Late last week, I had the pleasure of participating in a very well run and thought provoking Disruption workshop led by David Platt and Larry Quick from Resilient Futures in Melbourne. Reflecting afterwards, I quickly found myself wearing my Paradise Rescued Founder Director’s hat and compiling a short list of potential Disrupting Factors, which I am calling my Top 7 Wine World Disrupters.
As the deep world economic recession took hold in late 2009, one of the foundation pillars or values that we captured in our Paradise Rescued (picture)Vision was Sustainability. At the end of the 00’s as national economic and personal thinking switched back to self preservation, Sustainability took a back seat until more recently. But with the return of Sustainability onto the global agenda, the trend is to apply its principles with a strong “environmental only” bias rather than fully embracing the three pillars of People Planet and Profit. And whilst it is very encouraging to see the wine industry more actively embracing the community’s demands through significantly enhanced environmental performance, there are other potential major disrupters which we have to recognise in the mix in order to deliver a sustainable future platform for our industry.
If I focus (locally) on the huge vineyard that is Bordeaux, considerable change has taken place in its structure over the recent past. It continues to evolve and change and this will doubtless continue. In 1975, the average per capita consumption of wine in France was 100 litres per person. Today it is just 40 litres per person per year. Twenty years ago, there were 15 000 producers working the 120 000 hectares of vineyard. In 2015, the surface area under vine hasn’t changed substantially but the number of Bordeaux producers has more than halved. With +/- 25% of Bordeaux wine selling for less than Euro 3 per bottle, it is easy to see that this one giant famous esteemed vineyard is undergoing significant change. And further shifts are inevitable. My observation, for the most part, is that responding to current disruption and change is not high on the agenda of many of my producer colleagues. Yet?
As I seek to develop our Paradise Rescued business Vision and strategy, I thought it beneficial to try and work out a list of those potential future disruptors so that we can scenario plan for the changes and also step ahead of those changes and bring additional customer value. So here is my list of current of Top 7 Wine Disruptors:-
Top 7 Wine World Disruptors
- Climate Change. We can continue to debate the cause for all its worth but it is happening fast and it will significantly change most current vineyard areas of the world right now and add some new ones into the mix – southern England being a good example.
- Environment. The pressure is clearly on in Bordeaux to improve its environmental performance and image. The track record across many vineyard areas of the world is similar although several regions have become early adopters with their improvement programmes. Certified organic status wine, including the debate around its definition and application, will take centre stage.
- Sales and distribution channels. With the ascendancy and increased combined momentum of on line order sales portals and ever bigger direct distribution networks, the battle will be on between larger producers using traditional distributor retail B2B networks and the smaller producers seeking greater direct B2C routes with enhanced customer interaction. Mandatory tiering systems (USA, etc) will be heavily challenged.
- Societal regulation. Wine is still an alcoholic beverage and as such will still be included under difficult and seemingly unfair regulation although it will increasingly differentiate itself from commodity drinks. Rapidly changing community perceptions will be the norm often making our industry frustrating to justify at all levels. No matter how great it’s contribution to local and national economies.
- Winelover experience. Wine is more and more becoming part of the leisure and luxury experience landscape. This will continue to grow in a world that will look to find new adventures to occupy our time. It will also go to a new level that will go beyond the current sommelier and winery door experiences. Social media will play a much more significant role in the future. The options may be endless.
- Knowledge and capability. Big players will use robots to prune and satellite controlled unmanned tractors or harvesters to manage their vineyards and wineries. Smaller players will stick to traditional hands-on methods or a hybrid of the two scenarios. Both approaches will require sustainable vineyard / wine technology skills which will involve often cold hard work outdoors. The divergence in marketing will be interesting to watch.
- smartWine. In almost every area of manufacturing (which includes food and wine), engineers and marketers are scrambling to find ways to embrace internet technology to add value, intelligence and performance to their products. Consumable products are a little more challenging to innovate with but the ideas are coming. Watch this space…
The choice for us as (wine) business leaders is to work out whether we are going to be part of that successful future or not. As David Platt expressed it “There is no middle ground. You will either leverage disruption or lose – albeit maybe slowly through so-called managed adaptive decline (MAD). The time to react and prepare is now.”
What do you think? Are there other potential disruptors that I have missed in our industry? My observation is that our industry is generally very conservative. Just look at the slow uptake rate of social media for instance. Feedback please…. Lets have the debate, but I can predict that more than 80% will be in that MAD category hoping that it will all just go away. Are you one one of them? Let us know your thoughts….