The expected financial implications of establishment of a wine brand for a Swartland wine producer

Hauptfleisch, Jak Theron (2016-12)

Thesis (MSc)--Stellenbosch University, 2016.

Thesis

ENGLISH SUMMARY : The South African wine industry, especially the wine grape producers, are under financial pressure. The small to medium wine grape producers in the Swartland feels the most financial pressure due to the low yielding and lower pay out received per tonne than in other regions. The quality of Swartland wine grapes was found to be just as good and even better than the regions well known for quality. Therefore, the main research problem was to identify the cost implications of establishing a private wine brand for the small to medium wine grape producer in the Swartland. It is believed that wine branding can be the solution for the current financial pressure wine grape producers find themselves in. The main research method used was the mixed-method. More specifically, this study follows the exploratory design which falls under the main mixed-method. The reason for choosing the exploratory research design is, because the study is dealing with a multiphase problem due to the inter-relatedness of the different phases of wine branding. Data was gathered by means of semi-structured interviews to retrieve qualitative- and quantitative data. The qualitative data was used to understand the characteristics of a typical Swartland wine farmer, while the quantitative data was used to develop a costs implications model. In the cost implications model, the wine branding process was divided into three phases. The three phases are; farm level, production / cellar and marketing / distribution. The quantitative data from the interviews was used in the model to measure the costs of wine branding in each of the three phases over a five-year period. The model then calculates the total cost of establishing a wine brand, the break-even price at which a bottle of wine needs to be sold and the brand value over a five-year period using the historic cost method. Wine branding can be the solution to the current financial pressure under which wine producers find themselves. Due to the high cost of branding and the risk involved, especially Swartland producers needs to start focussing on wine production and not see it as a second enterprise to wheat farming. Focus should be placed on vineyard management, good wine making practises and efficient marketing. Starting small and selling at higher prices while learning the tricks of the trade can lead to successful wine branding. From the interviews it was also found that the risk and uncertainty of wine branding is not accepted with confidence by the typical cooperative producer.

AFRIKAANSE OPSOMMING : Die Suid-Afrikaanse wynbedryf, veral die wyn druif produsente, is onder finansiële druk. Onder die ervaar die Swartland wyn druif produsente die meeste finansiële druk. Die rede hiervoor is die laer opbrengste en uitbetaling per ton gekenmerk aan die streek. Daar was bevind dat die kwaliteit van wyn druiwe in die Swartland net so goed en selfs beter is as die streke wat bekend is vir hoë kwaliteit druiwe. Daarom is die hoof navorsing probleem om die koste implikasies om ‘n privaat wyn handelsnaam te vestig vir ‘n klein tot medium wyn produsent in die Swartland te bepaal. Daar word geglo dat wyn handelsname die oplossing vir die huidige finansiële druk waaronder produsente hulle bevind kan wees. Die hoof navorsing metode wat gebruik was is die gemengde metode. Meer spesifiek, volg hierdie studie die ondersoekende metode wat onder die hoof gemengde metodes val. Die ondersoekende metode was gekies, omdat die studie met ‘n meer-fase probleem handel weens die inter-afhanklikheid van die verskillende fases om ‘n wyn handelsnaam te vestig. Data was ingesamel met behulp van deels gestruktureerde onderhoude om kwalitatiewe- en kwantitatiewe data te bekom. Die kwalitatiewe data was gebruik om die eienskappe van ‘n tipiese Swartland wyn produsent te verstaan. Die kwantitatiewe data was gebruik om ‘n koste implikasie model te ontwerp. In die koste implikasies model is die vestiging van ‘n wyn handelsnaam in drie fases verdeel. Die drie fases is as volg; plaasvlak, kelder / produksie en bemarking / verspreiding. Die kwantitatiewe data van die onderhoude was gebruik om die kostes om ‘n wyn handelsnaam te vestig in elk van die drie fases oor ‘n vyf jaar periode te meet in die model. Die model bereken dan die totale kostes om ‘n wyn handelsnaam te vestig, die gelykbreek prys waarteen ‘n bottle wyn verkoop moet word, asook die handelsnaam waarde oor ‘n vyf jaar periode deur gebruik te maak van die historiesekoste metode. Wyn handelsname kan die oplossing wees vir die huidige finansiële druk wat produsente ervaar. Weens die hoë kostes verbonde aan handelsnaam vestiging en die risiko betrokke, moet veral Swartland produsente begin fokus op wyn produksie as ‘n volwaardige vertakking en nie dit sien as ‘n tweede vertakking vir hulle graan produksie nie. Daar moet op wingerdbestuur, goeie wynmaak praktyke en effektiewe bemarking gefokus word. Deur klein te begin en teen hoë pryse te verkoop om stelselmatig die bedryf te leer ken blyk ‘n goeie strategie te wees vir suksesvolle handelsnaam vestiging. Alhoewel, dit wil voorkom of die risiko en onsekerheid van handelsnaam vestiging nie gemaklik aanvaar word deur die tipiese kooperatiewe produsent nie.

Please refer to this item in SUNScholar by using the following persistent URL: http://hdl.handle.net/10019.1/100036
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