

Spray Nozzle Engineering, a leading Australian spraying solutions company, has a long history of providing solutions to the wine and beer processing industries in Australia and New Zealand.

From stainless steel washdown and tank cleaning systems, to wine racking equipment, Spray Nozzle Engineering’s support of local industry expands more than 30 years.

Strahman washdown guns are certified with the Smart Approved WaterMark. Their washdown solutions are powerful and water-saving. Add their stainless steel hose reels, and food grade hose for a complete washdown solution.

Spray Nozzle Engineering’s CIP solutions for the wine industry combine exclusive Gamajet Alfa Laval tank cleaners, and their own innovative, engineered products.

Gamajet tank cleaning machines, such as the GentleJet™, are powerful, yet gentle on toast, making them ideal for larger vessel and tank sizes. For smaller sizes, Spray Nozzle Engineering has designed and patented their M Series tank cleaning heads. Originally designed as a replacement for spray balls, they are fast, efficient and effective.

The Rack-it-Teer™ is a precision stainless steel spear wine racking solution, with patented locating finger and ‘positive-seal’ system that allows filling, decanting and oxygen purging without wasting gas. Rack-It-Teer™ adapts to all barrel sizes, making it extremely versatile.

In addition to supplying equipment to the wine industry, Spray Nozzle Engineering also repairs and services tank cleaning equipment in their Centre of Excellence service centres in Melbourne and Hamilton. This allows for fast local service that minimises downtime and costs, with loan heads available to approved customers.

Australian wine exports increase by 14 per cent to $AUD2.1 billion

The Wine Australia Export Report for December 2015 shows that the value of Australian wine exports jumped 14 per cent to $AUD2.1 billion in 2015, reaching its highest value since October 2007.

Wine Australia CEO Andreas Clark said “Pleasingly, our latest Export Report shows that the value of Australian wine exports grew in each of the top 15 export markets in the year ended 31 December 2015.”

“This export growth should be warmly welcomed by the Australian grape growing and winemaking community as it is largely a result of their hard work.”

This is the first time that there has been growth in each of the top 15 markets in a calendar year, with the strongest growth being in China, which grew 66 per cent to $AUD370 million.

The value of exports increased at each price point and the largest increase was in wines with a free on board (FOB) value over $10 per litre. Sales of these wines grew by 35 per cent to a record $AUD480 million. They now make up 23 per cent of the value of Australia’s wine exports.

Bottled wine has been the key driver of the export success. Bottled exports increased by 17 per cent to $AUD1.6 billion and the average value increased by 7 per cent to $5.20 per litre. This is the highest value since 2003 on a calendar year basis.

There were 1,517 active exporters in 2015 (up from 1,395 in 2014) and Australian wine was exported to 122 destinations. 

The top five markets by value are:

1. USA, which increased by 4 per cent to $443 million
2.   UK (Australia’s number one market by volume), which increased 0.2 per cent to $376 million
3.   China, which increased 66 per cent to $370 million
4.   Canada, which increased 7 per cent to $193 million, and
5.   Hong Kong, which increased 22 per cent to $132 million.

Alcohol companies target the 20% of Australians who drink 75% of the alcohol

Researchers have known for a long time that alcohol consumption is quite concentrated in a small part of the population. They argue about the exact distribution, but there is substantial agreement that, so long as alcohol sales are not heavily restricted, consumption is distributed in a quite predictable way. That is, there are many light and moderate consumers, along with a long tail of those drinking at heavier levels.

In Australia, the top 20% of the drinking-age population in 2013 consumed around three-quarters of all the alcohol consumed. The top 5% consumed more than a third.

The concentration of alcohol consumption among the heaviest drinkers has actually increased in recent years. The top 10% of consumers accounted for 49% of the consumption in 2001, and this had increased to 53% in 2013.

The heaviest-drinking 20% of the population reported consuming a daily average equivalent to 43 grams of pure alcohol – a bit over four standard drinks. This is a substantial underestimate of their actual drinking.

The total amount of drinking reported in such surveys is calculated to be about 55% of the alcohol sold in Australia, so their actual daily average is likely to be about 7.8 drinks. This is nearly four times the low-risk limit of two standard drinks per day recommended by the National Health and Medical Research Council.

The dangers of alcohol

If you drink enough alcohol, you get intoxicated, making you unfit for a lot of everyday activities. This includes, for instance, driving a car, most kinds of work or looking after children. Apart from these issues of injury and social functioning, alcohol also carries longer-term health risks.

At an average of four drinks per day, the chances of dying of an alcohol-related cancer or other chronic disease are four in 100 for men and 4.5 in 100 for women. At 7.8 drinks a day, the chances are about five in 100 for men and eight in 100 for women.

Adding in risks of dying from alcohol-related injuries more than doubles the risk for men, and increases the risk for women by more than 50%. Just considering the risks of health and injury harms, alcohol is by far the riskiest commodity that a majority of us regularly consume.

The current guidelines “to reduce health risks from drinking alcohol” set upper limits calculated on lifetime death risks from drinking. These are around four times the rate National Road Safety Strategy aims for as an upper limit of lifetime rate of deaths from traffic collisions. They contrast, for instance, with the National Health and Medical Research Council (NHMRC) guidelines on water safety, which aim to keep the risk of death from contaminated drinking water below one in a million.

Alcohol marketing

Those in the business of selling alcohol have long known about the skewed distribution of alcohol consumption in the population. In meetings among people in the industry, those at the top end of the distribution are called the “super consumers“, and they are vital to maintaining or increasing sales.

If all the “super consumers” reduced their drinking to the two-drinks-a-day average recommended by the NHMRC as an upper limit, it has been calculated, based on self-reported consumption, that alcohol sales would fall by 39%.

In its public face, the alcohol industry takes the line that it is only seeking to protect and promote “responsible drinking”: how to “drink properly”, minimising risks of harm.

But, in its internal discussions of the need for retailers to “identify and target super consumers”, the industry is acknowledging a large part of its sales are to drinkers who are taking substantial risks with their own lives and the lives of those around them. If all drinkers in Australia were to drink within the government guidelines for low-risk drinking, the alcohol market would shrink substantially.

If governments want to reduce alcohol-related harms, they can’t rely on the industry’s commitment to responsible drinking. It’s directly against the industry’s interests for the heaviest drinkers (who make up the majority of their sales) to drink less.

Given this inherent conflict, policymakers should focus on well-evaluated policies such as reduced late-night trading hours for pubs and nightclubs and smarter taxation of alcoholic products. Most importantly, governments should be sceptical of working in partnership with an industry whose interests are diametrically opposed to public health.

The Conversation

Robin Room, Professor and Director, Centre for Alcohol Policy Research, La Trobe University and Michael Livingston, Post-Doctoral Research Fellow at The Centre for Alcohol Policy Research, La Trobe University

This article was originally published on The Conversation. Read the original article.

Sassy Cider – L’inimitable

Product Name: Sassy Cider – L’inimitable

Product Manufacturer: Maison Sassy

Launch date: Late Dec '15- Early Jan '16

Ingredients: 22 Varieties of Apple Juice (Fermented), Sulphites

Shelf Life: 18 months

Packaging: 330mL & 750mL glass bottles

Product Manager: Noble Spirits

Country of origin: France

Brand Website: https://www.maison-sassy.com/

Describe the product: L’inimitable shows a perfect balance between the dry of a dry cider and the fruit of a semi dried cider. Characterised by an aromatic complexity and delicacy, this cider, served at 8°, is a perfect match for an aperitif or to go with meat, cheese (Camembert, Pont l’Evêque) or an apple dessert.

Contact Email: info@noblespirits.com.au

New Scotch whisky rolled out in Australia

Launching in Melbourne this month ahead of its global rollout, Pure Scot is the first Australian-owned whisky distilled traditionally in the southern Lowlands of Scotland.

Pure Scot Blended Scotch Whisky is the perfect balance of provenance and progression. Contemporary and fresh – combining unique Bladnoch Single Malt, robust island malts, aged Speyside and Highland malts and select grain whiskies.

The expertise and passion of Pure Scot’s master distiller Ian Macmillan is reflected in every drop – delivering a crisp, smooth, authentic taste – adaptable to many drinks and occasions. Evoking 200 years of heritage, Bladnoch Distillery – home to Pure Scot – has resided on the Bladnoch River since 1817.

Pure Scot is the vision of successful Australian businessman David Prior, bringing a modern interpretation to a category steeped in provenance, but in a younger and more accessible way.

"It's a highly adaptable, versatile, contemporary-tasting product, not smoked, it's really for the younger consumer,” Prior said.

Former CUB boss John Murphy, who has teamed up with Prior says Pure Scot hopes to lure new consumers – mainly in the 25 to 30 year bracket – into the Scotch whisky category by reinventing Scotch as a social drink, rather than a elitist beverage.

"The beauty for us with Pure Scot is we don't have to be protecting and defending. We can come in and actually blow the hell out of this thing. We don't have to worry about those rules. We can play with any rules. We can talk to customers and consumers differently," Murphy said.

Fruity, with a hint of gobbledygook: it’s time to give up on wine wankery

Barnyardy. Herbacious. Unctuous. Chewy. Hedonistic. Ponderous. Shallow. Backward. The wine industry has been using evocative descriptors to characterise the taste and aroma of its products for generations. But how does the industry justify such precise language to describe such a subjective experience?

Especially given empirical research, which has demonstrated that the average consumer struggles to recognise descriptions of the wine that experts identify on the label, it is likely the wine industry alienates consumers more than it attracts them.

Furthermore, although wine experts use a larger vocabulary to describe wine, and discriminate between two wines more effectively than novices, a body of evidence suggests that wine expertise is a questionable label with respect to the degree of rating variability in wine judging.

This plight of wine label irrelevance afflicting wine consumers is typically met with the response of a need for wine education, according to the wine sector. Is it that such consumers are simply out of touch with the wine industry, or is it that the wine industry is out of touch with itself?

We believe the evidence clearly points towards the latter. Welcome to the concept of Wine Wankery.

Previous studies (such as these, by Spawton, Hall & Winchester, and Geraghty & Torres) have suggested there are three to four types of wine consumer:

  1. Connoisseurs or enthusiasts – those who know a lot about wine
  2. Enjoyment-based or casual wine consumers – those who enjoy quaffing their wine and are not too fussed on impressing anyone with it
  3. Risk averse or value seeking wine consumers – those who do not know a lot about wine and look for special offers
  4. Image conscious or aspirational wine consumers – those who are not experts in wine and are insecure about their lack of knowledge.

While there is limited evidence on the proportions of the population that make up each of the above groups, the limited evidence available suggests that fewer than one in five wine drinkers are connoisseurs. It is clear that most wine drinkers are not particularly sophisticated, suggesting that overly complex wine labels are irrelevant to most of the market.

The reality of the market is that most wine consumers are likely to seek a more simple explanation of what they drink. Most people are interested in wine being cheap, and tasting reasonably good. The UK’s biggest selling wines are big brands, and these are mainly sold through the major supermarkets.

Brands such as Yellowtail, Jacob’s Creek and Hardy’s show that the majority of consumers are not into expensive wines nor are they enthusiastic oenologists. Moreover, consumer purchase patterns that hold true in FMCG (Fast Moving Consumer Goods) markets also hold true in those where consumers purchase wine. It may be a surprise to many that bulk wine brands are likely to get more consumer loyalty than boutique, expensive brands.

Given that wine operates in a market just like any other consumer product, why does this industry put so much effort into Wine Wankery?

 

nocturnika

 

When you read wine magazines or a wine industry journal, ironically much more page space is dedicated to the premium and boutique end of the market. This segment actually represents a disproportionately smaller portion of the wine market in sales volume.

The proportions vary by sales format, but somewhere between 1% and 20% of sales volume is attributed to the premium end of the market. On the other hand, the high volume brands get almost no coverage in wine magazines and journals, yet these brands are responsible for most of the sales. Most people appear happy to describe wine in one or two words. But those who write about wine need to fill space in a wine magazine, so two words isn’t nearly enough detail.

Perhaps wine that’s made to a formula is just not as sexy … Or is it simply that at the high volume end of the market, the consumer isn’t interested in wine descriptions? The appeal of wine is in its diversity and nuance, which attracts people to the category.

 

Ula Peiciute

 

Even across social media, the wine industry works toward the few customers who are enthusiasts or connoisseurs. This year, successful wine apps Vivino, and Delectable, which have millions of subscribers, began releasing data on users’ behaviours. Both of these apps use label recognition from the user’s phone to reveal information on the wine being photographed, as well as reviews from other users. These are game changer apps because the user doesn’t need to put the data in manually, unlike previous wine apps.

These millions of consumers may sound like a lot of users on which claims on wine market trends can be made. The problem with these app owners releasing data on their users’ behaviours is that their users aren’t “typical” wine consumers. A recent example from digital trends, on the Delectable app illustrates the situation.

If the industry was to use customer profiles and data on usage from these apps, it would be easy to believe that Growers Champagne and Loire Valley reds are the big trends in the wine market. Given that most subscribers on delectable reside in the US, you’d be forgiven for thinking that small producers of lesser-known wines were storming into households all over the country.

But, the latest Impact data on the US market shows that sweet red wines are still a fast-growing category, also that New Zealand Sauvignon blanc has grown almost 20% over the past year, and Prosecco sales being the big increase in the segment of foreign sparkling wine category.

What these results show is that these app users are more likely to resemble the small proportion of connoisseurs, and that any analysis from these apps will encourage the industry to be more out of touch with their assertions with respect to real wine drinkers.

Most consumers have probably had enough of wine wankery, and it’s probably time the wine industry got to terms with the fact it’s just another consumer product like any other.

The Conversation

Maxwell Winchester, Discipline Leader, Marketing , Victoria University and Damien Wilson, Programme Director, MSc in Wine Business, Burgundy School of Business

This article was originally published on The Conversation. Read the original article.

Taylors sweeps the awards at Great Australian Shiraz Challenge

Family-owned, Clare Valley winery Taylors Wines has stolen the show with its 2014 Taylors Estate Shiraz, taking top prize for Best Australian Shiraz as well as Best Australian Shiraz under $25 at the nation’s premier shiraz competition, The 2015 Great Australian Shiraz Challenge.

Receiving a score of 19.5 from the esteemed judging panel, the trophy-winning Estate Shiraz is one of The Challenge’s highest scoring wines in the competition’s history.

This is the second time in The Challenge’s history that a single wine has received both trophies on offer at the competition.

Third generation Managing Director Mitchell Taylor is proud to be receiving such a prestigious accolade.

“We are thrilled with the result. These award wins are a credit to the hard work and dedication of our vineyard and winemaking teams who craft top quality wines across our entire portfolio,” Mitchell said.

Now in its 21st year, The Great Australian Shiraz Challenge has become Australia’s pre-eminent and valuable single class wine competition. 

The Challenge was established by the winemakers of the Nagambie Lakes region who laid down a challenge to determine Australia’s best shiraz producers. Wines entered are classed and tasted based on climate and regional points of difference, ensuring all entries are judged fairly and objectively.

The Challenge has proven to be a very successful show for Taylors Wines. It first received the People’s Choice Award in 2000 for the 1997 St Andrews Shiraz, taking the top trophy for Best Australian Shiraz the following year with the 1998 St Andrews Shiraz. Taylors also received the trophy for Best Australian Shiraz under $25 in 2011 for the 2010 Promised Land Shiraz.

 

Passionfruit Pink Lady – Cheeky Rascal Cider

Product Name: Passionfruit Pink Lady
Product Manufacturer: Rebello
Launch date (must be in the last 3 months to be eligible): new product labelling in last few months
Ingredients (as listed on the packaging): Pink Lady Apple Juice (Fermented), Fermented Passion Fruit
Cane sugar, Sulphites
Shelf Life: 18 months
Packaging: 500mL amber bottles in 15 bottles per case
Country of origin: Australia
Brand Website: https://www.rebellowines.com.au
Describe the product: Made with Victorian grown pink lady apples and real passionfruit, Passionfruit Pink Lady was created as a limited edition range to the Cheeky Rascal Cider family on the back of Cheeky Rascal’s loyal followers who it canvassed asking them to identify fruits they’d like to see blended with cider.

Diageo loses its love of wine amid sale rumours

Alcohol giants Diageo, owners of Jonnie Walker and Ciroc vodka are looking to offload their wine division.

“Diageo fell out of love with wine following the great recession of 2008-09 when it saw that the category could not offer the returns it was looking for,” Jeremy Cunninton, senior Alcoholic Drinks Analyst at Euromonitor International.

Brands including Blossom Hill and Piat d’Or will likely be sold off to Australian wine maker Treasury Wine Estates.

The deal for Diageo to sign with Treasury has not be confirmed as of yet but if Diageo signs that dotted line they will join Treasury wine brands Penfolds, Wolf Blass, Lindermans and Matua.

“The main benefit for the buyer (Treasury Wine Estates) will be Diageo’s US wine assets with the premium and brands such as Sterling Vineyards, which will greatly improve Treasury Wine Estates generally low value US portfolio” Cunninton said.

The CEO of Diageo has been under some pressure to offload the wine sector of the company, as it is estimated to only make up around five per cent of the global revenues.

“The fact there is a sale now may in part be due to some pressure to sell, but it is more likely there was someone willing/able to offer a suitable price,” Cunninton said.

BDC launches the Master Distillers’ Collection rum

The Bundaberg Distilling Company (BDC) has released the Master Distillers’ Collection (MDC) Black Barrel – Distilled 2005 rum. 

This premium rum celebrates the Bundaberg Black legacy, exhibiting the richness, depth and character that are the staples of the Bundaberg Rum Black Barrel range and is set to launch at The Spirit of Bundaberg Festival in October.
 
MDC Black Barrel – Distilled 2005 rum has spent the last decade ageing in American White Oak and was finished in small, heavy charred barrels. The result is an enticingly sweet rum that has been barrel matured for longer than last year’s MDC Black Barrel – Distilled 2004, making it smoother whilst retaining a deep red lustre that is reminiscent of the glow of burning cane fields of yesteryear. 

The result is a premium, full character old aged dark rum featuring notes of deep caramel and sweet raisins, making this a well balanced treat for the palate.
 
The type of barrel is key to the rate at which a rum matures and the number of different barrels used by the BDC, results in the Master Distillers’ Collective (The Collective) regularly undertaking checks of the ten year old reserves on site to assess which batch is maturing best.
 
Senior Brand Manager for Bundaberg Rum, Duncan Littler, comments; “The Collective is dedicated to creating premium rums that embrace and celebrate the rich and diverse history of rum. MDC Black Barrel – Distilled 2005 has been barrel matured for longer creating a delectable rum, even smoother than its predecessors in the range.”

Available in 700ml bottles, each MDC Black Barrel – Distilled 2005 (40 per cent ABV) also carries a unique number.
 

 

McGuigan scoops 2015 Riverina wine show

The 41st annual Riverina Wine Show results have been announced and as in previous years the entries and winning wines have celebrated the depth of quality and diversity in the Australian wine industry.
 
The big winner of the night was the 2007 McGuigan Bin 9000 Semillon (Hunter Valley), which was awarded the ‘Ian Bicego Best Still Wine of Show’ Trophy. 

Chair of Judges Sophie Otton said, “The McGuigan Bin 9000 showed the variety’s slow, controlled development; the kind that tantalises the senses with its lemony fragrance and glimpses of melted butter and toast complexity. This year’s winner absolutely embodied the exhilarating effortlessness and featherweight grace that is Semillon at its best.”
 
As well as strong entry numbers and some great results in the more traditional classes of Semillon, Shiraz and Cabernet, the judges were also “delighted” to see such diversity amongst the ‘Other Red Varieties’ Class, describing it as “a strong class which proved an exciting category, with expressive and skilfully made examples of Durif, Montepulciano, and Petit Verdot all made locally.” 

Commenting on other wine styles to look out for, Otton said, “The ‘2014 Pinot’ Class was an unexpected surprise. On the table, the wines awarded silvers and golds demonstrated a superb graduation, from fruit driven freshness and balance, building to increasing dimensions and layers of flavour, with the top gold showing superb multifaceted complexity. 
 

Less is more when it comes to Aussie rum

Stuart and Simon Griffith, part of the team behind the creation of the new Substation No. 41 Rum, talk to Food Magazine about rum making, and the challenges of the Australian beverage industry.

Food Magazine (FM): How has the rum changed over recent years?

Simon:  I think the general drinking culture has changed on the whole, not just with rum.  It is very noticeable across the board with all aspects of liquor; beer, wine and spirits that the Australian market is becoming more attracted to the social aspect of drinking and the eventual quality of the drink in their hand.  It is certainly less evident that the consumer is drinking for the affect of the 'grog'.  

Alcohol and the Australian culture go hand in hand.  During Australia's penal era, rum had been used as currency and it has been suggested that the colony's inhabitants drank more alcohol per capita than any other time in human history.
Nowadays Australia's love affair with rum may have changed, but it is still there, it's just different.  As the country has evolved, so has the alcohol consumption and palate of the 'everyday citizen'.  Less is more and quality is everything.
 

FM: You say that rum is undergoing a “strong renaissance.” Why is it seeing an increase in popularity?
 

Stuart:  Spirits tend to follow a cycle of popularity and it just so happens that rum is seeing a huge spike in its fortunes that spirits like gin, vodka and whisky have had over the past twenty years or so.  
Rum has often been categorised as a working class drink, which hasn’t been helped with stories of pirates and naval crew downing large amounts for 'Dutch courage' in the face of terrifying situations.  I think the consumer has looked past these old anecdotal stories and made their own choice.  
Rum can work on every level and doesn’t seem to discriminate like maybe other spirits do.  Its versatility is its strength, it doesn’t matter what your gender is or your budget, it appeals to all walks of life for completely different reasons.  And yet, when you strip it all back you find that its unique power is that it makes everyone equal. 
 

FM: Are Australian drinkers more educated about rum than before?
 

Stuart:  Yes, they absolutely are.  The liquor market has definitely become a 'buyers market'.  The customer is now in a position where they can ask a question about a product they are buying and not fear a reprisal from the person serving them.  
Also with the advent of the Internet and information at the fingertips, customers more than ever can research before buying.  It’s not uncommon for costumers to visit us at the Substation No. 41 Rum Bar with a list of the rums they may want to try during an evening.  They have information on the rum, pros and cons, a tasting profile, prices etc.  Our job is to help them choose the right rum for them, for the right reasons.  Ten years ago, punters came into the bar with less pre-conceived ideas and were generally happy to get what they were given.
 

FM: In a market saturated with imports, how can Australian spirits compete?
 

Stuart:  It's really important to not try and be something your not.  There are so many amazing spirits on the market from a whole heap of international destinations.  So many of these spirits tick all the right boxes and are perfect in so many ways.  The key is to not try and replicate what someone else is doing really well and do your own thing to the best of your ability.  It is the Australian way to barrack for the underdog and give everyone a fair go and so if you apply these fundamental values of Australian culture to making quality spirits then it can be an easy recipe to follow.  Home grown ingredients coupled with this beautiful climate, love, tenderness and hard work and the end product can be a liquor that everyone can be proud of and sold at a reasonable price.
 

 

New verification technology to be used for food exports

DataTrace technology is set to be used for Australian export food & wine authentication, Security & Safety.

DataDot Technology Limited (DDT) says it is pursuing opportunities in the growing export food and wine authentication market through its newly established joint venture with Beston Pacific Group. 

DDT and Beston subsidiary company, Grape Ensembles (GE), have jointly established Brandlok Brand Protection Solutions, and over the next nine months Brandlok will develop labels and other devices to authenticate and provide information on wine, dairy, seafood, health food and meat products to be exported to China, Southeast Asia, the Americas, Europe and Middle East. 

DDT has granted an exclusive 5-year licence of its DataTrace authentication technology to Brandlok for incorporation into the labels and devices to prove authenticity for these exported products so that customers can track and trace the ingredients from paddock to plate and verify for themselves that the products are safe to eat.

Bruce Rathie, Chairman of DDT, said that the Brandlok joint venture and its arrangement with the new company BGFC focused on food exports to China and other markets represents a significant opportunity to capitalise on major concerns regarding food security, safety and counterfeiting in these emerging export markets.  

“We have seen a number of food and other product counterfeiting issues especially in places like China.”

“This technology is a mixture of labels, barcodes and apps that can be used on mobile devices allowing them to check the authenticity of what they are buying,” he said.

 

Pure Blonde gets a carb make over

Pure Blonde, the original low carb beer, has had a makeover, now boasting an even lower carb content.

 Called ‘Pure Blonde Ultra Low Carb’, it’s a lager that contains 80% less carbohydrates than regular beer. 

According to Carlton & United Breweries, with 30% less calories than a regular beer; and 50% less calories than wine (per mL), it is “the perfect tipple for men and women who live a healthy balanced lifestyle.”
 
The first ultra low carb, lower calorie, and low gluten beer on the market, Pure Blonde Ultra Low Carb Lager contains no artificial additives or preservatives, the brewer said.
 

Cellar doors hold selling power for wine brands and regions

New research has shown that a visit to a winery's cellar door has a lasting effect on consumer behaviour, influencing their buying habits for months afterwards.

The Ehrenberg-Bass Institute tracked behaviour of more than 3,300 visitors to 79 cellar doors across Australia over a six-month period. The results reveal the power of the cellar door in promoting a winery or region's brand.

During the six-month period after a cellar door visit, the buyer group (54% of visitors) bought an average of 9.1 bottles of the winery's wine, and the likelihood of making future purchase is 47% on average.

Most importantly, 16% of cellar door visitors who had never bought the brand before began buying it after a visit – this gain can be directly attributed to the cellar door visit and experience.

Reasons for not buying wine include already having a stock at home (25%), preference for other wine brands or styles (20%), and non-availability of the wines at their usual retail outlet (15%).

After a cellar door visit, most wines are bought from large liquor chain stores (33%), but visitors also revisit cellar doors and buy wine (23%). The cellar door channel (including mail order and wine clubs) made up 31% of wine purchases.

Members of wine clubs buy 2.5 times more wine than non-members – about 15% of visitors to a cellar door were members of its wine club.

By the time six months had passed, 47% of visitors had consumed all the wine they bought at the cellar door. 68% consumed it at home.

A cellar door visit also changes patterns of wine consumption in consumers, encouraging consumption of higher quality and more expensive wines. Consumers were more likely to consume wine from the visited region, and their general consumption rose significantly.

The power of word-of-mouth is also increased by a positive visit to a cellar door. 83% of consumers who visited a cellar door recommended a visit to friends, family or work colleagues within three months of visiting, an average of 3.4 times.

Lead researcher Professor Johan Bruwer from the University of South Australia's Ehrenberg-Bass Institute said that the research shows a cellar door visit has a much wider impact beyond simply counter sales on the day.

“The question is how powerful is the effect of awareness, tasting, and overall experience at a cellar door in influencing future purchase behaviour of that brand. This project provides a measure of that impact across a significant period of time after that visit,” Professor Bruwer says.

“The cellar door does something quite special, it can give the brand a good story if those who visit and taste the wine have had a good, authentic, and memorable experience. People who visit a cellar door also become more educated about the wine region and this increases the consumption of wines of that origin.”

 

TWE reworks supply chain

TWE has put the Ryecroft winery, T’Gallant and Bailey’s properties up for sale as part of its strategy to focus on fewer brands.

The winemaker is making significant changes to its supply chain network in the USA and Australia and has identified further opportunities to reduce its overhead cost base.

TWE plans to accelerate its focus on the Luxury & Masstige versus Commercial portfolios globally, by making significant changes to its supply chain network and cost base in both the USA and Australia.

Australia

The packaging and warehousing of wines previously processed at Karadoc near Mildura Victoria, will now occur at TWE’s state of-the-art Wolf Blass facility in the Barossa, South Australia. The phased closure of packaging and warehouse operations at Karadoc is due to be completed during fiscal 2016.

As a result, the utilisation of the Wolf Blass packaging and warehousing facility will be significantly enhanced.

Furthermore, Commercial wine currently processed at TWE’s Great Western and Wynn’s Coonawarra facilities will be transferred to the Karadoc site, with Karadoc to become exclusively focused on the production of TWE’s Australian Commercial wine portfolio.

At the same time, the processing of Masstige wine at Great Western and Wynns Coonawarra will be transferred to Wolf Blass. This will, in turn, result in increased luxury wine processing and warehousing capacity at these sites.

United States of America

In the USA, TWE will consolidate its production facilities such that TWE’s Asti winery in Sonoma County, California, will become surplus to the company’s production needs.

Asti's wine production will be transferred to other wineries within TWE’s network, with the majority of Commercial and Masstige wine production transferred to Paso Robles and Luxury wine transferred to Beringer. This will increase utilisation at both facilities.

Collectively, these steps will further facilitate TWE’s separate focus on the Luxury & Masstige versus Commercial portfolios in the region.

Finally, packaging lines at TWE’s Napa Bottling Centre (NBC) are being consolidated to further optimise production efficiency.

Expected outcome of supply chain optimisation

These initiatives are expected to be complete by the end of fiscal 2016. The supply chain network optimisation benefits are not immediate, rather they are recognised through Cost of Goods Sold (COGS) at the time wines are sold.

As a result of actions to optimise the Company’s supply chain, TWE expects to recognise a provision in fiscal 2015 for a cash cost of approximately $35 million. The COGS benefits from this initiative will ramp up from fiscal 2016 and reach $50 million per annum by fiscal 2020.

TWE plans to reinvest some of the savings from supply chain optimisation into the company’s Commercial portfolio globally, while at the same time improving TWE’s base business and delivering enhanced returns to shareholders.

Furthermore, the Company does not expect a net incremental increase in capital expenditure to result from these changes.

Overhead reduction program

As reported at the Company’s interim 2015 result announcement on 27 February 2015, TWE remains on track to deliver $35 million in cost savings in fiscal 2015, as part of an overhead reduction program previously announced to the market in May 2014.

Following additional work to ‘right size’ the Company’s cost base, a further $15 million in overhead cost savings has been identified and is expected to be realised in fiscal 2016.

Accordingly, TWE has raised an additional provision of $15 million to support these savings.

Michael Clarke, TWE’s Chief Executive Officer, said “I am very pleased that we, at TWE, are now embedding a cost conscious culture. Not only are the cost reductions funding the 50 percent uplift in consumer marketing in fiscal 2015, the savings are also supporting actions to improve the quality of TWE’s base earnings, while delivering profit growth for shareholders.”

“The changes announced today are significant ones for our business and demonstrate our commitment to delivering on the Company’s strategic roadmap. By continuing to reduce costs, and optimising the scale and efficiency of our supply chain networks in major production areas, TWE is well placed to pursue growth opportunities that exist for our wine brands in key markets around the world.”

 

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