Sharing the Harvest: The success of Canada’s Grape & Wine
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Transcript of Sharing the Harvest: The success of Canada’s Grape & Wine
Sharing the Harvest:The success of Canada’s Grape & Wine
Industry – A British Columbian Prospective
BC’s Grape and Wine Industry: introduction
an emerging force
over the past decade, the BC grape and wine industry has emerged as a significant new force in BC’s economy …lean…clean…and green.
BC’s Grape and Wine Industry: a profile
at a glance (fiscal 2002) 82 wineries
$800m capital investment
$230m annual sales
$100m tourism revenue
$110m direct contribution to province
$543 million in planned investment over next 5 years
BC’s Grape and Wine Industry: history
the free trade paradox Prior to Free Trade the Canadian Wine industry supplied low cost, volume based wines primarily from imported juice
Late 1980’s Free Trade suggests future of BC’s grape industry in doubt growers and estate wineries opt to restructure and focus solely on quality. 1990 creation of British Columbia Wine Institute to set quality standards and supply generic marketing. 1991 BC adopts Vintners Quality Alliance (VQA) program which sets quality benchmark industry must achieve
provincial initiatives are launched to shift industry to quality focus and encourage VQA participation Grape Marketing board eliminated to allow free market pricing 1992 VQA sales grow double digits for next decade1994 wine world is stunned when Mission Hill’s Okanagan Chardonnay takes top place in London, UK2001 Industry plantings of premium viniferia exceeds 5,500 acres2002 investment in capital exceeds $800 million
BC’s Grape and Wine Industry: history
shift to quality
BC’s Grape and Wine Industry: the results
progress made
1990 2002
wineries 18 82
Viniferia acreage
695 5,500
VQA Sales $9.8 million $95 million
crop value $4.4 million $24.5 million
Canada’s Grape and Wine industry will only be successful as a niche producer of top quality wines
BC’s Grape and Wine Industry: the futuremarket realities
niche marketing strategy focused on: relentlessly pursue premiumization strive to educate domestic consumers continue to develop Wine Country seek niche premium export markets
BC’s Grape and Wine Industry: the futurefinding our niche
$4.16VQA wine
$0.51imported
wine
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
economic value created per litre sold
BC’s Grape and Wine Industry: the future
capturing the domestic market
improved domestic sales help all Canadians
the greatest opportunity to increase sales rests in our ability to sell more wine in our Domestic Markets
2001 Capture of Domestic Market
99%98%
97%
89%86%
84%49%
14%
0% 10%20%
30%40%
50%60%
70%80%
90%100%
SpainItaly
AustraliaFrance
USANZBC
BC VQA
BC’s Grape and Wine Industry: market strategy
capturing the domestic market
BC’s Grape and Wine Industry: market strategy
Keys for Continued Success
VQA sets the minimum standard our industry can deliver
Wineries continue to develop their individual brand
Increasing the value of VQA wines by delivering better value between $15 and $25 per bottle
the Industry continues to invest in R & D to improve the quality of our products
BC’s Grape and Wine Industry: market strategyKeys for Continued Success
Develop, promote and enhance VQA wine sections and stores in Canada
Create a Wine Country experience that caters to the 6.0 million residence within an hours flight that rivals Napa.
Continue to demonstrate to the consumer Canadian wines deliver better quality to value than most other premium wine producing areas.
BC’s Grape and Wine Industry: conclusion Policy Considerations for Government
Excise Duty Relief
The current excise tax on Canadian Wineries is inconsistent with other wine regions and in particular the US. Subsequently, as a small emerging niche wine region small wineries are even less competitive. The Canadian Wine Industry seeks equal treatment with the US.
BC’s Grape and Wine Industry: conclusion Policy Considerations for Government
Domestic Marketing Support
The Canadian Wine Industry can be a catalyst for other agricultural products to adopt change and promote themselves in an effect way. Through the reinstatement of the Canadian Wine Market Development Program our entire agriculture sector can benefit.
BC’s Grape and Wine Industry: conclusion Policy Considerations for Government
Research & Development
Establish R&D endowments in each of Canada’s major grape growing regions that are matched with industry and lead by industry.
BC’s Grape and Wine Industry: conclusion Policy Considerations for Government
Other issues
Support the recommendations as laid out by the Canadian Vintners Association
Agriculture Policy: Points to Consider
• Historically the branding of agricultural products are by country or province. Eg. Canada Grade A, Canada Extra-Fancy
• Consumers see little or no difference between these products
• Lowest common denominator sometimes sets the standard
• Consumer concerns or questions not always taken into consideration
Agriculture Policy: Changes taking place
• Increase in Organic food sales• Consumer willing to pay more to ensure quality
and perceived health benefit• Increasing public concern over GMO’s and Protein
supplements• New Standards being set by consumers, Capers,
Urban Fair, Organic Sections• Maple Leaf Foods changes policy to only allow
vegetable based meal proteins. • Export markets considering setting new standards
for agricultural products
Agricultural Policy:
• “Canada’s policies in agriculture have allowed us to produce some of the highest quality, best value agricultural products in the world. However, our market is changing and if we fail to recognize this we will be left far behind.”
Agricultural Policy: A new approach
Farmers broaden their brand association and engage their customers
Reduce tendency to reject consumer concerns with science and economics
Establish standards that promote producers and processors branding to a higher standard
Development of new industry practices that will allow for greater segregation of products. Branded approach.
Set the standard for the world, based on quality not cost