Edward Cavendish & Sons Unit 8 Gatwick House Peeks Brook Lane Horley Surrey RH6 9ST Tel: 01293 874110 Fax: 01293 874119 Email: kb@ecavendish.co.uk Web: www.kwv-international.co.uk Key contacts Managing director Gary Proctor Board director Clifford Knowles Marketing manager Kate Billington National account manager Suzanne Strain Channel manager ­ retail Frank Carr Key brands South Africa Pearly Bay Robert's Rock KWV KWV Roodeberg Laborie Estate Cathedral Cellar Perold New Zealand Red Birch Australia Ceravolo With globalisation becoming a major feature of the wine industry many wine producers feel the trend towards consolidation poses a threat to consumer choice. However, Edward Cavendish takes a more positive view. Managing director Gary Proctor says: "We think globalisation will allow a more balanced relationship between the wine producer/supplier and the retailer. "In fact, the larger companies will have the power to protect the smaller wineries. Today large retailers have the power to make or break many small wine producers. As more and more wine companies merge or enter acquisition, the retailer oligopoly will have less impact on their profit margins." Consolidation means choice At present the wine market is quite fragmented, another development that Proctor believes should not be seen as a threat as it offers retailers and consumers more choice. He says: "In our opinion consolidation in the wine industry should not pose a threat to consumer choice because we believe that the larger companies will continue the distribution of a wide number of brands targeted at all sectors of the market. "This is the direction in which we are heading at ECS, our strategy for the future is to market and distribute brands targeted at all price points from £3.49 to £10.99, thus providing consumers with the choice they require. These brands could be from anywhere in the world as long as they meet consumer demand." Proctor believes that consolidation could actually provide more consumer choice. He says: "If more wine producers united to work as one company ­ and thus manage to secure a better cost for their wine from the retailer ­ they could invest this extra profit back into their winery, into technology and the future development of wine production. "In addition, this profit could be used for consumer research to enable the wine producer to produce wines that directly meet with consumer demand." Positive moves For ECS and its parent KWV International the most exciting development in the wine industry over the past year, has been the positive progress made by its two main brands KWV and Robert's Rock. Proctor says: "Against a background of rapid change and development and some negativity towards KWV in the past we have achieved excellent growth for KWV and Robert's Rock. "The Grocer (24/02/01) revealed that KWV had made it into the top 20 brands in the UK for the first time. Figures showed that the value of KWV sales had increased by 164% in the year to Nov/Dec 2000. This trend is set to increase further over the next two years as we plough more investment into supporting the brand." ECS launched Robert's Rock in Sept 1999 and has achieved growth levels of 128% in the year to date. "The product was recently supported by its first above the line advertising campaign in most national press colour supplements and leading consumer magazines," adds Proctor. A growing public passion Proctor believes the success of its KWV and Robert's Rock is not the only positive progression within the wine industry. He explains: "Another exciting and sweeping development is that the consumer is not just drinking more wine but becoming more knowledgeable about wine. This is as a direct result of both retailers and suppliers working together for the benefit of the consumer... long may it continue!" Consumers may be becoming more wine savvy but they are still price conscious, with the majority of consumers keeping within the £5 price range. This is a demand that ECS is happy to provide for. Proctor says: "In our view we have not seen much evidence of marketing effort into wines of a higher value. At ECS we spend a great deal of effort marketing KWV and Robert's Rock brands, which are overall in the £3.99-£5.99 price category but do not spend as much effort on the marketing of Cathedral Cellar wines, priced between £6.99-£8.99. "If the marketing of higher value wines is targeted at the right audience eg advertising in titles such as Wine, Decanter or Harpers & Queen, then it should not be a wasted effort as readers of these types of publications are more likely to purchase wines priced over £5.99. "However, this section of the community is very small, and any investment must realise an acceptable return in either volume, awareness or profit. The problem with expensive wines is this is not as easy to evaluate due to the limited distribution or volume." {{Z SUPPLEMENTS }}