Virtual Stormhoek

For those following the story, this link will probably be very interesting:

On the Stormhoek Trail

Many thanks to the intrepid Peter May and his fascination with Pinotage

An unusual brand, from a virtual winery ... whatever next I wonder?

Stormhoek Origin and End

As was revealed today in Harpers, it seems that Origin Wine Pty, another producer from South Africa with existing international brands and strengths, will be taking over the assets of Orbital.

I can't say I know much about Origin beyond what I have read elsewhere today, so I can only hope it works out for them and for the brands, including Stormhoek (why is it that neither of these companies seems to have any web presence of their own?).

What is interesting, and sad, is that as Origin already has UK offices it will not be taking on any of the Orbital staff, so I suspect there will be some pretty big changes in the marketing of the brand. I'm pretty sure, for a start, that it means the end of Hugh MacLeod's involvement.

It is probably a sensible result for those involved, but I guess there are those of us who will be disappointed that the result was not more ... dramatic, and befitting the brand.

Let's see what Origin can do for the wine. Good luck!

Stormhoek News & Speculation

Well, it looks like things are on-track for keeping the Stormhoek brand alive, if not the whole of Orbital as a company.

I'm sure we'll know more early next week once due-diligence is complete, but it is fun to imagine where they will end up.

Just imagine: Wouldn't it be fun to see it taken over by someone outside the wine business, probably by a tech company trying to reach the young, blogging, tech-savvy audience that already knows & loves the brand?

Why should they?

Well, a wine business will need to make a reasonable profit from it to justify the take-over, and we know how hard that is. For a well-funded tech business, this sort of investment would be peanuts, and so even if it made no profit at all, it would save them $/£ millions from their advertising budgets, money that they would otherwise spend anyway.

Just a bit of fun. I don't expect anything like this, but it would be a great Wine2.0 story, wouldn't it?

"Major Tech Company buys Social Object in a Bottle"

Stormy waters for Stormhoek

Lots of interest in the story about Stormhoek and Orbital going into administration that I posted recently, so I thought I would update it with a few more thoughts.

My first observation is that there has been a deafening silence from Hugh MacLeod on the subject of Orbital's problems. You'd think that the uber-blogger and chief communicator might have something to say on the subject so I am guessing that either a) he is so thoroughly ****ed off that he dare not discuss it or b) - much more likely - that there is stuff happening behind the scenes and he is waiting for that to be made public. I certainly do hope it is the latter.

Secondly, Alastair brought up the issue of the 4P's of Marketing (a subject I have covered before myself before) in the comments.

I do think that Stormhoek did manage to have a good Product, at an attractive Price and had managed to get reasonable distribution (Place) for the wine - and of course they were famous for the Promotion. Here was a brand NOT using Price as their main driver - hurrah!

The main reported reason for the failure of the business was a poor decision to upset a retailer by selling their wines cheaper to a competitor, resulting in them being delisted. Whether this is factually correct or not I do not know, but it reminds us that retailers have power over such young brands - and that without the P of Place/Distribution none of the other elements mattered enough, and the business suffered.

However, I would also suggest that there is another way they had suffered a little lately as Alastair's story demonstrates (see comment number 5). The focus had moved too far towards packaging and the image. There were regular label changes, including for Valentine's Day, special runs with new labels for facebook groups, awards dinners and Microsoft, etc. I'd suggest that all these distracted from the main business objectives and did not focus enough on getting fans to put their money where their browsers were and go out and buy the wine.

A small company cannot cope with lots of different labels and dispatching tiny lots of wines all over the place (for free!!). The key is focus, and in a competitive market like wine, to minimise costs. Instead, they started upsetting their fan base by fragmenting their product offering and making it harder to deliver on their promises.

The Wine Conversation needs to be as general and free-ranging as possible, and no brand could, or should, control it. Anyone can join in and so become interested in wine, whatever their angle is on the subject. However, as Josh pointed out, a winery or brand needs to sell wine in order to survive, and their conversation must ultimately lead people to the cash register.

I hope that Stormhoek 2.0 gets back to basics and uses its indubitable communication skills to get their product selling again.

More thoughts soon I'm sure when more news comes out.

[UPDATE: More news out now. See here. The Administrator is "optimistic" of reaching a deal next week.]

Sad news for wine marketers

This story caught my eye this weekend:

Orbital Collapses into Administration (from Off Licence News)

You may never have heard of Orbital, but if you read about wine you have probably heard about Stormhoek and their more innovative marketing campaigns, particularly online, and as a blog reader/publisher you will almost certainly have come across Hugh MacLeod at Gapingvoid who has been working with the brand.

They have managed to create great visibility and brand awareness for stormhoek, particularly in certain quarters. Unfortunately, it seems that they have not been able to match that with commercial returns, and the business has gone into administration.

This is by no means the end of the story, as it is essentially about cash flow and not the brand or the wine, but it just goes to show that we may talk a lot about what wine could do to become better at communicating with customers and the wine conversation, but margins are so tight, there is very little one can do without very deep pockets.

I trust someone will buy the business as a whole and keep these people in their jobs, and it might even be one of the big international businesses who'd love to have the brand and expertise in their 'stable'.

A sad day for marketers in the wine business.

As Hugh likes to say, and Stormhoek have recently headed their site:

"Change the world or go home"

Unfortunately, the world doesn't seem ready to change, yet!

[UPDATE] Josh at Pinotblogger has picked up on this story as well and made some interesting points, some of which I commented on on his blog. Definitely interesting times.

Wino-dynamic

How is a consumer expected to care about Bio-dynamic or Organic wine?

According to a study, consumers are confused. I wonder why?! With regard to why they purchase:

Biodynamic is less important than Organic
Organic is less important than the vintage
Vintage is less important than the winemaker
Winemaker is less important than the region
Region is less important than the country
Country is less important than the Varietal
Varietal is less important than the price
and finally,
Price is less important than the "deal" or "offer"

How is the average wine buyer to even start to consider whether the wine is either organic (which they at least have heard of) or bio-dynamic (which they certainly haven't)? They aren't even quite sure if the varietal name they have heard before is red or white.

The problem with marketing in the wine trade to some extent is explained by the fact that the differences, if any, between any wines are all at the top of that list, and therefore far beyond the interest levels of the consumer.

Therefore we have the following options:

Give them a(nother) deal
Join the me-too brigade focused solely on the varietals
Spend millions in the hope to increase wine "education & understanding" amongst consumers
Give them another, very different, reason to buy YOUR wine

Stormhoek are doing this last one. Magners have done it in cider. Levis did it for jeans.

As Hugh says, "go after the magic".

Unfortunately, in the commercial arena, bio-dynamics are still just hocus-pocus, not magic.

Marketing Innoculation

So Threshers and Stormhoek are at it again (no I will not link to it, but I suspect you can find it easily enough) - you can read my previous views here and here.

Having just spent 6 weeks trying to rid my body of an infection, I don't have the energy to fight a marketing "viral" campaign too, but I think that the consumer "body" will be better able to resist it this time around - although I may be wrong.

My own view is that resistance is low at Christmas, but that at the moment the word of mouth element will be sufficiently dilute for it not to take control. It would be amazing if it did, but there are probably enough deal junkies and gapingvoid 'disciples' to spread the word. However, how many times can Hugh do this before he ruins his own credibility and that of the brands he works on?

Let's wait and see. I suspect the answer will be inconclusive, with a rise in sales to justify the action but not nearly the same impact, vindicating the opponents.