Mapping decision-influences along wine industry supply chain

The varied factors that influence the decisions of wine distributors and sellers have been revealed as part of a four-year research project undertaken at the University of Adelaide Business School.

Funded by GWRDC, the project has delivered findings across several published papers, reports and a final project paper titled: ‘Mapping decision influences along wine industry supply chain’.

Several papers and the individual research outcomes of the various supply chains are published on the Wine 2030 website.

The research was completed by Steve Goodman, Senior Lecturer in Marketing and Program Director Higher Degrees by Research at the University of Adelaide Business School and adjunct Marketing Lecturer Cullen Habel, with the support of PhD student Teagan Altschwager.

‘The goal of the research was to first identify the various exchange points along the wine supply chain and then find out what influences the decisions that are made at those points’, Dr Goodman said.

‘All our previous research has examined what influences a consumer’s decision to buy, but the consumer can only buy what is offered in retail –hence the need for further investigation of the decisions made along the supply chain’.

The project surveyed and interviewed retail store managers, owners and staff, restaurateurs and sommeliers, distributors and importers across three markets: the US, China and Australia. Those surveyed were asked to consider the importance of influences including profit margin, distributor, taste, supporting material.

Dr Goodman said the research showed that the ‘pre-approach’ is the critical stage in the relationship between wineries and the supply sector – this means before trying to sell through these outlets, ask questions and look at the supplier’s customer-base and region.

‘Build your understanding of how the supplier or distributor conducts their business to see (a) if your wine is a good match and (b) how you could tailor your approach to align with the goals and operations of those along your supply chain’, he said.

‘The outcomes of this research identify for each business category (eg high/low turnover, high/low margin etc) a different set of influences’.

According to Dr Goodman, while there was no one right answer that covered the whole market there were some common themes that emerged from the surveys.

‘But, more importantly, many of the things that influence a buyer’s decision are simple to implement and are not necessarily costly for the winery’, he said.

Dr Goodman said a common influence in several market segments was tasting-support and visits from the winery’s winemakers and staff.

‘Interviewees acknowledged the value in their staff “knowing” the winery; better knowledge helped sell more product’, he said.

‘We also found that that many of the restaurants with fine wine lists actively sought wine that was not commonly available in local off-premise retailers. Restaurants saw this as a way to offer a unique experience to patrons. It was also a mechanism that left no room for a direct ‘retail/restaurant price comparison.

‘Possibly, distributors and wineries could review their points of sale with this in mind– sometimes not being well-known is an advantage in the restaurant space’.

Both on-premise and off-premise suppliers in Australia and the US also suggested that ‘ease of doing business’ is important when they decide what to sell. ‘After-hours ordering’, ‘accessing stock at short-notice’ and ‘online ordering’ were rated as being as important as ‘the relationship with the rep’.

‘Really small changes in the way you communicate your brand and story can influence the decision to stock your brand’, Dr Goodman said.

The research results from each supply chain category have been mapped out using  ‘easy-to-read’ and understandable radar plots.

‘We wanted this research to be easily understood and provide simple insights to assist wineries’, he said.

‘Honestly, even if you just look at the pictures in the papers we’ve presented you’ll see something that hits home and helps you tailor your offer to the right market and match it with the right communication material’.

The final GWRDC report will be published by the end of March 2014.

To view one of the radar plots that maps out the decision influences of the supermarket and liquor chain markets in the United States, Australia and China, click here.

steve goodman