A Role Model in Fine Wines
Writer: Phoebe Calver
Project Manager: Joshua Mann
Stellenbosch Vineyards is paving the way for Cooperative wine Cellars across South Africa having successfully completed its conversion from a production focus to more of a market-driven strategy.
Today, Stellenbosch Vineyards is a Public non-listed Company based in Stellenbosch, with its main hub located on the historic Welmoed Farm, representing the successful establishment of a merger between Stellenbosch-based producer organisation, Cooperative Cellars, and Vinfruco; the commercial wine arm of Capespan and one of the dominant fresh fruit exporters.
Having successfully made its strategic transition, Stellenbosch now serves as a role model for a number of Cooperative Cellars who wish to follow in its footsteps.
“Over time the Company has evolved and now functions in three easily identifiable divisions; the Stellenbosch Collection of Fine Wines, the Commercial Western Cape based wines, as well as the Innovative products division with interesting fruit flavoured wines,” comments Eduan Steynberg, Managing Director of Stellenbosch Vineyards. “Its vast product offering allows the business to service all the customers in the wine segment.”
During its progression, the Company’s most important strategy has been the drive towards building brands. In doing so Stellenbosch is forging strong relationships with consumers who can trust the business to deliver on its brand promise.
Steynberg continues: “Even though all wine businesses will highlight that they strive to over-deliver on quality at the price point of the wines, Stellenbosch Vineyards has been able to consistently deliver on that promise, not only winning gold medals on the top end wines, but also excelling at the best value awards.”
Currently exporting to 39 countries, within this footprint the Company deals through market agents but also prides itself on holding a number of direct customer relationships with big international retailers.
“With the introduction of the divisional approach, the market focus changed and the Company now has a completely different approach towards hitting target markets,” Steynberg explains. ”The overall volume moving into the traditionally strong European market forced us to look for new customers in new and exciting places like Russia, China, the USA, Scandinavia and Africa. We are truly a global competitor with a product offering that makes us the ideal one-stop shop for South African wine.”
Innovation is at the heart of the Company’s development and is the primary reason behind its success during this period of transition. The core activities of the business have focused on the commercial wine division, which targets the lower margin, high volume sector of the wine market. However, Stellenbosch has also recently introduced a further two divisions into its portfolio, with award winning wines remaining the ultimate goal of the Stellenbosch Collection and innovation being the key behind this success.
“South Africa has fallen into the trap of being a cheap wine supplier to the world, selling bulk wine to customers who add value into the market. This pressure forced us to move into higher value wines and innovative products. We believe these two divisions will continue to grow as we build brands and forge relationships with customers and consumers across the world,” says Steynberg.
A global competitor
The entrepreneurial nature of the Company has been a key facilitator in reaching its ambitions over the years, compounded by a solid product offering and consistent working structure which has culminated in plans to expand into the global domain over the next few years.
Steynberg explains: “We believe our single biggest competitive advantage is the infrastructure we have. We are small enough not to be a corporate and big enough not to be an estate. We are entrepreneurial and have the ability to take and implement quick decisions, and we have now developed a profit offering that makes us a one-stop shop for local and international customers.”
With its integrated production system on site, the Company can produce, blend, bottle, store and distribute its wines from one place. Stellenbosch then completes its offering by priding itself on the excellent customer service it provides; and with a record of more than 95 percent on-time and in full order execution performance, it is easy to see how Stellenbosch Vineyards is already such a success in South Africa.
“Our goal is to be the most admired South African wine business and we expect to be a lot closer to that in five years time. Respect is earned so we know it is going to take time. On a more measurable level we would like to double the turnover in the business whilst improving our operating profit margin by five percent.” concludes Steynberg.
For more information on Stellenbosch Vineyards please visit www.stellenboschvineyards.co.za