Two Oceans riding on the crest of a wave
Distell group, posted impressive sales in 2002, led by both
domestic improvements and by strong sales in core export markets
such as the UK, Canada and Sweden.
Last year proved to be a good one for Two Oceans, one of the core international wine brands produced by South Africa's Distell group.
Domestic sales of the brand increased by 75 per cent in 2002 compared to the previous year, but there was also strong growth (67 per cent) for Two Oceans in the UK, traditionally the key overseas market for the brand.
But the UK was not the only success story. In Canada, another well-established market where the brand is the top selling South African wine, sales climbed 28 per cent, while in Ireland volumes jumped by an impressive 109 per cent.
But there is still plenty of growth to come before Two Oceans hits the high tide mark, at least according to Peter Hafner, who heads the global marketing of all Distell's wines.
"What sets it apart from some of South Africa's other export labels is that it is not confined to a single market but is flourishing simultaneously in the UK, parts of Europe and North America. Its success is being built through a long-term investment in marketing and distribution and its pricing has been structured to allow for sustainable margins, while remaining very competitive.
"In addition, the appointment of Linley Schultz as Distell's group winemaker at the end of 2001 has increased the focus on styling wines for the international market. This move has attracted significantly wider support domestically and internationally, enabling marketing and sales teams in major markets to build sales volumes, through retail as well as on-consumption outlets.
In the UK, not surprisingly it has been the listing of the wines with several major supermarket chains which has helped drive sales there, where the brand is sold in both Asda and Morrisons stores. This pattern has been repeated in other countries, with both Canada's LCBO, the world's largest retailer of wines, and Sweden's state-owned monopoly retailer Systembolaget stocking the wine.
"But there has also been very sound organic growth because of stronger support from independent wine retailers and on-consumption venues," said Hafner. "Now with better visibility, distribution and promotional infrastructures well in place, we are poised to tackle growth even more aggressively in our target markets."
In the UK, Two Oceans is represented by Percy Fox, part of the Guinness UDV group and widely acknowledged for having built US range Blossom Hill into one of Britain's biggest wine brands. In Canada, it is represented by Pieter Mielzynsky, in which Distell has a 10 per cent stake and which handles a range of global wines and spirits brands.
In Sweden, the brand is performing well and the introduction of the 3-litre bag-in-box format will further increase sales, which represents 45 per cent of all wine sales in that country. Often seen as a rather down market format in other countries, bag-in-box wines account for 60 per cent of all Swedish wine sales during the summer months, Distell said.
Hafner said Distell's improved efficiencies and flexibility meant it could not only adapt packaging to suit specific market needs but also tailor product offerings as well. "In South Africa, for instance, just two wines are offered from the range but elsewhere they vary to as many as seven, some varietal and some blended." He added that Germany was a market that had been earmarked for growth during 2003.
