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| December 14th 2007 |
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| Wines that take off |
by Monica Murphy
Being listed with an airline puts wine bfore a captive audience, generating revenue and recognition. But the road tot he airport is littered with as many pitfalls as opportunities.
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There was a time when airlines made a virtue of offering, for free, the finest Grand Cru Classé or Reserve wines to First and Business Class passengers, whose choices were only limited by the quantities that could be supplied by any individual producer. Even Economy and short-haul Business passengers could expect to enjoy piccolos of Champagne or 187ml bottles of still wines, which were dispensed copiously and free of charge. Wine producers who could supply demand stood to benefit enormously.
But in the wake of the traumatic events of 2001, plus the growth of budget flight, airlines took stock of costs and slashed unnecessary expenditure. Business and First Class passengers are still served wine from the drinks trolley free of charge, usually from conventional 75cl bottles. Many airlines make a virtue out of their generosity and use it in their marketing strategy, with elaborate websites touting their menus and wine lists. This situation is unlikely to change because the wines offered are still a tiny proportion of the Business or First Class fare price. The food and wine offering, along with space and comfort, is one of the few points of difference an airline has in attracting business, which is why the use of well-known wine consultants and designer chefs has become the norm. This means that for wine producers, an airline contract is still a much sought after and prestigious route to market.
But other expensive frills have gone from most airlines and wine is now offered as an optional purchase on most short haul flights, while even long haul flights have a pay-bar in coach. When this was introduced, usage initially plummeted but Sean Murphy, catering manager at Aer Lingus, says that sales have almost reached the same quantities as the giveaways of the past. He puts this down to the fact that by offering quality wine that is recognisably good, the passenger will not only buy, but will often repeat the purchase, especially on long flights. When wine was given away, the temptation was there for airlines to find the best bargain for the bulk of their passengers, often with little attention paid to quality. But now that passengers have become used to pay-as-you-go, an attractive menu, coupled with fair pricing, encourages the purchase of wine, which can give suppliers a useful income stream.
What to serve in the air
Airline wine procurement is a complex business, not least because the sense of taste is substantially impaired under pressure at 36,000 feet. Tannins and acidity, for example, tend to be exaggerated at the expense of fruit. The received wisdom is that, due to the physiological changes that take place in a pressurised environment, fruiter, less tannic wines do better than the somewhat more austere and classic wines, or older vintages. This may be the case, but it does not explain why the classic wines of cooler climes in France, Italy, Spain or Portugal and more recently, countries such as Germany or Austria, are often the first wines on the list to |
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be depleted. While there may be an element of 'label drinking', it may also be that less exuberant wines work better with food and are more likely to lead to a second glass. And perhaps more moderate levels of alcohol are more pleasing in this very artificial environment.
But regardless of the reality, the search for fine wines has become more exciting. The days are long gone when a Champagne, a couple of Cru Classé Clarets (one from each bank of the Gironde) and a red and white Premier Cru Burgundy were the normal offering in Europe, with a Napa Cabernet or Australian Shiraz thrown in on certain routes. These days, wines come from all over the world, from major brand producers, through medium sized commercial wineries to small production estate wines. Even the largest airlines, whose requirement runs to many thousands of cases of any one wine, now break down their lists into smaller parcels in order to procure ever more esoteric and trendy labels. Procurement is also becoming more adventurous as the Cru Classé wines of yore are driven further out of reach of even the most generous financial controller.
There is a definite move towards route-specific choices with, where applicable, countries of flight origin or destination usually represented in the choice. British Airways, for example, splits the world into four wine regions: North America, South America/Caribbean, Africa and Asia/Australia. Each flight will feature route-appropriate wines, alongside classic European wines.
Other opportunities for producers include the supply of on-board food and wine to private executive aircraft, often to a very high standard, using Cru Classé wines and vintage Champagnes.
The gatekeepers
Although some airlines still maintain a full wine buying department, many others, particularly smaller airlines, outsource procurement, although the final choice is made by their own personnel. For an airline to buy directly from a producer can tie up enormous stock, capital and warehousing space, which can be a logistics problem for what is often a 'just in time' operation. That said, airlines like British Airways sometimes have long-standing relationships with producers such as Vignobles Despagne in Bordeaux who have successfully specialised in both small format and regular 75cl bottles for many years.
Other airlines such as Emirates, GB Airways, Delta, Continental and Cathay Pacific, to name a few, go directly to a specialist small format bottler such as Paul Sapin in Burgundy for their needs, be they for classic European wines or New World brands. This company has specialised bottling lines and quality control systems, and is adapting to current market conditions by investing in new packaging. In some cases the airline sources the wine for bottling, but mostly it is sourced by Paul Sapin.
The major airlines may have their own tasting panel. Singapore Airlines retains Stephen Spurrier (UK), Karen |
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McNeil (Canada) and Michael Hill-Smith MW, (Australia). Two North American palates are Ken Chase from Canada who consults for Delta and Air Canada and Diane Tietelbaum from the USA, who looks after American Airlines. Doug Frost MW is the consultant for United Airlines as is Markus del Monego MW for Lufthansa. Other airlines, especially short-haul operators, rely on local wholesalers or caterers such as Gate Gourmet, SAS, Pourshins or Alpha to provide wine as part of the overall catering contract.
The US company M.J Devine, headed by Mark O'Sullivan, specialises in supplying airlines and cruise lines, servicing 53 airlines worldwide.
How airlines buy
While wines are often submitted by tender and go through an elaborate selection process, producers can also be invited to submit, as smaller parcels are sought for specific uses. In big tendering processes, at least three bottles of any one wine are sent to the airline, complete with pricing, and are then tasted blind by an expert panel. In the past, many airline contracts could be for a year or more, with massive quantities required, but the current emphasis on celebrity chefs and changing menus designed to appeal to frequent flyers means that shorter contracts using smaller quantities are becoming popular, offering opportunities for smaller producers.
Some larger airlines carry an ongoing cellar to service multiple wine lists, while others will move at regular intervals from one contract to another, to run a smaller number of lists. British Airways, for example, changes its menu and wine offering every month, when perhaps four or five wines will rotate in or out of the list. They will use as little as 250 to 1000 cases for a First Class offering, 800 to 5000 cases for Clubworld (Business Class) and 10,000 to 100,000 cases for Club Traveller, usually all quarter bottles. They also need wines to supply their lounges.
Some airlines prefer to stick to well-known big wine brands such as Torres, Wolf Blass or Laroche with which the customer can identify, although it is easier for the passenger to make price comparisons that way. Others prefer exclusivity. The key to success is at least a modicum of cabin crew training or, if this is not possible, well-produced crew manuals, or descriptive menus for passengers.
While Champagne still holds pride of place among sparkling wines and is expected in First Class, other quality sparkling wines are beginning to appear, such as California sparkling wines, Prosecco, Spumante and others. For Champagne producers, supplying wine can be a difficult proposition as airline buyers put pressure on the price.
Sourcing Champagne in piccolos (or snipes) can be problematic, as major brands like Taittinger and Roederer refuse to bottle in them, because of the difficulties of transferring wine from full-sized bottles into small format. With Champagne already in short supply, only the marketing value of being seen on a major airline continues to |
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ensure supply.
Most flights carry a choice of two red and two white wines in Business and First Class and one of each in Economy. This will be in addition to Champagne and Port, Sherry or dessert wines. A selection of spirits will always be carried, in minis and bottles and even sachets.
How to get on board
Succeeding in an airline tender can be exciting, especially for smaller producers, for whom it can be a coveted marketing opportunity. But a single purchase does not guarantee ongoing success, due to the need for ever-changing menus. Unless a smaller producer can furnish the requirement without distorting their normal day-to-day supply to regular customers, they should not attempt to offer, enticing as it might be to boast that their wine is served on an airline. Producers also need to be aware that they may be subject to quality assurance inspection and they may have to discount heavily, or even offer marketing support (cash payment or extra discount) to win a contract. There will be some tangible return for this, which is usually a mention in the menu or flight magazine. Discounts of up to 15% on the normal export price for airlines are quite common, and occasionally even much larger rebates are offered.
Producers should also make sure that they can handle the logistics of preparing a very large order in what can be a short time-frame. When submitting a tender, it is even more difficult, because the terms of the tender may stipulate that the wine be held until a decision is made. It may be imperative to hold back large stocks until the tender process is completed and the results are known, a period of often several months, which in the end can be unsuccessful. The labelling requirements for each country differ and it is essential to factor in a lead-time for procuring the correct dry goods.
In order to make the most of an undoubted marketing opportunity, a back label with as much information about the wine and winery as possible is worth its weight in gold. After all, the product has a captive audience. Other marketing advantages offered should be exploited to the full. For instance, Qantas' Cellar in the Sky offers wines from practically every major wine producer in Australia. Only about a dozen will be used on any one flight, but all wineries get great exposure in the list, with tasting notes and accolades and an indication of the class in which they will be served.
The first step to getting wine on an airline is finding out who supplies to the airline and to approach them initially. Cold calling is not encouraged. Companies who supply airlines will normally have their sourcing teams visiting various trade fairs looking for suitable wines and will ask producers to register an interest. Sending unsolicited samples is of no use whatsoever and may be counter- productive. For larger producers, taking or being reprsented at a stand at the annual ITCA Fair (International Transport Catering Association) is one way of attracting the |
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attention of a large number of airlines simultaneously. It is held in a different city each year, but will be in Nice in February 2008.
Getting through the gatekeepers
In the airline business, the people responsible for making wine decisions can be the airline's own buying team, an importer, a bottler, a wholesaler, an airline catering company or a consultant. Before taking on a wine, the gatekeeper will consider source, quality, price and available quantity and will check these against other wines in the listing, to balance budget and style. The wines will be assessed for suitability in the air, and vintages will be checked to ensure they can last through the contract. The producer will also be assessed for their ability to present the goods on time and in the right format, because logistic efficiency is crucial. Airlines are large organisations, so it is imperative for suppliers to familiarise themselves with the appropriate contacts within the management structure of the airline and to be well aware of the function of each different sector if the delivery is to run smoothly. Other considerations are that airlines have customs and excise needs compared to everyday business and that supplying goods to outstations around the world can carry hidden costs.
"Logistics is our biggest headache – nothing specific but there are just so many things to go wrong," says Peter Nixson, British Airways' wine and beverage development manager. "Suppliers not having the wine ready on time, boats being late or getting re-routed, Customs documentation wrong – all sorts of things!" My own company, Febvre wines in Dublin, who are suppliers and logistics partners for Aer Lingus, would heartily concur with this point. The quantities required can also vary according to the time of year.
According to Aer Lingus' Murphy, the outward transatlantic flights use more wine than the return, due to timings. Also, times of year count. A plane-load of Christmas shoppers heading to New York will hit the drinks trolley quite hard, compared to a business traveller going to a critical meeting.
Packaging
For the lucky passengers in the pointy end of the plane, market forces will probably ensure they are always offered reasonable a wine offering from a conventional glass bottle. But the situation is different for everyone else. There is now a serious shortage of glass bottles in Europe and also in some other countries. Whereas only a couple of years ago, there were 66 glass bottle manufacturing companies in Europe, there are now three. PET bottles were pioneered for use on airlines for weight purposes, but always suffered from an image problem and in some cases flattened the flavour of the wine. More importantly, they had a very short shelf-life of under six months, exacerbated by the cabin environment, which itself prematurely ages wine. But concerns about weight, not to mention the potential security hazards of broken glass, mean PET is being improved all the time. Many airlines, including Air Canada and Ryanair, are already experimenting with PET in Economy.
Tetra-Pak is another option but there is something aesthetically off-putting about this sort of packaging – rather like placing the milk carton on the table instead of pouring from a jug. At present, Tetra-Pak has little acceptance among passengers.
Despite the post-9/11 tribulations of the airline industry and concerns about carbon footprints, aviation looks set to expand. As ever more people board ever more budget airlines, there will be an increase in opportunities for wine producers. These may not be the same as they were in the past, where major producers could expect long-term, high quantity contracts, but this can only be good news for smaller producers, for whom the sky is now an opportunity, rather than a limit.
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