Wineries have always collaborated at an operational level: sharing vineyard equipment, leasing tanks, borrowing a filter, swapping ideas and advice. At a generic brand level too, the New Zealand industry is highly cooperative, establishing an impressive and united presence in key markets. However, when it comes to commercial matters, wineries have not been quite as sociable.

While collaborative, the wine sector is also immensely competitive: thousands of brands, all chasing limited retail shelf space or a prized restaurant wine listing; the astonishing growth in global demand until recently; a strong and confident entrepreneurialism amongst winery owners. It’s no wonder wine businesses preferred to do their own thing.

But that mind-set has to change. Facing a future where sales are slower and margins tighter, wineries need to reconsider their historic attitudes to commercial collaboration. Business cooperation can take a number of practical, small-scale forms:

Administration: This role can be combined across wineries for accounts, logistics, shipping & operations. A winery with a strong admin person could charge them out to others.

Cellar Door: a shared tasting room will dramatically reduce overheads. A good example is The Wine Room which markets five Marlborough wineries
under one roof. The respective brand positions do need to be carefully managed, but this is not an obstacle.

Marketing: a single well qualified person can cover the needs of 3- 4 wineries very effectively. Wineries each get the benefit of a professional at a quarter of the cost.

Sales: small wineries benefit immensely from sharing a sales team, especially in the domestic market. Unlike a commission agent or distributor, the reps are working directly for wineries and are more effective as a result. Where a larger winery already has a domestic sales team, a non-competing range from a smaller player can be added.

Export: for international sales, a one professional can handle the needs of 4 – 5 wineries on a day to day basis. Winery owners can visit the market on a targeted basis.

Collaboration can extend to forming a business dedicated to the marketing and sales of a set of wineries. The winery partners share the governance. A sales management team is recruited and run, overheads apportioned, a plan implemented and supported. As the new “distributor” need only to cover costs, there is a margin benefit to wineries compared to working with a distributor. In addition control of the winery’s brand and closeness to the market is a major advantage.

The cooperative approach can extend across the winery’s operations and business. Recent discussions Winepartners advised on covered a “swap” of winemaking and cellar door space for marketing, sales and viticulture resources.  At present we are working on an offshore distribution position for a group of selected wineries. This is a long term project that will create not only a strong brand and control position for the wineries concerned, but significantly higher margins than they would otherwise enjoy. The collaborative model has plenty to recommend it.

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