Mumbles of Protectionism

"It's just not a level playing field," commented one winery owner during a coffee-break chat at the Ahead of the Curve seminar in early March hosted by Napa Valley Grapegrowers. When the panelists took a look at the success of low-priced wines coming into the US market from such countries as Chile, Argentina, Australia ... the hackles went up.

Just to stir the pot a little, yours truly asked the moderator a question about the desirability of trade barriers in light of the erosion of market share in the value-priced segment prompted by these international players vis-a-vis US producers. WOW. What a hot potato! The question was rapidly deferred, termed "political" (it's not -- it's an economics question too, by the way), and no further public discussion took place. But plenty of coffee-break discussion resulted!

It is a Catch-22. The good article posted March 2 on Decanter.com: "US wine exports break $1bn" was a great summary of the situation. "Nearly 55m cases of wine -- 90% of it from California -- were shipped last year, up 8% on 2007. By value, exports rose 6% to $1.01billion according to US Department of Commerce figures, " cited the article. That certainly represents a big boost to California winemakers. On the one hand.

On the other hand, what can be done to help U.S. winemakers who should compete head-on in the value-price segment? (And they should compete, given the high growth there...)

It is a God-helps-those-who-help-themselves situation. Clearly the marketing promotion for wines from Chile, Argentina, Australia et alia is superb: Traditional advertising (wine region based) in lifestyle magazines, travel sections, big newspapers. Wine tastings here, there, everywhere. Development of wine tourism. Reviews. Tweets. Facebook plugs. Blogposts. Price Promotions. Endcap displays. Paid trips for wine buyers to those countries, vineyards, wineries. Jeez, how can a US winery compete?

Here are some ideas: Traditional advertising (wine region based) in lifestyle magazines, travel sections, big newspapers. Wine tastings here, there, everywhere. Development of wine tourism. Reviews. Tweets. Facebook plugs. Blogposts. Price Promotions. Endcap displays. Paid trips for wine buyers to those countries, vineyards, wineries. Sound familiar? The approach is called "fighting fire with fire".

That's the best way to level the playing field. Get on it and fight hard! Use the power of your industry associations and AVAs to develop programs that will help. One caveat: fight fast. You must be nimble and speedy in marketing during a recession.

Oh by the way, you might do more with your internet sales. After all, you've got the shipping advantage here...