African Roots Wine Brands, Tygervalley, South Africa
AFRICAN ROOTS WINE BRANDS, a little-known South African company, had big dreams of its Seven Sisters wine becoming a household name. But the legacy of apartheid hindered the upstart's ability to get wide distribution in its own backyard.
“Black people didn't own any land or vineyards in the apartheid years,” explains Vivian Kleynhans, managing director of African Roots Wine Brands. “From 1994, when we became a democratic country, we were allowed to move into new industries.”
And by 2005, African Roots Wine Brands was ready to market wines locally. But it was having a tough time going up against the less-expensive offerings from South African farmers who produce wine on land they own.
“We can never be as cheap as the farmer-owner unless we farm ourselves, so that is the challenge we sit with in South Africa. Our wines are a bit more expensive because of all of the steps we have to go through because we don't own the land,” Ms. Kleynhans explains. “It's very hard to work this side.”
Faced with a tough audience at home, the company needed to look beyond its borders. And it just so happened that Ms. Kleynhans’ booth at the first annual Soweto Wine Festival attracted the attention of Selena Cuffe, a tourist from the United States.
“She asked to taste the wine and asked if it was available in the United States,” Ms. Kleynhans says. “I laughed and said ‘You can't even find it in South Africa on the shelves, let alone America.’”
Eager to help indigenous African vintners navigate the unfamiliar—and often daunting—U.S. regulatory environment, Ms. Cuffe launched Heritage Link Brands. The Los Angeles, California, USA-based wine importing and distribution company opened a month later in October 2005.
And the project to introduce Seven Sisters in the United States officially kicked off.
Eager to help indigenous African vintners navigate the unfamiliar—and often daunting—U.S. regulatory environment, Selena Cuffe launched Heritage Link Brands.
Entering the U.S. market was an enormous undertaking for the small company. Ms. Kleynhans had to establish partnerships with nearby vineyards to source grapes, and specifically with major wineries that had the capacity to produce the volume of wine she needed.
“I knocked on the door of a very big winery and asked if they could assist me doing my wine,” she says. “They were a bit skeptical.”
Eventually the company agreed, at least in part because of legislation that requires partnerships with black-owned companies.
There was a lot on the line. If the project to launch the wine into the U.S. market failed, African Roots might not have had the cash or credibility with local vendors to try again. Everyone from the printer who produced the labels to the seller who fermented and bottled the wine had taken a great leap of faith in supporting the fledgling company's project.
And then there was the weight of the company's own expectations. “We're not working toward an ordinary company to make money for our own households,” Ms. Kleynhans says. “We are working toward a legacy for our families that our parents never left behind for us.”
For the project to work, Ms. Kleynhans first had to figure out exactly what U.S. consumers wanted out of their wine. She shipped 10 cases of the company's seven varietals—named after her and her sisters—to the United States for six to eight months of packaging reviews and blind taste tests in venues from coast to coast. Based on consumer responses, she worked with a wine master to boost the intensity of the fruit flavors in the Pinotage/Shiraz by adapting to an equal blend percentage, and to lift the sugar level in the Chenin Blanc to give it the fresh, easy-drinking character U.S. drinkers preferred.
She had to ensure the packaging suited the new target market as well. The European-inspired labels the wines bore in South Africa were replaced with more colorful ones depicting the sisters’ journey from a poor fishing village to fine winemaking.
At the same time, Ms. Cuffe and her team in the United States were busy making contact with stores. They quickly identified Whole Foods Market as a chain that would put the brand in front of the winemaker's key U.S. audiences: socially conscious consumers, young adults between the ages of 21 and 30, and African-Americans.
But the project team's efforts to get on shelves were complicated by the company's decentralized buying. “They decide what to bring in on a store-bystore basis,” Ms. Cuffe explains.
The team decided to launch in Massachusetts, where state law stipulates that grocery stores can only sell wine in three of their locations. That meant Ms. Cuffe and her team could introduce Seven Sisters in three stores and still be everywhere wine was sold by Whole Foods in the state. The move allowed the team to achieve total market saturation and keep a close watch on how the product fared in the market.
At the same time, the team worked to obtain licenses to transact alcohol-related business in other states and find warehouses to store the wine. Here, too, the company ran into a logistics snag that threatened to derail the project. Each state had different licensing requirements. Some even required supplier signatures, which Ms. Cuffe collected for the first batch of wine during a December 2006 visit to South Africa.
Once the delivery timeline was set, it was up to Ms. Kleynhans, on the ground in Tygervalley, to make sure the South African team got the products to the port on time. She oversaw production closely, researched how her project fit into the partner winery's larger operation and worked hard to convince the vendor it was in its best interest to aid Seven Sisters’ U.S. launch.
“No matter how important it is for you to have a smooth run, you might only be 20 percent important to them,” Ms. Kleynhans explains. “You have to assess their approach to your company. At the end of the day, they don't have to give you anything.”
All the advance work paid off. The wine arrived on time for its 23 April 2007 departure date to the States.
A GENUINE SUCCESS
The project paved the way to the shelves of other U.S. grocers: Seven Sisters wines can be purchased from retailers in 40 U.S. states. And foreign markets now drive African Roots Wine Brands’ growth. Roughly 70 percent of the company's revenue comes from U.S. sales, while just 20 percent comes from its native South Africa.
The remaining chunk is from the United Kingdom, Sweden and other parts of Europe, where African Roots Wine Brands launched after the U.S. debut.
The U.S. project also proved helpful on the marketing side, too. Based on consumer research, the company put the emphasis on telling the founders’ story on the bottle labels, in advertising campaigns, and even in discussions with suppliers and partners.
“There are a lot of people who have come to love her and her sisters even though they don't really know them,” Ms. Cuffe says.
By striking up creative partnerships, relying on local counsel in a new market and staying focused on project outcomes, the upstart wine company made inroads in a market that larger brands are now pursuing.
“The South African wines are trying to get into the United States and it's very difficult,” Ms. Kleynhan says. “We are very lucky to be there already.” —Maya Payne Smart
PM NETWORK MAY 2009 WWW.PMI.ORG