The growing wine tourism market

Thursday, 22. December 2016 - 11:00
Entrance to conference centre, Spier Wine Farm, South Africa
After several days of touring South Africa’s Cape Winelands, it seems strange to sit in a conference room at Spier Wine Farm and listen to South Africans ask themselves what they can do better when it comes to tourism. To an outsider, South Africa wineries seem to have struck a balance between the closed world of many European wine regions, and the tourist extravaganza that is Napa Valley. Their wineries are not only open and friendly, but also destinations in their own right, offering trails, restaurants, cafés, food stores, wildlife and more. 

But there is one very good reason for the South Africans to be asking themselves this question – gastronomy tourism is on the rise internationally. Wine regions that don’t take advantage of this trend stand to miss out on their share of an ever-expanding pie. And so, in early November, South Africa’s first ever The Business of Wine and Food Tourism conference kicked off, with a combination of presentations from experts and smaller workshops.

The big trend
“One trend holds true across the world,” said Mariëtte du Toit-Helmbold, CEO of Destinate, a destination and tourism marketing agency. “People want to travel despite the uncertainties, and want to connect deeply with the places they visit.” She said people want to know what’s in the food they eat, and want to understand the people behind the brand. “Travel by millennials is on the rise and the trend is global. Almost 60% of them travel with friends. Speed, adventure and bragging rights are incentives for millennials, who also value the ability to make spontaneous decisions on holidays.” Gastronomy is crucial to this group. “We have a new breed of food-conscious traveller. They are eating and sipping their way through destinations, and food is becoming the lens by which people learn about place.”

Tourists also want to immerse themselves in local life, she said, which is why services like Airbnb are increasingly popular. Toit-Helmbold acknowledged that South Africa’s history meant it had a problematic image abroad, but said, “Our story isn’t a pretty one, but it’s an interesting one, and interesting sells.”

She also said that it was crucial for South Africa to build its wine tourism business. “It’s got few barriers to entry, so people can enter the industry and start benefiting quickly,” she said. “It’s a significant revenue generator and it has the potential to create thousands more jobs.” The goal, she added, was to establish South Africa as a leading wine destination in the global arena.

Wine business expert Jonathan Steyn agreed, and said that tourists now live in the “experience economy”. People once wanted tangible commodities, which they could buy and touch; next came the ‘staged experience’, where people consumed situations that had been created especially for them, such as those found at Disneyland. But today’s consumer, he said, wants “guided transformations”, where authentic experience is the product.

Steyn also urged participants to think about the phenomenon of retro that’s popular at the moment – “of nostalgia, of craft, of going back to discover a better and more romantic past when things were simpler and more natural,” as he put it. This, he said, was very prevalent in cities, and the wine trade should use it to create urban portals or gateways to the wine lands. An example would be a wine bar that showcases the output of an entire region, so tourists can get a sense of the total experience on offer, before they go wine touring. “Why cities?” he asked rhetorically. “Because there’s been a massive rate of urbanisation over the past 100 years,” leading to a loss of identity for urban dwellers and “the removal of meaning of things through commodification and globalisation.” Now, the consumer wants to spend time with people, and immerse themselves completely in a new world. To make this happen, “the brand story is vital,” he said.

At the winery

International wine consultant Peter McAtamney told the conference that half of winery revenue in Australia, New Zealand, South Africa and the USA now comes from direct-to-consumer (DtC) sales, and the key to making those sales is an outstanding cellar door experience. “Eighty-eight percent of direct revenue starts with a visit to the cellar door, and 85% of club sign ups happen at the cellar door,” he said.

McAtamney said it was crucial that all winery systems be integrated, from the software and processes to the communication strategy, and that everyone in the business should understand the value of DtC sales. McAtamney noted that young marketing people will want to communicate through social media, but that it was important that they only do so if what they were doing was in line with communication and strategic goals. “Is social media the best use of their time?”

He then said it was important to treat each cellar door customer as an audience of one. “Move away from a product demonstration, to a learning, pleasure-based experience,” he said. Part of this involves moving from free tastings to paid tastings, pointing out that the average spend from people who have paid for a tasting is higher than from visitors who received a free tasting. McAtamney cited figures from the Silicon Valley Bank that showed that the average spend from someone doing a seated private tasting was $392.00, versus $75.00 for someone doing a standing tasting at a bar. “Create an experience,” he urged the audience.

The next step, he said, was for winery owners to work with tour operators to create and sell these experiences. “Form full partnerships with restaurants and accommodation,” he said. “Deliver excellence at the cellar door.” And then, above all, continue to sell directly to consumers once they are back in their home markets. “The key is creating an experience that can’t be copied by anybody else,” he said, noting that “competing in the direct-to-consumer space is now essential.”

Speaker Dr Robin Back, from the Rosen College of Hospitality Management at the University of Central Florida, also presented research on the thorny question of whether cellar doors should charge tasting fees or not. “Previous research conducted at six wineries in Texas – three that charged and three that did not – had indicated that visitors who receive a free tasting purchase more wine,” he told Meininger’s. “This was attributed to the norms of reciprocity.” Research that he’d conducted at a single South African winery found there was no difference when it came to free standard tastings. “However, for the premium tasting, visitors who received a free tasting purchased less wine.” Dr Back added that feedback from tasting room staff indicated that visitors who received free tastings were “greedier” and “more demanding”. His conclusion? “If you have confidence in your product, charge for a tasting. A paid tasting will not alter purchasing behaviour, and in the case of premium tasting experiences, may deter visitors who have no real interest in purchasing wines.”

There was plenty more advice from the speakers at the conference, but there was one recommendation that they all made – make sure you offer visitors to your cellar door fast and free wifi. Visitors will want to take photos and share them instantly, and if you enable them to do so, they will do your marketing for you. After all, consumers trust recommendations from other consumers more than they trust marketing.

The conference-goers themselves proved this. After each day’s proceedings were over, delegates wandered around Spier Wine Farm, clicking, tweeting and Facebooking away. At some points, Twitter nearly exploded under the weight of conference tweets. Which all augurs well for the next conference. 

Felicity Carter
This article first appeared in Issue 6, 2016 of Meininger's Wine Business International.