Overview: The Barossa Valley wine region is facing significant challenges due to oversupply of grapes and decreased demand. In response, Chateau Tanunda has implemented a “stick or twist” strategy that requires growers to deliver their fruit at the exact time when the winery needs it, rather than following traditional harvest schedules.
The Full Story
Mike Brown, export sales director for Barossa producer Chateau Tanunda, explained in an exclusive interview with The Drinks Business that the winery has hit upon a model that could potentially succeed where others have failed. The “stick or twist” strategy is designed to provide growers with continuity of supply while ensuring that wineries can access grapes at the right time and price.
Brown stated, “The industry is in a complete state of flux. Shelf space for wine is diminishing and there’s very little brand loyalty from consumers because there’s so much choice.” He emphasized that while producers get caught up in regionality, consumers don’t care. As a result, growers are hurting.
Production & Profile
The “stick or twist” strategy involves requesting grapes earlier than usual from growers on the promise of being paid when Chateau Tanunda receives payment itself. This approach aims to provide continuity of supply for growers while also ensuring that wineries can access grapes at the right time and price.
Brown explained, “Every time we turn the machines on in the winery there’s a cost… but the winery might only get paid potentially 15 months down the line when the supermarket or whoever agrees to take our final product.” He stressed that this approach is about creating new opportunities in the market and being transparent.
Brand & Industry History
The Barossa Valley region has a long history of producing high-quality wines, but it’s facing significant challenges due to oversupply and decreased demand. Brown stated, “The only way [the Barossa] is going to work is if we get access to the material we need at the right time and at the right price.” If successful, this strategy will ensure that wineries like Chateau Tanunda stay relevant.
Brown also mentioned Peter Lehmann’s approach in the 1980s, which “saved a large section of the Barossa community”. He emphasized that it’s not about manipulating people but creating new opportunities and being transparent.
What This Means
The implementation of this strategy has far-reaching implications for the industry. If successful, it will provide continuity of supply for growers while ensuring wineries can access grapes at the right time and price. Brown stated that everyone would benefit from this approach: “The grower gets paid when we get paid; the retailer gets a product they need to sell; and Chateau Tanunda gets access to high-quality grapes.”
Consumer Takeaway
The success of this strategy will ultimately depend on its ability to provide continuity of supply for growers while ensuring that wineries can access grapes at the right time and price. If it works, consumers will benefit from higher quality wines produced in a sustainable manner.
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