Optimera: A rum business

fredag 27 januari 2017

A rum business

Dec 16th 1999

Bonnie Tonneson, who follows the wine industry at Hambrecht and Quist, an investment bank in San Francisco, says that the proper way to look at wine is as part of the luxury-goods business, rather than as a branch of the drinks industry. The market for expensive wine, she points out, is expanding—even if total consumption of wine is static or falling. And the buyers of expensive wine are exactly the kinds of consumers whom other luxury-goods industries are eagerly pursuing: middle-aged, affluent, interested in travel and the arts.
Ms Tonneson sees a parallel between baby-boomers' willingness to splash out on an expensive coffee at somewhere like Starbucks, and their interest in buying expensive wines with some sort of “story” behind them. Indeed the parallels between coffee and wine are telling. In a study of the international wine trade† published in 1995, Pierre Spahni argued that

distinctions between wines are often overdone for marketing purposes or sheer snobbery. Coffee, for instance, reveals striking differences in quality and taste—owing much to the same factors imparting character to the wines—yet it is only marketed under a handful of varieties and a few powerful brand names.

Yet since then the marketing of coffee has become more like the marketing of wine, as producers struggle to persuade consumers to pay more for a brand that tastes better, and is often linked to a particular place, region or even grower.
This sort of marketing is now spreading to other foodstuffs. A recent article about olive oil in a food magazine published by Waitrose, a British supermarket chain, would have a familiar ring to readers of the wine press: “Ten years ago, olive oil meant Italian. Now it could well come from California or Queensland.” The article also said that “single-estate and single varietal olive oils are much dearer but worth every penny.”

As international companies make inroads into the historically fragmented wine industry, further consolidation is in prospect. The next big move is likely to be the development of much closer links between California's and Australia's big firms. Companies such as Beringer, Mondavi, Southcorp and BRL Hardy have been circling each other fairly conspicuously in recent months.