"...the falling Australian dollar and growing demand for mid-range wines means the time is right to lead a "second wave" of exports to the US..."
John Geber (Chateau Tanunda) quoted in "The Advertiser", Adelaide, Australia, June 21 2013
One year ago, on July 25 2012, Caroline Henshaw (Wall Street Journal) wrote about
the tough times for the Australian wine industry and the effect of the high Australian dollar. Fast forward to July 2013 and you’ll find more positive coverage about Australian winemakers. Recent positive comments from Casella Wines (John Casella quoted in Ninemsn) and D’Arenburg Wines (Chester Osborn quoted on the ABC) show why Australian wine makers really believe that the falling Australian dollar will provide a dividend for Australian winemakers that had made long term marketing investments in the US. The companies that have stuck it out in the US are now poised to raise their profit margins without changing their US-dollar price.
While the falling dollar is a long overdue bonus, there are other profit drivers that help support a well-priced product. If a reliable source gives your product a positive review then you will have a better chance of defending the price point you choose. Taylor’s Jarman Shiraz took out a gold medal in the 2013 New York International Wine Competition to show that Australian wine can compete on quality as well as price. This is important because there has been much attention given to the idea that the cheaper Australian wines that sold well in the 1990’s and the early-2000’s created a perception that Australian wine is “cheap wine”.
In the US it is not enough to be good or well-priced, you also have to be good at selling and you have to be relentless. Americans are born to sell and any Australian in the US market has to get in touch with the American side of their personality which makes them a persistent, but polite, seller. That point is well taken by John Geber, the Australian head of the Château Tanunda winery, who has come to the US for a two year stint of old fashioned in-person selling. This enables Mr Geber to revisit US buyers on a regular basis to sell his product and to also find out why they buy other products.
1. Currencies that go up also come down.
Often the hedging insurance offered by banks is not affordable for exporters with monthly transactions. If you can export to multiple countries you can find a natural hedge that balances the upward movement of one currency with the downward movement of another currency.
2. Quality is a more sustainable differentiator than price.
If you are competing solely on price then you can end up in competition with someone who is so desperate that they continually cut prices even after it becomes unprofitable. It is the classic, “race to the bottom”.
3.You have to be in the US to sell your product to the Americans.
There is usually no other way to successfully sell in the US because every US buyer for a retail organization has a line of sellers outside his door waiting to pitch their product. If you are hoping to break into the US via email or phone then you will be easily ignored. You will also be outsold by competitors in the US who can meet the buyer for dinner, drinks, or a round of golf.
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