Professional Internship Report
Analysis and trends of Colombian wine market
Harold Ramirez Salazar
Dissertation to obtain the degree of
European Master of Science in Viticulture and Enology
Advisor: Prof. Francisco Gomes da Silva.
Jury:
PRESIDENT :PhD Jorge Manuel Rodrigues Ricardo da Silva, Full Professor at Instituto Superior de Agronomia, Universidade de Lisboa.
MEMBERS:
PhD Luca Rossetto, Associate Professor at Università degli Studi di Padova; PhD Manuel José de Carvalho Pimenta Malfeito Ferreira, Assistant Professor with Habilitation at Instituto Superior de Agronomia, Universidade de Lisboa;
PhD Francisco Ramos Lopes Gomes da Silva, Assistant Professor at Instituto Superior de Agronomia, Universidade de Lisboa.
ACKNOWLEDGEMENTS
I owe the success of this study to the availability of the different people who worked with me in different places in Colombia, all the professionals I has the opportinity to talked with and obviously M Jacques Pierre Lamat to whom my mission was attached.
They gave me technical details about how the different regions, category of people and kinf of markets I was studying about, their information was valuable when I had to go on the field , but also to better understand how to organize my time and prioritaze what is important and what is not. I would like to thank the entire team of the Sales Department for their welcome and their contribution to the smooth running of my internship.
More particularly, I would like to thank M. Marlon Giraldo, key Account sales Manager and the person in the company I worked longerto, for his warm welcome within the company, his supervision, his patience and his attention, throughout my thesis.
After these five months, I was able to appreciate the importance and richness of the teaching provided by the professors at “Montpellier SUPAGRO and Universidade de Lisboa as Carlos Lopes, Jorge Ricardo, Laurent Torregrosa, Sofia Catarino, among others excelent researchers.
They have enabled me to acquire the necessary know-how to face the demands of the business world, and thus more easily integrate an environment that was hitherto unknown to me: Internet commerce. In particular, I would like to thank M. Patrice Lallemand , Director of the Master's Degree.
In addition, the training I received during these years allowed me to be at the forefront in a labour market that is becoming increasingly complex following the various economic crises that the world has experienced in recent years. This undeniably influences the hiring policy of companies that are not only looking for a competent professional, butalso a person ready to give the best of themselves to accomplish all the tasks entrusted to them within the company.
I would also like to thank all the people with whom I have had the opportunity to learn and collaborate (sales team and technical team), for facilitating my integration into the team and for the many advices and explanations they have given me since my arrival.
Finally, I would like to thank Edwin Zuluaga for his review of this thesis and for helping me to clarify the expression of my thoughts as the help in order to achieve this work on time and all the requirements needed.
ABSTRACT
Colombia has an advantageous position in Latin America, in fact, having left the sea at two oceans Atlantic and Pacific, Colombia is a crossroads where several cultures mix, thanks to this geographical position Colombia has developed in recent years maritime routes in order to become a destination not to be missed not only by tourists but also by the routing of goods
Otherwise, in the southern cone countries (Argentina-Chile-Uruguay) Colombia is not a traditional wine-growing country, although in two regions of the country there is wine production, but this production remains very small from a volume and quality point of view, despite the efforts made in recent years by some winegrowers. Despite the increase in consumption in recent years, Colombia remains out of reach in terms of wine, with a culture that is not very interested in the pleasures of wine.
The purpose of this work is to show an in-depth overview of the current state of consumption and prospects for the coming years, detailing the strengths, weaknesses and opportunities of the market, to understand these economic analyses it is essential to take into account the social and political panorama that has been constantly changing in Colombia in recent years.
Despite Colombia's undeniable economic advantages, the migratory waves not only of Venezuelans but also of Colombians living in remote regions of the country will ensure that in the coming years the public authorities act consistently to avoid a collapse of large cities.
In order to understand this work as well as possible, it is essential to take into account that politics and economics are closely linked because one does not exist in the other and above all it is politics that shapes the way a country is conducted economically, which is why this book analyses amply all the aspects that are part of society.
RESUMO
Colômbia tem uma posição vantajosa na América Latina, de facto, tendo ligacào com dois oceanos Atlânltico e Pacífico. É uma encruzilhada onde várias culturas se misturam. Graças a esta posição geográfica Colômbia tem desenvolvido nos últimos anos rotas marítimas para se tornar um destino a não ser pedido não só pelos turistas, mas também pelo roteamento de mercadorias.
Por outro lado, a Colômbia, diferente dos países do cone sul (Argentina-Chile-Uruguai), não é um país vinícola tradicional. Embora em duas regiões do país exista produção de vinho, esta produção continua a ser muito pequena do ponto de vista do volume e da qualidade, apesar dos esforços realizados nos últimos anos por alguns viticultores. Apesar do aumento do consumo nos últimos anos, a Colômbia continua fora de alcance em termos de vinho, com uma cultura pouco interessada nos prazeres do vinho.
O objetivo deste trabalho é mostrar uma visão profunda da situação atual do consumo e das perspectivas para os próximos anos, detalhando as forças, fraquezas e oportunidades do mercado. Para entender essas análises econòmicas é essencial ter em conta o panorama social e político que tem vindo a mudar constantemente na Colômbia nos últimos anos. Apesar das inegáveis vantagens económicas da Colômbia, as ondas migratórias, não só dos venezuelanos, mas também dos colombianos que vivem em regiões remotas do país, garantirão que nos próximos anos as autoridades públicas actuem de forma coerente para evitar um colapso das grandes cidades.
Para entender este trabalho o melhor possível, é essencial ter em conta que a política e a economia estão intimamente ligadas porque uma não existe na outra e, acima de tudo, é a política que molda a forma como um país é conduzido economicamente, razão pela qual esta pesquisa analisa amplamente todos os aspectos que fazem parte da sociedade.
RESUMO ALARGADO
Do ponto de vista demográfico, a Colômbia é a quarta maior potência da América Latina, depois do México, Brasil e Chile. Nos últimos anos a sua população aumentou a um ritmo constante de 4%, o que sugere uma população que está a ser renovada e, portanto, um mercado para o futuro, que pode ser explicado pela indústria vinícola. No entanto, para explorar plenamente este mercado, é estritamente necessário criar uma cultura autossuficiente de vinho e gastronomía. Apesar dos esforços feitos por alguns importadores nos últimos anos, os colombianos continuam a recorrer a outras bebidas, como cerveja, rum e até mesmo sumos de frutas, que na Colômbia podem ser considerados um produto substituto do vinho.
Certamente, nos últimos anos os colombianos têm consumido mais vinho, mas são os vinhos de baixa qualidade que inundaram completamente o mercado. O preço da garrafa custa em média o equivalente a 5 euros, razão pela qual é tão difícil importar vinhos do velho continente. O transporte e os impostos que lhes são impostos deixam estes produtos à sombra quando se trata de competir com vinhos chilenos e argentinos. Com o mercado de médio alcance sendo muito pequeno e pouco atomizado permanece um mercado restrito, disponível apenas para grandes importadores.
A Colômbia continua a ser um país muito instável do ponto de vista econômico e social, com uma renda per capita de 6999 dólares por ano, um salário mínimo que mal chega a 350 euros por mês, e uma taxa média de trabalho informal de 50% do salário. A população tem pouco tempo para descobrir e aprender coisas novas, além disso, com a recente crise, cerca de 2.000.000 de nossos vizinhos vivem em sua maioria ilegalmente no país, e a delinquência, a pobreza e a miséria só aumentarão nos próximos anos.
Além disso, o tratado de paz assinado há mais de dois anos pelo Estado colombiano está suspenso por causa de numerosos problemas de financiamento, mas também por causa dos compromissos de ambas as partes para alcançar a meta final de paz para o país. Um país que vive uma guerra devastadora de mais de 50 anos e que deixou mais de 8 milhões de pessoas deslocadas internamente nas últimas décadas. Nos últimos anos o
consumo de vinho na Colômbia estagnou, certamente entre 2006 e 2016 o crescimento foi exponencial, passando de dois copos por ano para 1,5 litros em 2016.
As últimas reformas fiscais aumentaram consideravelmente os impostos sobre as bebidas importadas, incluindo o vinho, pelo que o preço aumentou entre 25 e 40%, o que constitui uma das razões pelas quais o consumo não aumentou.
No entanto, nos últimos anos, graças ao boom turístico, os colombianos tiveram uma maior abertura às culturas estrangeiras, especialmente à cultura europeia Estes recém-chegados trouxeram a sua própria cultura, incluindo o vinho, e com isso, novos vinhos chegaram à Colômbia e a cultura do vinho está a começar a crescer.
Para aproveitar este novo impulso é muito importante apostar na educação de novos consumidores, promovendo o consumo responsável e ensinando aos consumidores de vinho os benefícios do consumo moderado e informado. O conhecido paradoxo francês pode desempenhar um papel muito importante na integração diária do consumo de vinho e assim desfrutar de uma população que é jovem e, portanto, tão bem educada, torná-los consumidores potenciais durante várias décadas.
A Colômbia não é um país produtor de vinhos, ao contrário de países como o Chile e a Argentina, onde o vinho faz parte da cultura. A cultura vitivinícola acaba de regressar à Colômbia há apenas dez anos, por isso continua muito jovem e, ao contrário dos países europeus, o consumo da bebida do Deus Dyonisios está difundido entre todas as classes sociais. Na Colômbia o vinho permanece um produto para as classes altas, intelectual e artística, embora nos últimos anos este consumo se tenha alargado à classe média, sendo ainda muito difícil substituir os hábitos de consumo. Na Colômbia as refeições são geralmente acompanhadas por sumos de fruta ou refrigerantes.
De acordo com as previsões mais otimistas, o consumo de vinho na Colômbia aumentará nos próximos anos, graças a uma conjuntura econômica favorável, mas os últimos indicadores sociais mostram um aumento da pobreza e da precariedade, especialmente nas cidades fronteiriças com a Venezuela e a capital colombiana, Bogotá.
Outro caminho de desenvolvimento que pode ser interessante explorar no futuro para o mercado vitivinícola colombiano é o enoturismo. Este é um fenômeno que está se tornando cada vez mais importante na Colômbia graças ao boom do turismo, mas que ainda não encontrou seu lugar. Também é muito raro para os comerciantes ou comerciantes de vinho se envolverem neste tipo de atividade.
No entanto, com uma classe média emergente, o consumo de vinho pode continuar a aumentar. A chave está na educação, pois é muito importante desenvolver o gosto pelo vinho nas gerações mais jovens, e assim fazer com que o consumo de vinho na Colômbia se torne parte da vida cotidiana.
O objetivo deste estudo é mostrar uma visão geral do mercado de vinho na Colômbia e as possíveis chances de estabelecer uma cadeia de distribuição de vinho europeu na Colômbia, além de revelar as preferências dos colombianos quando se trata de beber vinho.
O consumo de vinho na Colômbia continua muito baixo, mas com um forte potencial de desenvolvimento, pelo que é muito importante que os próximos anos sejam dedicados à consolidação de uma estratégia de marketing e comunicação, beneficiando assim de um mercado que pode tornar-se um dos mais importantes da América Latina. Para integrar o vinho na cultura do país, como se faz em países tipicamente produtores como a Argentina ou o Chile, seria necessário não só um investimento muito significativo em publicidade e comunicação, mas também que as autoridades públicas se envolvam para dar a conhecer os benefícios do vinho e difundi-los junto da população em geral.
A distribuição é um grande desafio para as empresas como adegas. Será cada vez mais assim no futuro, com o desenvolvimento da tecnologia, actividades online, e porque a Internet oferece possibilidades quase infinitas aos compradores mas também aos vendedores. Apenas aqueles jogadores que são capazes de se adaptar à mudança permanecerão no mercado, mesmo sendo o vinho considerado um bem tradicional. Os consumidores preferem comprá-lo em uma loja, e em poucos anos a internet poderia se tornar a maneira mais fácil de vender vinho não só para a geração mais jovem, mas para
todos os amantes do vinho
Finalmente, o que podemos concluir é que, apesar do entusiasmo dos últimos anos pela paz e consolidação econômica, a Colômbia continua sendo um país onde fazer um investimento de longo prazo (exceto matérias-primas e petróleo) é um grande risco porque a tributação não é estável e a taxa de corrupção é comparada à dos países da África Subsaariana. A qualquer momento o país pode voltar à guerra civil.
A Colômbia mantém alguns ativos, incluindo o boom do turismo e da abertura da população para países estrangeiros.
TABLE OF CONTENTS ACKNOWLEDGEMENTS 2 ABSTRACT I 4 RESUMO 8 1. INTRODUCTION 13 2. METHODOLOGY 19
3. A PROMISING BUSINESS IN A HOSTILE ENVIRONMENT 22
4. PEST ANALYSIS 24
4.1.POLITICAL FACTORS 24
4.2.ECONOMIC FACTORS 25
4.3.TECNOLOGICAL FACTORS 26
5. COLOMBIAN WINE MARKET, BIEW FROM A PESTEL ANALYSIS 28 5.1.COLOMBIA IN A VERY DIFFICULT MACRO-ENVIRONMENT 28
5.2.NUANCED BY THE MESO ENVIRONMENT 31
5.3.THE MICRO ENVIRONMENT MARKED BY VERY STRONG
COMPETITION 33 6. SWOT ANALYSIS 37 6.1.STRENGHT 37 6.2.WEAKNESS 37 6.3.OPPORTUNITIES 38 6.4.THREATHNESS 38
7.IMPLEMENTATION OF A BUSINESS DEVELOPMENT STRATEGY 39 7.1.THE STEPS TAKEN TO INCREASE WINE CONSUMPTION IN
COLOMBIA 40
7.2.COMMERCIAL PROSPECTING NECESSARY FOR THE
SUCCESSFUL DEVELOPMENT OF TRADING 42
8.NEW CHALLENGES TO ENSURE THE SUSTAINABILITY OF THE
WINE CONSUMPTION IN COLOMBIA 47
8.1.DISTRIBUTION CHANNELS TO BE ADDRESSED IN THE SHORT
8.2.DEVELOPMENT OF AN EFFECTIVE ENVIROMENT TO BOOST WINE
CONSUMPTION 54
8.3.CURRENT COMSUMPTION IN COLOMBIA, WHICH WINES ARE
MORE CONSUMMED .. 56
9. PORTER'S FIVE FORCES 60
10 DIMENSIONS OF THE MARKET 64
10.1.CONSUMER PROFILE 65
10.2.SALES CHANNELS 69
10.3.SOME CHARACTERISTICS OF THESE DISTRIBUTION CHANNELS 73
11. PHYTOSANITARY REQUIREMENTS 76
CONCLUSION 78
BIBLIOGRAPHY 81
LIST OF TABLES AND FIGURES
• Sociological-demographical profile of Colombia (Table I)
• Taxe table in Colombia for alcoholic imported beverages (Table II) • Graphic N° 1: Climatic precipitations on Colombia 2018
• Graphic N°2: Wine market expectations by 2020
• Graphic N°3: Most important wine companies by sales for US$ dollars year 2017. • Graphic N°4: Consumption by varietal (% of total volume -2017)
• Graphic N°5 Wine consumption in Colombia 2017
• Graphic N°6 Which Country produce de most quality wines
• Graphic N°7 Price increase due to the new taxes applied in 2016 by the Colombian Gouvertment.
• Graphic N°8 How much money are you willing to pay for a bottle of wine? • Graphic N°9 Where would you buy a bottle of wine?
1.INTRODUCTION
Before to get in to the essential topic of this thesis, I would like to give an overview of what is the panorama in Colombia to produce wine. Colombia it does not have the climatic conditions required to cultivate the vine, that’s why it does not have the capacity to produce wines with the same quality standards as others vine producers countries as Portugal, South Africa, New Zealand and so on, since those country have particular characteristics that allow them to produce a great variety of wines with unparalleled flavors.
The characteristics of soil and climate of Colombia define a great difficulty for the cultivation of the vine. That is why wine producing companies import grape must and ferment it, adding alcohol. The result is a wine of very poor quality and obviously very cheap, which is why consumers prefer imported wines.
Internally, Colombia does not have the appropriate climate for wine production, however, has some areas in the country that have certain climatic similarities required for the cultivation of vines. Boyaca This region of the country is particularly special for the cultivation of vines due to two essential factors, the altitude and the amount of rainfall.
There are projects for the cultivation and production of quality wines, as Aim Karim vineyard, which is located in the municipality of Sutamarchán-Boyaca 140 km north of Bogta the capital of Colombia. The highlands above 2100m are cultivated with Chardonnay, Cabernet Sauvignon and Sauvignon Blanc vines, brought from France,
The vineyard located in one of the dryer regions of the Cundiboyacense highlands, began to produce wines since 1998 and today “ has around 50 hectares of vine which produce around 150 hectoliters of wine” 1 each harvest. The vineyard has become an entire laboratory, where dozens of professionals develop their degree theses with the technological collaboration of several European countries.
This region of the country is particularly special for the cultivation of vines due to two essential factors, the altitude and the amount of rainfall. With an approximate altitude of 2600 meters, these regions are in a situation at sea level similar to wine regions of France and Spain. “On the other hand, with consolidated rainfall ranging between 820 and 850 millimeters of rainfall per year, conditions achieve some similarity with French lands” 2
Graphic N°I: Climatic precipitations on Colombia 20183
This economic thesis trend to presents a review of the wine industry in Colombia, emphasizing the behavior of the consumers. In the same way, recognition of the main wine exporters worldwide, from Latin America, Europe Oceania and so on. After the wine importers analysis, strategies could be implemented in order to impulse and consolidate of the wine trade in Colombia.
The wine market is changing rapidly. Indeed, there are two opposing perspectives. The first, sees the wine sector with a pessimistic eye. If we look at the case of the wine traditional countries, where the consumption is stagned, many issues can be a source of concern.
2Auby, J.F , La économia del vino,crisis y remedios, Edition Alfaguara, 2012, 173 pages
3https://www2.sgc.gov.co/Noticias/Paginas/Comunicado-Nacional-de-las-Condiciones- Actuales-de-El-Ni%C3%B1o-La-Ni%C3%B1a---Marzo-2018.aspx
While the prices of the great wines have soared, especially for the last five vintages, making the most prestigious wines totally inaccessible to the population, the prices of the small wine states are constantly being pushed down so that it becomes very difficult for their owners to survive.
« Bankruptcies are increasing among the small importers are even the one which were already good stablished in the market. In the past years 24 wine importers have closed their companies, “La mesa de los señores “ the most iconic Brand of import wine in Colombia wil not survive 2019”44
While supermarkets are playing an increasingly important role in the marketing of wines, accounting for nearly 90% of the distribution to be carried, including hard discount, it remains complicated for wine merchants to be able to respond, particularly in terms of price, since they cannot benefit from the power of super markets' purchasing centres. It is then necessary to adapt by playing the differentiation card (advice, original wines, tastings...) in order to face the large distribution.
Another major problem, which arises in new consumer countries and particularly in Colombia, is the increase of the taxes and the way they are being calculated, they are calculated by the consumer’s price and not the price of the importer, which arise the price exponentially.
Even if between 2006 to 2016 the consumption has increased rapidly. The past two years the consomption has stagned, that can be explained not just because of the taxes increase, but by the development of public health policy (Law one glass only restricting. advertising for example). Restricted road safety policies (limitation to 0.5 g/litre) but also by sociological changes : urbanisation, shorter lunch breaks, less traditional dinners than before and above all the crisis that has been going on since 2008, in the next figure you will see the wine wine consumption expectatives in the coming years.
Graphic N° II: Wine market expectations by 20205
All these factors contribute to the drop in wine consumption. In order to avoid it, we must react effectively, by adapting marketing. This is how wine tourism develops in order to educate consumers, it will be necessary to do prevention in order to promote its wines...
The second perspective of the wine market, on the other hand, is much more optimistic. Indeed, new opportunities are emerging. Whether it is at the level of technologies, with the Internet in particular, which allows a very rapid development of online sales. The Internet has become a real communication interface for wine professionals, allowing them to reach a very large number of consumers in a short period of time.
The development of smartphones can be a key factor in the coming years. Apart from the
many applications dedicated to wine, these are increasingly used for purchases, and it is necessary to adapt to them now in order to be able to take advantage of them.
As we will see in more detail in this paper, various opportunities and threats weigh on the young colombian wine industry. That is risky but not unthinkable to develop a young business in Colombia. This is the ambition of the new young importers, they are opening wine rebars, this young business is booming in Colombia and especially in the regions of Bogota, Barranquilla and Medellin, the second largest city of the country.
The whole issue today depends on its commercial development. Whether at the level of customers, the distribution network, promotional operations, importers are implementing campaigns to increase the interest of wine. Meanwhile there is a problem entrusted to the implementation of a commercial development strategy at the colombian market.
As a fundamental part of the study, I would like to find the possible causes of the limited consumption of wine in Colombia, by means of an analysis of the current environment, as well as an approach to current statistics, and a review of the recent tariffs imposed on the product and its possible impact on the growth of the wine market.
An essential part of my work is consacrated to understand and be a part in the colombian wine industry participating in conferences, trading wine, making payed wine tastings, I want to explain the readers which is the process to import wine in Colombia, before consumers see a wine in the supermarket, at least 9 months of bureocratic procedures in Colombia have been passed, is an expensive process and very annoyed because there are many requirements to fill up, plus the slowly work of colombian public servants, corruption and so on is a unpleaseant work.
Oncethe Importing and legalizing procedure is done, you can start to distribute your wine, meanwhile you have to chose the región you want to sell your wine in, because each of the 32 differents regions have different policies, you just can sell the wine estamped in the región choosen. That makes very difficult to the importers to sell their stock they have to pay a lot of taxes to acces to the market, and since the highrodes in Colombia are very
deteriorated is more expensive to travel (Cartagena-Bogota 1200Km by truck) than (Shangai-Cartagena 7000km by boat)
Why the Colombian wine market has not taken off, despite all addverstising, investment made in the past years? Colombians consumme more wine but low quality wine that’s why europeans wines can not be democratizied in Colombia, the Price is discriminatory. Anyway is still posible to live from wine importing in Colombia, but to do so its is necessary to implemented many strategies that would be disscussed on this study.
In fact, the target of this study is to do a radiography of the colombian wine market , show its trends, and the possibilities to set up a wine importing company on the incoming years , in order to analyse the market many tolols were used, between them, reunions which the professionals of the vine secteur, as wine specialist, and y own personal experience.
2.METHODOLOGY
In order to analyze and develop my subject of study, I was pushed to meet profesionals on the wine secteur in Colombia, as visited different vineyards in Boyaca a department north of Bogota, thanks to my previous experience importing wine in Colombia I had the chance to get involved with all the bureocraric process to imported and sell wine in Colombia.
In two ocassions I met Roberto Pumarejo president of the grupo “ Exito Colombia” owned by Casino France, they sold more tan the half of the wines consumed in Colombia, he explained me how along the past years wine consumption in Colombia has certeanly increased exponentially, between 2007-2018, reaching nearly 3 liters per capita/ peryear, but very far away compare to other latino american countries as Argentina ore ven Peru.
Nevertheless, the past three years have been the hardest for wine importers, besides the devaluation of the Colombian peso nearly 30% compare 2015, the taxes decided by the colombian Goverment in order to finance the “ paix taitè” made increaase the Price of the bottle in the restaurants by 80%.
In order to properly address this issue, it is necessary to proceed in three steps. First, by studying the environment (micro, macro and meso) of the Colombian market, emerging at the moment, which will constitute the first part of this thesis.
Secondly, it is necessary to explain the implementation of this trade policy, reporting on the out and ins of the various missions I carried out among my expereince working as wine promoter in Colombia.
Finally, in a third part, we will see what recommendations can be made to increase this commercial development, how to include the new colombian inporters as new wines (organic wines) and obviously educating the new wine lovers in a country where beer is the king of alcohilic bevarages with a consumption around of 50 liters per capita per year.
Wine market is still in a new born mouvement, imported by the colombian elite as sign of recognition, the beginnings of the 2000 the wine started a gain interest between the intelectuals and the artist, thanks to the tourism boom started 8 yesr ago, new wines, new varieties get in to the wine palais of new colombian wine consumers, meanwhile wine remains unknown for the majority of the colombian population.
The axe of my analysis is based in different economic methodologies, as PESTEL, porter five porter, SWOT and so on, my target is to give the readers an aperçu not just based in theoric and rethorics economics, which in many ocassions do not take on count many varaible already present in the economy study. My experience not just as a wine importer but as a connaisseur the wine bussines in Colombia, especially in Bogota.
My experience as a co- partner of Pierre Jacques Lamat ltda, a company which has been present in the colombian market since 1970, serving throuhgt the years the best tables of the countries (Presidents- Ministeries- C.E.O of international companies) thanks to its experience and prestigy, M. Pierre Lamat has acces to the most reputaded clubs in Bogota, giving him an advantegous compare with its concurrents whom, might have good products but they do not have the market to spare their goods.
To conclude, I would like to clarify, that even if I tried to abord the subject as widely open as possible, including in the study the analysis of many different colombian regions, my focus is middle-high class clientèle, since the wines I was promoting were expensive wines to the colombian market. As I explained before europeans wines are enjoyed just for a small proportion of the colombian population (high- income- university educated and obviously living in the mainly cities).
Sociological-demographical profile of Colombia (1)
Total Population 49.633.000
Average increase of the population per year 1,20%
Life expectancy 75 years
Natality rate for each 1000 people 18,2 Mortality rate for each 1000 people 5,9
Literacy rate between 15-24 years 98,20%
Primary education rate 83.9%
Secondary education rate 73,60%
Education spending G.D.P % 4,40%
Poverty rate 30,70%
Extreme poverty rate 9,10%
GINI Coefficient 0,54
GDP (Constant prices) 333.909 Millions USD
Per capita GDP (Constant prices ) 6.999 USD
Inflation rate 2%
Unemployemenrate 10,60%
Table N°I Sociological-demografic profile Colombia Source: National profiles CEPAL 2017.
3.A PROMISING BUSINESS IN A HOSTILE ENVIRONMENT
First, before dealing with the problem previously identified, it is necessary to study the environment in which the Colombian market operates. In order to fully analyse it, we will proceed in three stages, focusing successively on the macro environment of the Colombian wine market, then on the meso environment and finally on the micro environment, all three of which are part of the Latin American trade. It should nevertheless be pointed out that adapting to the trade issue facing this young business, namely the implementation of a trade strategy, would carry out this study.
Political factors are inevitably link with Legal factors such as national employment laws, international trade regulations and restrictions, monopolies and mergers’ rules, and consumer protection.
The difference between Political and Legal factors is that Political talks to attitudes and approaches, whereas Legal factors are those which have become law and regulations, legal lis attached with the lwas applied on the country, Legal needs to be complied with whereas Political may represent influences, restrictions or opportunities, but they are not mandatory.
Economic factors : They represent the wider economy panorama so may include
(economic growth rates, levels of employment and unemployment, costs of raw materials), interest rates and monetary policies, exchange rates and inflation rates.
Socio-cultural factors represent the culture (the way of living but too the quality of it) of
the society that an organization operates within. They may include demographics, age distribution, population growth rates, level of education, distribution of wealth and social classes, living conditions and lifestyle.
Technological factors refer to the rate of new inventions and development, changes in
information and mobile technology, changes in internet and e-commerce or even mobile commerce, and government spending on research.
There is often a tendency to focus Technological developments on digital and internet- related areas. Environmental impacts can include issues such as limited natural resources, waste disposal and recycling procedures.
4.PEST ANALYSIS
The PEST analysis is a useful and simple tool used to study the external panorama of an organization or entreprenurial ideas from four fundamental factors: Political, Economic, Social and Technological.
That is why this tool generates great contributions for the execution of proposals, strategy, positioning, management, and marketing, among others, of an organization. In order to do so, it is advisable to carry out this analysis before any internal analysis procedure that has the purpose of evaluating the condition in which an organization finds itself in a specific market.
4.1 POLITICAL FACTORS
With regard to the intention of building a culture around winemaking, there are elements at the political level that may limit it. The massive imports of wine into the country are an element that obstructs the diffusion and knowledge of national varieties, however, the fact that most of the consumption is registered in the capital of the country indicates a wide ignorance of the public.
On the other hand, there is a limited number of importers on the marke especially trading Chile and Argentina wine, which makes it difficult to new importers focus on European wines because the consumers prefer cheaper low quality wines.
It is important to analyze the environment and set measures as part of a strategic business plan, so that each of these forces is evaluated against the wine industry sector in Colombia. In the first instance is the rivalry between competitors, where there is a large predominance of imports led by Chilean and Argentine wines, which cover most of the market for this drink with its variety in brand and strain
On the other hand, the bargaining power of suppliers has significantly increased due to the high interest in the cultivation and production of quality wines in the national territory,
encouraging new projects with new methods and technologies in search of a greater production with quality.
Includes variables related to fiscal policy, the labor code, trade restrictions and environmental liability laws, that is, it refers to the intervention of the state in the economy, more specifically in a sector.
4.2 ECONOMIC FACTORS
The existing small wine producers in Colombia have a competitive advantage over external elements, since tourism and consumption activities are consolidated around cultivation, production, sale and consumption.
Refers to the different factors that influence the economic behaviour of a sector such as interest rates, exchange rates, inflation rates and level of investment. The economic policy taken by the Govertment is a very important factor because it will shape the wau the investisseurs will see the economic attractiviness of Colombia.
-Sectoral policies on consumption control in Economic development at sectoral level (wine production)
-Massive imports affecting the local product Tariffs on alcoholic beverages by degree of alcohol -Specific imports (reduced number of importers)
-Price control
-Little state intervention for sector growth (mostly private investment)
-Increased local and regional investment in the creation of wine clusters)
-Use of the activity as a tourist attraction, added to the productive activity)
-Control of input inputs (grape varieties) Appearance of competition
4.3 TECNOLOGICAL FACTORS
Includes elements related to research and development of new technologies, implementation of new processes and innovation in a market. This factor allows there to be an improvement in the elaboration and delivery of products or services to the consumer.
Thanks to the analysis of the environment, a full exploration, monitoring and prognosis of the environment can be carried out, helping to detect key factors of the past, present and future of the market. Analyze. It is important to bear in mind that the PEST analysis varies according to the city or country in which the target market is determined.
It is advisable to monitor the environment, taking into account the factors chosen, making use of the sources of information that generate the most value and determining the frequency of evaluation of these, in order to always maintain a more accurate analysis and close to reality; in this way, the most appropriate strategies can be developed.
If we analise de colombian situation under this angle, we can define, the volatitly of the moment Colombia is on: Massive venezuelian migration, high corrupttion perception, social and political instability, just after two years for the world known “peace treatment” whic involved the Colombian state and the FARC, there are many of their army who have been not able to get back the the civil society, the employment rate it has reachen its higher point since 2009, after the financial crisis, day after day more people are losing their Jobs.
The wine education is incipient, meanwhile, there is a potential of development, but in order to achieve this operation with succes even the state must promote a healthy consumption of wine, and putting wine as a priority to develop culture and increase cultural interest between the young populations.
The increasing trend in wine consumption in Colombia reflects the potential of the market in the country. The study reveals indicators that show that wine is not only used in social events, but also as a table and drink companion in social events.
These factors, together with the wide range of prices and varieties, allow us to conclude that there are wide levels of acceptance, and that activities tending towards the consolidation of wine culture should focus on socialization and information about the benefits and goodness of wine.
The country's current wine supply is limited by the few parts of the national territory that have the right climate, however, the availability of grape varieties for wine is one of the main obstacles in the consolidation of national production.
However, given the level of specialization achieved in local production, it has been possible to consolidate its own procedures and techniques applicable to the particular case. For this reason, the research activities in the vineyards, in particular with the processes of elaboration and fermentation, allow to obtain results beyond the product in question.
-Changes in consumption habits (variations in per capita consumption) Government research expenditure
-Increase in the use of wine as an accompaniment totable Competitor development.
-Changes in alcoholic beverage preferences (21% of total alcoholic beverage sales, ranked second)
-Availability of temperature control elements, cultivation and harvesting of the vine. -Some vineyards vineyard has become an entire laboratory, where Perception of product quality in any of its dozens of professionals develop their degree thesis with the Presentations (national or international) technological collaboration of several European countries.
5.COLOMBIAN WINE MARKET, BIEW FROM A PESTEL ANALYSIS
In order to have a better analyse of these factors, noted from 1 to 5, to understand the viability of the opportinuty (5 beign the highest notation) .We start with the Political forces. First of all, political factors refer to the stability of the political environment and the attitudes of political parties or movements. This may manifest in government influence on tax policies, or government involvement in trading agreements.
5.1 COLOMBIA IN A VERY DIFFICULT MACRO-ENVIRONMENT
First, the macro environment will report on the opportunities and threats of the Colombian wine market, the aim is to take stock of all the major trends in society, whether political, economic, social or cultural.
Regarding opportunities, four appear in short and medium term:
The development of emerging wine lovers specially from the generations call the Millenians between 25 to 34 years old, with all the new migrants to the big cities as Bogota-Medellin-Cali all these cities represent potential future markets for internal development
4
The development of online sales: it has grown at a rapid pace, by 30% per year since 2013, with a market of nearly US 2 billion in 2017 worldwide,
resulting in opportunities to develop very important distribution channels The recent decline of dollar compare with the colombian pesos, which has been established of the day this report was written at US 1 = 2.900
COP, restoring
competitiveness to the colombian devise, which also helps the nationals to get imported products at a better Price, is for the moment an opportunity, but it remains ephemeral
2
The ageing of the population in Colombia: the oldest people often have a higher purchasing power (more credit, inheritance received...) and will therefore consume more wine, this will be true in the high income population but also the middle class, meanwhile to enjoy completely this fact, wine education is essential
As far as threaths are conderned:
The stagnation in wine consumption from a socio-cultural point of view: it has fallen by 10% the past 3 years in Colombia, and is expected to decline further in 2019, with the increases of the taxes, which directly affects the wine market. This decline affects both on-trade and off-trade consumption, with only latin-amaerican consumption expected to increase slightly in 2019.
5
The urbanization of the population: indeed, households have less space to store wines, lunch breaks are shorter and shorter so that people buy a sandwich, more and more people consume wine in rural areas
3,5
The development of public health policies: these include the One glass law, which restricts advertising, but also various messages such as alcohol abuse is dangerous to health, to be consumed in moderation or the fight
against road safety (limitation to 0.5 g/l)
Average threats 4.6
In summary, with a score of -1.6, the Colombian Market has an unfavourable macro environment, particularly due to very serious threats to the entire wine market.
5.2 NUANCED BY THE MESO ENVIRONMENT
Now, the meso environment will focus on all the actors who will interact on the wine sector; here again we will study the Colombian market, which is also part of the Latin Aerican wine trade.
In terms of opportunities, only two are emerging:
The development of actions to promote imported wines, such as those carried out by the supermarkets and the HORECA’S (Hotel-Restaurants-Cafes )as well as the existence of numerous professional associations. The latter are true ambassadors, make it possible to improve the image of the wine or to increase awareness, thus they can have a positive impact on sales
The "French paradox" of showing that the French are among the worlds biggest wine drinkers, and at the same time have the second longest life expectancy. This makes it possible to thwart the traditional image of wine, associated with a poor lifestyle, a dangerous product, and to show the virtues of moderate consumption. This will be particularly appreciated abroad
3
Average opportunities 2,5
As for the threats, we can also distinguish two major ones:
The ever stricter Colombia regulations: for example, many certifications are required because wine is a food product, very demanding on terms of traceability as example The “INVIMA” Colombian agency of phisionatary register, an agency where corruption a inefficiency are a daily matter, in 2016 it was noted as the worst
state colombian agency by the citizens. Besides all this facts, just to get the authorization to import wine is a slow and expensive procedure,; the total cost of the procedure could reach 2.700 euros The poor wine eduation in Colombia: in order to overcome it.Many measures have been put in place, such as grubbing-up premiums or conversion aid. The prices of small wines are pushed down, there are just the big supermarkets which are allowed to import big quantities of wine at good Price, they mainly buy the wine from wine traders and not small vinegrowers
2,5
Average threats 2,25
.
Thus, the meso environment with a score of 0.25 is very slightly favourable, particularly thanks to good opportunities abroad.
5.3 THE MICRO ENVIRONMENT MARKED BY VERY STRONG COMPETITION
Finally, in order to complete the environmental analysis of the Colombian wine trade, we will study its microenvironment, i.e. the intensity of competition within the country between
big supermarkets, importers and wine cellars. You will find in the page 44 the different scoring elements permiting you to establish a ranking between Porter's different forces. The rivalry of direct competitors is the essential element, which is one of the main threats to the Colombian market. While there are more tan 100 traders in Colombia, it remains increasingly complicated to establish oneself, whether at the level of distribution networks (HORECA’S for example), whether at the level of the price war limiting margins ever more, but also at the level of the need to anticipate and differentiate oneself from the others.
Thus, building exclusivities seems to be one of the only ways to be able to set its prices, as all the other wines can be found among competitors, on Internet, meanwhile to get this kind of exclusivites either you bay thousand of bottles ot once or, make a contract arrangement with the winery and you compromiso to buy a certain amount of botlle annually forseveral years.
This very strong rivalry is the main limit to the commercial development of the new wine importers: it means that we must align themselves with the prices of the competition, and that they do not have the right to make mistakes under penalty of losing the market given the low change costs for the final customer.
The second element, which is essential, is the threat of newcomers. Indeed, it is very simple and fast to launch your own business, so you can create many new ones every year.
While it is true that reaching a critical size is already much more complicated (allocation of grand crus, storage costs, cash flow, renown...) starting in the sector is within reach of a large number of people, who will compete, even in a ¿significant way, with existing businesses.
For example, many Chinese traders have settled in Bogota, which will limit access to the market for smaller importers, because they have a dominant position thanks to the liqiudity they do dispose. All this, is of course a real and serious threat to the new Colombian importers, because just the big importers might survive to the chiness investers as it had
happened in many other secteurs of the economy.
Thirdly, we find the bargaining power of big surfacers to be quite strong. If we look only at European wines, this power will of course be low, or even non-existent, unless they buy thousand of bottles of wine as they do with Chilean and Argentinian wines.
On the other hand, the small structures, restaurants and neighborhood supermarkets are concerned, it is very difficult to have a favourable balance of power as the sector is totally fragmented: customers, if they do not win their cases, will go elsewhere and make competition work.
The balance of power is therefore to their advantage; wine consumption in Colombia is stagned the past years. At the same time, the water supply is increasing. Here, water is therefore a substitute. We can also mention strong alcohols or beer, which are widely consumed in the evening, in bars, instead of wine, for instance. Sodas, cocktails... are as many other possible substitutes.
It is therefore necessary to take care of the image of wine, to educate consumers, hence the importance of the various promotional actions. Nevertheless, it should be noted that a true wine lover will find it difficult to consume anything else during a good meal or for a special occasion, which makes it possible to qualify this analysis on substitute products.
Finally, we find the bargaining power of suppliers to be medium to low. While big supermarkets as “ Carulla, Éxito”, particularly through the allocation system, which allows each of them to have a certain number of crates, small stores, new importers have more difficulties in establishing themselves.
Every day there are more and more useless rules, laws and filling up forms to import legally wine in the country, all tis bureocracy only reduces the numbers of people interested in put more wines inthe market, therefore, the wine suppliers never ,ind top ut good quality products in the market, and just left for years the same products on the market, not giving the opportunity to the average colombian to know and drink good wine.
To conclude the analysis of the macro, meso and microenvironment, The main threat is of course this strong competition between the big and small structures, and the lack of wine education, but others also weight heavily, affecting wine consumption and spreading wine around others city of the country. We shall note that low national awareness can also be problematic.
On the other hand, some opportunities seem to be emerging and clarify the picture, particularly with a view to development ways of getting people interested about wine.We easily understand that in order to implement a commercial development policy within the colombian market , it will be fundamental to stand out, by offering different products, a unique commercial approach, by rigorously selecting markets and distribution channels.
This will be the subject of the following section, which will detail the approach taken to ensure commercial development.
6.SWOT ANALYSIS
In order to complete the analysis of the company in its environment, we will draw up a summary table in the form of a SWOT analysis, highlighting the strengths and weaknesses of the Colombian market
6.1 STRENGHT
- Favorable taxe change Colombian pesos COP- US Dollar, allowing people to get more products with the same amount of money
- Diversity of wines to propose, different prices, varieties, tastes, the wine is entirely open since Colombians do not have any edcuation about wine.
- In Colombia 80% of the population is between “20-60 years old “ ¿??makes a big potencial to develop a new market
- Colombia is very well situated, having direct connections with two oceans, Pacific and Atlantic, it makes an open to gate to the new products.
6.2 WEAKNESS
- The wine education is incipent, besides the gouverment effort to promote wine growing; there is not any organisation in Colombia, which is specialized in wine.
- The national income is low to acquiererd high quality wines, Colombia does not produce quality wines, people prefer to consume fruit juices or sodas, which are way cheaper than, wine.
- The lack of wine enthousiast for the Colombian people is because they are not interested in paying more for a better product, they preffer to buy cheap quality in order to save money
6.3. OPPORTUNITIES
- New wine market, it can develop easily if people educated and get curious themselves about wine.
- We can use the tourism boomed the past years in Colombia to introduce wine in differents regions of Colombia.
- Art- gastronomy- music; the diversity of the regions in Colombia helps to créate different maridajes (wine-food), the artistic scene in Colombia is incresing, this kind of events are the best to sell wine.
6.4. THREATHNESS
-Economic and Political instability.
-Fiscal instability, the taxes could increase at any moment.
-Poverty, by “Cepal the poverty in is increasing due to tte massive arrival of around 2’000. 000 venenzualiens the past three years in Colombia”6
- Insecurity, eight countries in the world with most murders in 2016.
By looking at the strengths of the Colombian market, we can highlight two of its key success factors, which will allow it to stand out. The first concerns market exclusivities, which are a real asset since they give great freedom, particularly in terms of sales prices. The second key success factor is represented by the pottential of the market, in order to develop it the actions have to take place which include the many events, tastings and other highlights of the wines to which we will return later6
6Sudy based in statistics given by the DANE, written by Daniel Samper, April 2018. « Dinero », Colombian economic magazine
7.IMPLEMENTATION OF A BUSINESS DEVELOPMENT STRATEGY
The colombian wine market has many key factors pottential but few factor which it may pay attention: “The past 15 years the wine consumption has increased exponentially” meanwhile the past 2 years have been stagning, meanwhile it has still full expansion, the most important is to find good wine distributors, develop build customer loyalty, first at the regional level, then at the national level.
In terms of litres, the import market is 12.3 million litres. The supply of fractionated wines is strongly concentrated in Chile, which represents 58% of sales volume. Argentina is the second largest supplier with sales of 21% of total volume in 2016. Both suppliers, although very strong, have registered dissimilar behaviors in the period 2007- 2016. In the next figure we can see the most important wine companies by sales in 2017.
Graphic Nº 3. Most important wine companies by sales for US$ dollars year 2017.7
“While Chile has always been above 45% and has managed in recent years to consolidate its market share at a value close to 60%, Argentina's performance has been poor and has lost market share”8
7Most important wine companies by sales for us$ dollars year 2017. Source: SUNAT- consulting company 8El TIEMPO, Carlos Irragori, pag, 28, economic section, 24 March 2019
“Spain has also lost market share and in 2013 it represented half of the market share reached in Argentina. 2015 represented only 2%). The United States, on the other hand,
has achieved a very pronounced quota increase (from 3% in 2009 to 11% in 2017). Italy, on the other hand, has maintained between 1 and 2 per cent of the quota throughout the period”9.
“Bottled wine imports in 2016 amounted to $59 million, a growth of 354% since 2010. The supply of wines is concentrated in Chile and Argentina who represented 55% and 22% of the total value in 2013. Spain is the third largest supplier and has registered stable values in the period 2000-2013. On the other hand, France has seen its share vary negatively to only represent 4% of the value total imports (compared with 10% in 2000 and 16% in 2012”10
In terms of average price, there is a clear difference in positioning and strategy between New World suppliers and Old World suppliers. While the former Old World suppliers position themselves in the high-price segment.
In order to ensure the implementation of a relevant and effective trade policy, various actions must been carried out, taking into account budgetary and organisational constraints. They most be carried out in several stages, in a thoughtful manner. The aim was to increase the reputation and image of wine and gastronomical culture in Colombia in parallel with a major prospecting mission in the region. Finally, I’ll detailed the steps to carried out a succesful strategy
7.1. THE STEPS TAKEN TO INCREASE WINE CONSUMPTION IN COLOMBIA
The generalization of a regular distribution of flyers has to be introd how much money are you willing to pay for a bottle of wine in a supermarket, wine cellar and so on. Since the
9Pierre Lamat, conférencière and wine importer, « overview of colombian wine” statistics given by eurostat and colombian commerce ministery
10 Mtimet, N., & Albisu, L. (2006). Spanish wine consumer behavior: A choice of Experiment approach. Agribuiness, vol 22 , 343-362
wine in these áreas and is essentially limited to the perimeter of the district, it is the latter that was naturally chosen as the place of distribution, although it slightly exceeds it.
In order to benefit from maximum visibility, this strategy must be not just both in the mailboxes; windscreens of the cars were chosen. But via mail doing monthly newsletters these distributions should take place in two stages: first, a neutral prospectus without an offer, in order to simply make the people aware about wine (with different varieties, producers countries and facts then afterwards, a second flyer or newsletter, with a commercial offer.
In order to attract as many people as possible, this one should of course include a discount, to the bottle or cardboard, a time limit, as well as to take into account a certain seasonality, by proposing a rosé for example as good time approached.
Even if the returns on this type of action are quite low, in the order of 1 to 2 percent, this makes it possibleto get known wine better. Some people simply come to see the products following prospectuses received previously, this is part of the indirect benefits; they have been numerous and often successful.
Moreover, many mailing actions can be carried out, taking care to make a selection beforehand. From the potential customer file, many potential targets were selected for a commercial offer; the latter was in addition to the distribution of flyers. This made it possible both to boost sales and to ensure that the wine remained in the minds of customers, even if they did not buy as a result of the offer. It is an effective and inexpensive way to strengthen the wine education in Colombia.
On the other hand, still with the aim of making the wine consumtption in Colombia bigger, partnerships should be established with different structures as galleries restaurants bars’s Indeed, this type of actions, are very popular in Colombia allows users to enjoy deals in terms of restaurants, leisure, well-being.
wines, as well as a short introduction to oenology coupled with an explanation of the wine lasting approximately one and a half hours, all for (50.000 COP=15€) for two people. This operation will make possible to gain a lot of visibility,
7.2. COMMERCIAL PROSPECTING NECESSARY FOR THE SUCCESSFUL DEVELOPMENT OF TRADING
Establishing and carrying out an effective and relevant business development policy naturally required extensive prospecting. This was going to bear fruit in a more direct way, in fact wine importer’s, vine growers should hather together and créate and association in order make more visible campaigns.
This prospecting thus constituted the core of the response to the problem identified (lack of education), and it was therefore necessary to devote all the means to its implementation. To do this, various questions had to be studied beforehand, such as the choice of distribution channels, geographical areas or type of clientele.
First, regarding the choice of distribution channel, it is mainly the HORECA’S that has been chosen. On the one hand, the latter makes it possible to achieve high margins; it is a very promising channel in terms of image (unlike mass distribution, for example) and the multitude of existing restaurants obviously offers many opportunities. This channel also ensures good visibility of the wines in different districts and types of establishments.
Thus most of the prospecting must focus on the HORECA’S, taking care to select the rights places:Those that enjoy both good attendance, in order to get important orders, those that have a good image, which will generate a positive feeling for the wines, by excluding all those that have a bad reputation (bad payers, bad reception...).
Different approaches have to be use to gain custumers, which could range from making telephone contact to meeting unexpectedly in the restaurant. A catalogue of products defined upstream had to be presented: it contained a large number of wines to meet a significant demand for this type of wine from the HORECA’S. Tastings of certain
references could then be organised to trigger orders.
Concerning the prospecting sites, several rules had to be defined following the first conclusive results: first of all, avoid "scattering" throughout the Transmilenio (Bogota transportation system), due to the long travel times required for prospecting and then for deliveries. It was indeed more sensible to focus on a few kilometres, around the city centre, given the number of potential wine lovers, while allowing prospects and deliveries to be grouped and rounds optimised.
Secondly, to address both large institutions and some smaller ones: while the former generally allow large volumes to be sold unlike the latter, they are more difficult to address and will require more effort in terms of negotiation and prices. Smaller ones are more affordable, and it may sometimes be more advantageous to have several small ones than one large one. It also avoids the risk of dependence on a customer, and strengthens the company's negotiating power.
In addition, prospects with a limited number of references should be the main focus: if a restaurant has more than two hundred references to its menu, it will then be difficult for it to order large volumes for each wine (costs and storage space), it was then more relevant to target those with more limited menus.
As we can see on the graphic below, colombians have preference for cabernet sauvignon, the mainly variety of chilean and Bordeaux wine, but they buy chilean wine becese of the Price, four times cheaper than a french wine.
11Graphic N°4 Consumption by varietal (% of total volume -2017)
The results of prospecting proved to be up to expectations. If we analyse the impact seen in other kind of campaings promotting other products, The HORECA’S are the key to develop The second step is implementing a commercial policy to ensure that all these potential wine lovers would buy wine again and not just in specail occasions.
This should be seen as an original way to promote wines. The idea was to offer a tasting to the people present in the establishment who can then buy wine, by the bottle or by the glass. In a way, it is a sales aid offered to restaurateurs, who do not always have the time to promote their new products or make them discover them.
That's why they are always very enthusiastic about this kind of animation, which allows them to get other orders by following. Here again, it should be kept in mind that wine lovers loyalty is essential, and that it is necessary to provide a "plus" for the launch of new products.
In order to increase and strengthen the implementation of trade policy, other types of prospects should be approached in parallel. Two examples as follows:
As for Young wine importers in Colombia dealing with wine and spirits wholesalers is a daily matter, who themselves distribute to the regional HORECA’S in their region. This
Consumption by varietal
‐% of total volume ‐2017
Sauvignon
distribution network, which is more difficult to penetrate, particularly in terms of negotiation, requires very significant efforts regarding prices and requires relatively low margins. In return, it makes it possible to sell large volumes, and to avoid the heavy task of contacting countless restaurants in each región
“The wine market in Colombia is constantly changing. According to information provided by the president of Grupo Éxito, Carlos Mario Giraldo, per capita wine consumption in Colombia has increased from 400 to 750 milliliters in the last 5 years”11.
To develop the wine industry, therefore the wine consumption is necessary to target the type of establishments: i the large and fairly high-end restaurants, bars and brasseries that selected: this ensured good visibility for wine and to attrack visitors and a good image. Once again, to avoid any risk of competition between customers, granting “mini exclusivities” over an entire street or area could prospect not all HORECA’S, in particular.
The method which should be used once a week, commercial tours with prior appointments, punctuated by tastings which, must be organised in order to keep the fidelity of the HORECA’S.
Then, as orders and therefore deliveries arrive, is very important to optimize the time, chossing an área where is the target to deliver and avoid traffic jumps. then new surveys have to be undertaken, which made it possible to get it know exactly what arethe customers are looking for.
The main difficulty could be to face the presence and very strong competition from other alcools and beer for wine is still a very low consumer demand. To do this, tastings should be systematically set up, accompanied by a major marketing effort to promote wine: distribution of slate, ice bags and promotional glasses, , to each new customer. In addition, wine tasting evening bars should be organized, with a focus on products, and once again.
The objective being to promote and develop the wine consumption, different references should be placed with the HORECA’s throughout the major cities. The results of this action letting know wine, should take over a year, since many wine amateurs want to really get it known the product, tasting different varities, getting know more about the culture of wine, history and so on.
Thanks to this good type of campaigns, all that remains is to develop the wine consumption in a thoughtful way, always taking care to select the right places, maintaining marketing efforts, so that wines gradually takes the place in the daily life and asserts itself as an essential beverages in consumers' minds.
In short, the implementation of a commercial development policy within in order to increase wine consumption must involved extensive prospecting. The latter involved the region's HORECA’s, wholesalers and cellars, could result of very encouraging results and a well-developed customer portfolio.
Now, it is time to give a new impetus to the wine, naturally go deeper about the knowledge of this milenial beverage and with the aim of increasing potential markets.
Many opportunities remain to be seized, and the development of the wine consumption in the country is a good illustration. In order to truly implement a very profitable and sustainable commercial policy for the wine consumption, let's look at the new challenges facing the company.
1. 2. 3. 4. 5.
6. 8.NEW CHALLENGES TO ENSURE THE SUSTAINABILITY OF THE WINE CONSUMPTION IN COLOMBIA
While the Colombian people are a young and growing, some opportunities seem to be emerging on different scales. In order to increase its wine consumption and consequently its turnover, it will be necessary to think about new ways of development. In particular, it is the trading part in particular that must receive all the necessary attention since it allows large volumes to be sold. In the long term, this part should represent more than 90% of turnover; in fact the key of the wine developtment in Colombia is the retail market.
Talking to the people making them eager to consume and know more about wine, compared to barely 10% whole saler part, whose activity remains very moderate and delicate to develop. In this way, it will able to make various recommendations, quantified, and study the issues to be addressed in order to truly "sit" an effective trade policy, by perpetuating and promoting wine consumption in Colombia.
The graphic below shows the share of the different types of wines in the colombian market on 2018.
Graphic N°5 Wine consumption in Colombia 2017
