TO:Donald Triggs, President and CEO, Vincor International Inc. FROM:Vice-President, Marketing and Business Development
DATE:September 19, 2009
SUBJECT:Growth Strategy for Vincor
Vincor needs to align itself in the marketplace such that it can continue to be a market leader and grow internationally. The Canadian wine market is stagnant with limited growth opportunities in a few segments - red, premium, varietal, and ice wines. Supply is always a big concern and government regulations for the sale of alcohol must be considered. As a result of the changing environment, new prospects in the market and strategic growth in external markets (international) should be analyzed.
Going forward, Vincor’s growth strategy needs to focus on markets where they can have substantial market penetration and be highly successful. The opportunities are as follows:
1) Expand into international markets via acquisition and restructure the current debt to reduce interest costs. Capitalize on the popular brand name in the new market to achieve significant foreign growth.
2) Varied approach to cost reduction and focus on niches within Canada. Recover a portion of the emerging grey market by developing new product packaging for the low-end wines (plastic or boxes).
3) Build mutually beneficial partnerships with new glass bottle suppliers and develop a sales channel that will induce economies of scale for the price of bottles and increase margins; or renegotiate with current suppliers to reduce costs and provide incentives by signing an exclusivity agreement.
4) Zero in on the ice wine consumers by meeting the demand. Exploit the Inniskillin brand in the Canadian premium wine market in order to gain market share.
5) Develop a new product internationally through a partnership with a winery or vineyard by leveraging Vincor’s strong management team, international award status and proven sales force to sustain Vincor’s growth...