Wine Industry

Topics: Wine, Alcoholic beverage, Marketing Pages: 13 (2949 words) Published: July 21, 2009
Wine & Spirits
Industry Analysis

Team 6
SMBA 04 • Strategic Marketing MKT 606 • November 22, 2008 Hayden Olson, Natanyi Carter, Maurice Campbell, Natasha Mohl, Tameika Dozier, Majed Soboh, Allan Topher [pic]

Table of Contents

Executive Summary3

External & Internal Environment4

External Environment4

Technological Trends4

Consumer Trends5

Governmental Trends5

Economic Trends6



Internal Environment7



Market/Submarket Analysis8


Market Trends8

Distribution Channels9

Customer Analysis10



Competitor Analysis11

Direct & Indirect Competition11

Top Three Competitors11



Constellation Brands13

Comprehensive Strategic Assessment14

Using Strengths to Maximize Opportunities and Mitigate Weaknesses14

Strategic Recommendation14



Executive Summary
The following is a strategic industry analysis of the wine and spirits industry. The predominant themes discovered through research are the following: • Wine and spirit consumption continues to grow despite the global economic recession • The growth is primarily in two demographic segments, Millennials and Baby Boomers • There is an emerging trend for a healthier lifestyle which could lead to tremendous growth is currently in small segments such as organic/biodynamic wines

Three industry leaders were investigated to determine internal strengths, weaknesses, and overall success factors that are required to operate successfully in the industry.

• Diageo - is the world leader is alcoholic beverage production with top brands such as Crown Royal, Jose Cuervo, Smirnoff, Guinness, and others.

• Brown-Forman - is the current consumption leader for the United States, it’s portfolio of brands boasts classics such as Jack Daniels.

• Constellation Brands - is the world leader in wine production with labels like Robert Mondovi, Clos du Bois, and many more.

A comprehensive strategic analysis of the above competitors and the industry was conducted and a strategic recommendation for one of the companies emerged. Based on Diageo’s strengths and apparent weakness in the wine segment of the market, it is recommended that they convert the top two wine brands - Sterling Vineyards and Beaulieu Vineyards - to organic/biodynamic wines. This is a massive project that would be limited to a company the size of Diageo and would position them to become the world’s premier organic wine producer for the long-term, thus strengthening their market share in the growing wine segment. [pic]

External & Internal Environment

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External Environment
Despite the global economic recession the Wine and Spirits industry is experiencing increases in both profits and consumption. This growth isn’t a surprise to most analysts, and it is often said that the bleak economy contributes to the sale of wine and spirits. While this statement may hold some truth, there are many trends both current and emerging made that have had a direct affect impact on the success of the industry.

Technological Trends
In an industry where products are produced by a series of chemical reactions happening naturally, there have been changes in the process and speed in which information is gathered and processed. The two technological advances that have had the greatest impact are CRM systems and global supply chain networks. CRM systems track sales and distribution figures to allow for more accurate forecast of demand for products in the market. The speed of information processing and communications enables the companies in the industry to more effectively serve the needs of the end consumer. To date, the internet commerce trend has not had much of an affect on the sales of wine and spirits. In...

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