South Africa is world-renowned for its wines. For winemakers, however, the proliferation of wine estates means that they compete in a market crowded with 700 wineries that produce more than 10,000 different brands. Competing for retail shelf space typically means getting a place alongside 300 other brands – a wine lover’s paradise, but a wine producer’s nightmare.
Achieving targets means differentiating your wine from others, something that is easier said than done in a crowded market. But, says Ethel Nyembe, Head of Small Enterprise at Standard Bank, two wine producers managed to distinguish their brands from others and, in so doing, also created jobs in a region where opportunities are limited.
These points were covered in a recent episode of The Growth Engines, supported by Standard Bank and aired on Business Day TV. It explored just how a leading South African winery built its brand around a ‘family story’ and then, with a former magistrate, created a new business that built additional wine sales, and also created jobs. The common link between the two businesses is stories that have become an integral part of their branding and heritage.
For the Van Loveren Estate, owned by the Retief family, their heritage dates back to 1937 when the estate was established. Now unique, as it is the only major wine producer that is still family-owned, Van Loveren is one of only 15% of South Africa’s businesses that has remained in the family for three generations.
The fact that four of the Van Loveren owners are cousins and actively run different aspects of the estate, led to the creation of the Four Cousinswine range and its growth into South Africa’s leading bottled wine brand. Besides this signature offering, Van Loveren has also established a niche market for themselves with other wines that have been crowned with many of the industry’s leading awards.
“About 5% of consumers understand wine completely, while the remaining 95% enjoy wine, but don’t necessarily understand wine. You need to tell these people a story, something that gets to their hearts and imaginations.
“You need to be innovative and creative with what you are doing. You have to try and combine the strong points of quality, production and vineyards into a bottle, label or brand that appeals to the consumer, and that he or she can identify with and enjoy at the dinner table. Our Four Cousins brand tells a story and, over the years, has created interaction between the estate and the people who enjoy our wines. The most common question asked is whether there are really four cousins involved in the business,” says Phillip Retief.
Equally intriguing, is the story behind the joint venture between Van Loveren and former magistrate-turned-consultant, Antoinette Vermooten, whose determination to create jobs led to a meeting with the King of the Zulus, Goodwill Zwelithini, who visited Eikendal Estate near Stellenbosch at the wine farm’s invitation.
“The co-owner of Eikendal, Hansjuerg Saager, is a philanthropist who wanted to meet the King. He was driven by a desire to learn more about the rich Zulu culture and the history of South Africa. Together with the Zulu king and myself, he wished to identify ways that the meeting could be turned into an event that would lead to job creation,” says Ms Vermooten.
Looking for a differentiator led Ms Vermooten to think about a new wine range that would appeal to international markets and link buyers into South Africa’s unique heritage and rich culture. After some thought, The Prince, The King and The Queen wines of the Bayede! range were created. The ‘Royal’ trademark was registered, the first of its kind in South Africa, and the Bayede! brand was borne.
“‘Bayede’ is the Zulu word which means ‘hail the King’- a royal salutation that dates back to the time of Shaka, the great Zulu king. To make the wines unique and appealing to the international market, we decided that each bottle should be identified through Zulu beadwork that would hang around the neck of the bottle.”
Furthermore, Bayede! has the exclusive right to use the royal seal on all its products, as well as the legendary ‘by Appointment to’ and signature of the king on its range.
The Bayede! Wine Club was launched, in addition to the King’s Circle for those wishing to join an exclusive club and support the brand.
The relationship with Van Loveren began after it was realised that to make its presence in the market felt would require production facilities and a distribution channel that were beyond the capabilities of Eikendal. The Retief cousins were approached and the Bayede! story became a reality.
Because of the plethora of wines available in Europe and the USA, where wine shows can have up to 20,000 different brands competing for sale, Ms Vermooten decided that selling direct to retailers would be the best approach. Whilst visiting the USA, she decided that Walmart would be the obvious choice to start with. She met with key decision makers, told them the Bayede! story, and managed to sell the chain on the range of wines.
Ms Vermooten also secured a national listing with WM China for 400 of their stores, and while at a trade show of the Department of Trade and Industry in Brazil, secured a listing with Walmart in Sao Paulo.
A short five years later, and still enjoying the active support of King Zwelithini, the wine range has a market that has seen nearly 600,000 bottles sold internationally. It is available in 120 supermarket and liquor stores in South Africa. Business is booming, sales are climbing and 300 people are directly and indirectly benefitting from a job creation drive to produce the unique, colourful beadwork and products that makes each bottle of Bayede! stand out on shelves.
Ms Vermooten’s mission is to make Bayede! the number one internationally recognised brand in ten years.
“The success of Four Cousins and Bayede! clearly illustrates how stories around products can build a brand heritage that make products stand out in a crowded market. When building these legends, jobs are also created – a win-win situation for all involved. Success for the brand means prosperity for all. Nobody could ask for anything more,” says Ms Nyembe.
The Growth Engines can be viewed on Business Day TV (DSTV channel 412) on Tuesdays at 9:30pm, with repeats on Wednesdays at 10:00am and Thursdays at 2:00pm. For more information and to view in-depth articles on the key themes explored on the programme, log on atbizconnect.standardbank.co.za or bdlive.co.za/indepth/growthengines.
