| Abstract | Purpose – Independent French wine producers are faced with excessive costs and a declining image of quality compared with their New World competitors. A confusing offer and weak brand identities also make their often poorly marketed products less attractive at the point of sale. As production continues to surge, plummeting prices have left many of these producers economically unviable. Is it possible for these small independent producers to survive in an ever more competitive global market? This paper attempts to answer this question, by studying the challenges confronting this group, as well as their advantages, both in their home and on a global market.
Design/methodology/approach – Literature in French and English was reviewed in highlighting key issues impinging the industry. A small survey was conducted to ascertain the drinking habits of young adults market in France. Also SWOT, PESTLE, and Porter’s Five Forces were used in presenting a more strructured approach in discussing the nature of and challenges facing this industry.
Findings – It is evident that a lot of work needs to be done for French wines to regain their global competitiveness, and even more so for small producers who do not benefit from the massive promotional budgets of their larger competitors. However, by ensuring a superior level of quality, higher production costs can be justified, while still being carefully managed to ensure that all additional costs incurred add value to the end product. This quality needs to be guaranteed by a stronger and clearer AOC system that is regularly evaluated to maintain its credibility, and reinforced by a strong individual brand image, in order to gain consumer confidence. A cultural change is also necessary, away from defence and towards a more proactive approach. The innovation for which French winemakers were once famous must be reclaimed.
Research limitations/implications – It would be interesting to further study the cultural metamorphosis that has taken place amongst French winemakers over the course of the last century. The comparative bargaining power of small producers against large supermarket chains is also a topic that could be further explored. Given that it will not be possible for all producers to become a key reference and guarantee shelf space amongst their highly marketed competitors, greater research into more innovative ways of getting products to market would be extremely useful.
Practical implications – Foreign markets should be highly studied and understood before entry. Integrating products into local culture is often more successful than imposing the product as part of the culture of the producing country. Most importantly, however, producers should be prepared to adapt to a changing market and to invest in order to secure future capital inflows. The rise of new global players, such as China, will only intensify competition, and today’s less sophisticated consumers are more likely to be swayed by low prices and strong brands than by an overpriced and poorly positioned product from “Old Europe”.
Originality/value – A fairly thorough account of the current state of affairs of the wine industry in France has been presented and both the French literature and relevant web sites in French have been reviewed in highlighting and evaluating issues impinging the wine industry. |
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