First pick 2010

$%#@*&!

This wine business is hard work!

We started our 2010 harvest last Thursday (8th April 2010) and, while we expected a smaller crop than last year doue to the bad weather at flowering and the cold weather in January last, as the grapes are coming in, it is much smaller than we thought. In some varieties, particularly the chardonnay, we are down over 50%. Pinot and Syrah is not so bad, but also smaller crops. If you think about it that means for the same inputs, we get less grapes (read that as less wine to sell), and at a higher average cost per tonne. If we have to buy in grapes to plug any demand gaps, that is a double-whammy on the budget and not pleasant to contemplate.

Those of you who know me know that I am nothing if not an optomist! So, yes there is a silver lining to the cloud - small cops, but also great quality. Winemaker Carl thinks this is the best quality Pinot Noir grapes we have harvested ever, so watch out for the 2010 releases.

Now in an ideal world, one would simply charge more per bottle, but the wine world does not work that way. In fact, due to serious oversupply out of Australia and Marlborough, the pressure on price is downwards. Just holding prices flat is pretty good in the current environment. So we have to absorb these costs with their negative impact on profitability. While our wines are very highly regarded, it is not possible to apply price increases at present. And just when we were starting to make a good profit - ah well, no-one told me wine-making was an easy path to riches.........

That brings me back to our new social media strategy, which is designed to to drive sales through non-traditional channels, where costs are not so high. For example, selling on-line direct from Murdoch James means we don't lose margin to middle-men.We are also looking at working with innovative on-line marketers in international markets, and all our communications tools are now in place to underpin that (Blog, Twitter, Face-book, Website, etc) so hopefully the message is getting out there that Murdoch James Estate is determined to make the most of these new technologies to communicate with our potential customers and give them the confidence to try our wines. The more I enter into this medium, the more it reinforces to me how dramatically and quickly the way wines are being purchased is changing. I have an emerging view that one day, apart from on-premise sales, we will be selling all our wines one way or other over the internet.


Now, I'm off to Vietnam and Hong Kong this week to promote our wines, so some interesting posts to follow.