Some discussions on the weekend have backed up the notion that we in the wine trade and wine industry are not moving with the times. For hundreds of years the wine sales chain was fairly standard: producer to middleman to licensee to consumer; simple and effective.

Our booming export trade of the 1990s funded a change in the makeup of our industry – winery buyouts, mergers and expansions. This change created middlemen on steroids – winery owned/controlled distribution arms with portfolios the size of War and Peace but did little to change the way the sales chain operated or influence the modus operandi of smaller producers.

Unfortunately, in the background other changes were afoot; to start with the world flattened and our export treasure chest customers started to get a taste for other countries’ offerings, products which have the distinct advantage of lower costs, causing the reigns of export growth to be pulled in. Added to this structural market transformations, most notably the growing dominance of supermarket chains in wine retail both at home and overseas, shifting the power even further into the hands of buyers.

Yet even with all of this going on, our domestic wine trade/industry and the way we look at selling wine domestically has remained static. Basically we haven’t equipped ourselves with off road tyres even though the terrain has gotten rougher.

My previous article looked at this in narrow terms, using big box retail as the example which I’ll do again. If our two liquor retailers can become national powerhouses in only 7 years, controlling 2 out of every 3 bottles of wine sold, then clearly they are doing something very right. They are taking lessons from the whole gamut of their retail, supply and producer experience and implementing them in liquor; they have become importers, producers, wholesalers and discounters because the traditional wine trade wasn’t there to offer sufficient competition. We are ineffiicent and worse, ineffective, leaving the door wide open for efficient and effective operators such as the chains.

We limit ourselves to the role we have been playing since time immemorial; producers produce, distributors distribute and licensees sell. Example: wineries steer clear of selling direct from their websites because “it’ll upset my distributor;” distributors don’t sell direct to consumers because “my retail customers will get annoyed.” Instead, some retailers and dozens of entrepreneurs have snapped up online liquor licenses and are enjoying double digit growth, low costs and an ever increasing market size (as more people shop online). Good on them, bully for the rest of us.

The rules have changed. The competition is smarter and more powerful than ever. But the world is flat.  The opportunities for sales are greater than at any time in history. The multinationals are awash with wine and doing a great job at devaluing their brands as they try and shift it, but they will improve and become increasingly dangerous as they spend their shareholders money hiring specialists and analysts.

For the rest of us it is time to look outside of the square, take a step back and open our eyes to the possibilities. Wine is a commoditised fast moving consumer good, no matter what oak it’s aged in and how many generations of family have been making it. Look at the national and global wine trade as an economist would look at any competitive FMCG marketplace.

Producers can sell to whomever they want. Distributors can do the same. Secondary brands, bulk wine, BOB, export packaging, banner group agreements, hotel chain agreements. Supplier – distributor partnerships. Inflate list price to deal back later. Incentivise. Seek advice from experts in different industries. The possibilities are endless, but they need initiative to grasp and implement them.

Let me end on this, something I heard a few years ago (and please correct/extend if you know more): when designing their super winery in the Barossa, Wolf Blass Wines looked outside the square. Instead of asking ‘how will we get our ferments from all around our large winery into the presses they said what’s the most efficient way of moving very heavy loads around a worksite?’ They figured that since miners do that every day, they’d talk to a mine engineer – who ended up helping them design the winery using transferable techniques developed in mining industry. That’s thinking outside of the square. That’s using expertise from another industry. That’s what we need more of today.