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| May 7th 2009 |
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| Do wine fairs add up? |
by Maggie Rosen
With so many trade fairs and tastings on offer, wine professionals could spend the equivalent of months on the road. But in a recession, can you afford the time and expense of participating or attending? Can you afford not to? Maggie Rosen reports.
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Close your eyes. Listen to the Babel of voices and the familiar clink of bottles and glasses. Catch the faint whiff of wine. You’re at a wine fair, but which one? So saturated is the trade show circuit with fairs and tastings that given time, money and inclination, wine professionals could devote most of their time to attending or exhibiting.
The European roster is dominated by the ‘big four’ – the London International Wine Fair and its newly spun-off spirits show, Distil, ProWein, Vinitaly, and Vinexpo. But there are also hundreds of regionally-focused and niche events, from Vinoble for sweet wine, Millésime Bio for organic and biodynamic, to VieVinum for Austrian wine – the list goes on and on. The US doesn’t have a large international fair, probably due its complex and fragmented distribution systems. Vinexpo tried in 2002 in New York but hasn’t announced any plans to return. The largest trade event – the Unified Wine & Grape Symposium (in California) has a large following, but is devoted to oenology and viticulture more than commerce.
Anyway, American buyers historically have been happy to have an excuse to go to Europe – though the weak dollar may put paid to this for awhile. In the meantime, India, Hong Kong and Russia are increasingly catered to, as exhibition organisers, producers and distributors flock to markets that are perpetually on the brink of expansion.
Differences in cost
As for the international fairs themselves, they’re an expensive proposition for exhibitors of any size. Most organisers charge company registration fees as well as for space; some charge exhibitors for extra badges, catalogues and other variables. Producers already represented in a market may take advantage of their importers or agents’ stands. Then there’s transport, accommodation, samples and client entertainment, and usually the largest expense of all, the stand itself. Many events are held in desirable locations - and even when they’re not, travel-related expenses can be considerable – not to mention the opportunity cost of being out of the office.
Those who seek representation, or who are already be present in a market but wish to complement their agency presence, may find it useful to share space with generic or regional representatives. No matter how it’s sliced and diced, however, when all is factored in, fairs can consume a significant portion of any company’s marketing budget.
Event organisers are loath to focus on cost when making comparisons. To begin with, pure cost evaluations are difficult, because they don’t charge for the same items. They do claim to offer a different experience, promoting such value-added features as themed tastings, a strong media presence and topical seminars. Of the major fairs, London is the only one that’s private: the rest are backed by |
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government-funded enterprises designed to drive business to their areas. It’s also the smallest, but participants routinely say they wish they had more time.
Visitors to the ExCel conference and exhibition centre in the Docklands will find themselves in thrall to local hotels and restaurants, or face the expense of transport and high-priced accommodation in central London. Neither Bordeaux, Verona nor even Düsseldorf are cheap, but their respective organisers have the advantage of public financing and fair-related expenses are lower, according to anecdotal evidence.
“We are hugely aware of the financial commitment of exhibiting in London,” says event director James Murray. “Sometimes I envy shows abroad that work with regional government in a more ‘collective’ manner. But our cost structure is also the most straightforward. We only charge for space – whereas Vinexpo and ProWein charge for entry and other aspects.”
London throws in everything from glasses, spittoons and ice, to catalogues and unlimited badges for stand holders. Murray also points out that this year, for once, the euro and dollar favour overseas visitors. In addition to London’s ‘strictly business’ policy and wholly international character (located in a non-producing country, it couldn’t be anything else), he highlights innovation and customer service and innovation. “We are constantly tweaking the fair based on market trends and feedback,” he says. “We are very much open to new ideas. Exhibitors know this, too, because the UK is such a coveted market and a magnet for the international press. London is often the place where new products are launched.”
The organisers are also eager to stay in participants’ minds year-round. This was the rationale for the introduction, last year, of The List – an on-line catalogue into which exhibitors can upload in fine detail the features of their products. The catalogue can be searched using various criteria, and incorporates in interactive floorplan, the better for visitors to identify exactly which wines they want to taste, and map out a logical route. Murray anticipates this year’s version, which is free, will evolve into ‘the largest and most in-depth selection of wines ever collated’ and act as a permanent reference.
Danila Avdiu, ProWein project manager, also prefers to discuss strategic differences rather than cost. “ProWein and London are often considered similar – both are very efficient, trade-only and customer-service oriented,” she says. “But London focuses much more on brands and distribution to the UK market, while ProWein has a much larger proportion of smaller players and a wider international audience.” Avdiu believes Vinexpo is not really comparable. “Vinexpo is every other year, and its main purpose is as a showcase for the French châteaux,” |
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she says. “I’d even say it’s a kind of ‘who’s who’, a place to do a little business and socialise more. ProWein is the first international major show of each year, where new wines are presented, and decisions-makers can address near-term range and inventory requirements.”
Despite the timing of Vinitaly – the week after ProWein and about a month before London – organisers feel its proposition is sufficiently different from their own that neither visitors nor exhibitors overlap significantly. For its part, Vinexpo continues to hold enough sway over the calendar in odd years that the phrase ‘a Vinexpo year’ has made it into the popular lexicon. Its organisers remain confident that it can deliver on its international promise in spite of the absence of new world producers. “It’s the most important fair of the year,” says Robert Beynat, Vinexpo CEO and one of its founders. “It’s the only place where a visitor can meet the top decision-makers, the head of a company along with marketing and sales people.”
Detractors point to a notable dearth of New World participants, implicating well-publicised issues of second-class treatment in the past. But Beynat attributes the absence of a New Zealand presence to the country’s small production, and Australia, to the drought at home. Nevertheless, says Beynat, there are plenty of takers as the fair “has been sold out since Christmas”. This year’s edition will feature a sommelier summit, as well as a tram service to help visitors speed through Bordeaux traffic.
Should you participate?
Wine fairs and not a magic bullet, says Jaime Araujo, founder of Paris-based Terravina, a marketing and communications consultancy, “and they’re not for everyone. They should be approached as one of the tools in a bigger box.” Araujo cautions that while the big international fairs can be hugely profitable for big brands, for smaller premium producers, they can actually be counter-productive. “For a smaller brand that doesn’t have the budget to incorporate their presence at a fair into a larger, cohesive marketing strategy, there’s no point,” she says. “The stand is very important – it’s your public face – but combined with all the other expenses of a fair, it’s an enormous financial outlay. If you can’t afford to do it right, it’s worse than not doing it at all.”
Araujo advises clients who have the means to exhibit as part of a well-developed campaign to then define specific goals for the fair, and focus on preparation and follow-up. “It’s not enough just to show up and look pretty,” she says. “If you haven’t made contacts and appointments with potential buyers, the world will walk by. In fact the before and after are almost more important than the event itself. Trade people meet |
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hundreds of producers and suppliers, and a week later, they won’t necessarily remember you.”
Warren Adamson, New Zealand Winegrowers’ director for the UK and Europe, echoes Araujo’s sentiments. “We encourage wineries to generate their own contacts and leads, and remind them that the fairs are not necessarily the place where they will sign contracts,” he says. “It’s more a place to support existing relationships or forge new ones. And of course it gives visitors a chance to taste the latest vintage.”
The generic representative body takes care of the up-front payments and logistics associated with renting space and organising a stand, then subdivides it based on the wineries that wish to participate – each of which should expect to pay about £3,100 (€3,540) for space alone. Such a protocol is replicated by the many other generic bodies that take part.
In 2009, New Zealand will participate in both London and Germany with their own stands, and will be represented at Vinitaly. Of course many producers already in these markets will be present on agency or importer stands. “We always do the London fair, and we’ve had an amazing interest in ProWein – I would like to have bought twice as much space,” says Adamson, who advises that there will be 28 participants on the London stand, and 14 in Germany. NZW places a great deal of emphasis on quantifying the results, both during and after. “We canvass everyone on the stand, and ask, ‘what did you think of the organisation? Do you think you achieved new business?’” says Adamson. “Then we send a questionnaire that asks whether they thought anything was missing, and asking for qualitative feedback.”The most reliable measure is whether wineries return. “People vote with their feet in our business,” he says. “But it’s also cyclical, they sit out one year and return the next. I’d say about 50% of the wineries this year are repeats.”
Adamson emphasises that New Zealand Winegrowers’ agenda extends beyond the international fairs. “In some countries, we can gain more through smaller tastings and events,” he says. “Wine Professional in Amsterdam is a nice on-trade event that attracts the right kind of buyers – we’re considering taking space there.”
Buyers rule
The big draw for exhibitors are the buyers. From the huge pan-regional supermarkets to the chains to the independents, every retailer will be at one or more of the fairs to taste, observe, to touch base. They don’t expect to do business on the spot. Nor do they anticipate making any discoveries at London, Vinexpo or ProWein - though Vinitaly is an exception. “I would be disappointed to see something for the first time at Vinexpo, ProWein or London,” says Pierpaolo Petrassi, senior product development manager for |
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Tesco. “We should have a good enough relationship with the agents and producers that if something comes to market, they’d send it to us straight away – virtually before it hit the market.”
Petrassi finds the fairs indispensable as a reality check, to taste and compare a huge number of similar styles, price points and grape varieties in one go. “Part of our job is to see how styles and brands are evolving, to track what our producers are doing, and look at blends. It’s much easier to see the big picture by tasting hundreds of wines at Vinexpo, London or ProWein over the course of a few concentrated days than by calling in samples.”
Danny Gibson, buyer for Aldi, agrees. “I see the fairs as an opportunity to taste as much as possible,” he says. “I can meet all my suppliers in a couple of days and fill in any gaps in my range. But I would never place an order for anything outright, I’d call in samples afterwards.”
Jonathan Butt, buyer for Wine Rack, is less doctrinaire. “I do try to look for the smaller producers, especially on the generic stands,” he says. “You can get into a situation where you find yourself steered toward all the same wines as your competition. So I’ll have meetings with my current suppliers but I try to leave time to go around on my own.”
Places filling up fast
As companies slash their overheads and let staff go, 2009 is a scary place to be. Wine fairs might seem to be a luxury rather than a necessity for both exhibitors and visitors. Yet organisers say all – or nearly all - the space is spoken for. “We have the same number of exhibitors as last year,” says ProWein’s Avdiu. “We were very concerned about the recession and talked to our customers about this. But they told us that participating in fairs like ProWein is the best way to keep their business up. Of course the credit crunch is affecting capital investment plans, but they haven’t yet felt it on the commercial side.”
Not surprisingly, organisers also caution against cutting promotional expenditures, and advocate getting in front of existing customers and prospects. “If I were a producer or distributor who was uncertain about the future, I’d take every opportunity available to me to push my products,” says Vinexpo’s Beynat. “I’d want to show my clients that I am here, and I’m strong. And I’d want to see what my competition is doing at home and abroad.”
Yet with so much uncertainty in the financial markets, buyers may decide that much of what might be accomplished at one of the international wine fairs could very well be taken care of with a few efficient, economical visits at a smaller, cheaper and more targeted event, or even remotely, by phone, fax, email and post. For while there’s no substitute for face-to-face interaction, |
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it comes at a price. Depending on what the next few months bring, it may be a price that by 2010, fewer are willing or able to pay.
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Taking a stand
For exhibitors, the most time-consuming, anxiety-provoking and costly aspect of preparing for a fair is the stand, which will do triple duty as shop window, office and storage depot. Not only must it make an impression, but it must also look as tidy and inviting as possible, even as hundreds of people tramp around and through it over the course of several days.
Most fairs will provide a minimum basic ‘shell’ with carpeting, shelving, and wall space for graphics, which exhibitors can personalise (according to specific regulations). Some are more comprehensive. ProWein, for one, offers a turnkey scheme, which includes amenities like a table and chairs, wastebasket and coat stand. It’s also possible to rent a stand, but any company with strong marketing ambitions should consider a bespoke stand which, if well-designed and robustly built, may last for several years.
Tim Hansell, of Hansell Design in Sevenoaks, just outside London, advises prospective exhibitors to develop a vision of what they hope to achieve by participating in a fair before committing to anything, as well as a clear understanding of what the fair organisers provide as part of the package. “Of course you should go to the show and get a sense of what it’s like. Walk around, take notes about which stands are getting the most foot traffic. Figure out what you like and don’t like about what other companies are doing,” he says. “Get a floorplan and study it. Decide if you want to be in the middle of a row, or on a corner. This will determine how many sides will be open, and will guide your decisions about how to handle things like traffic flow, meeting space and storage.”
Basic stands from Hansell start at around £10,000 (€11,500), which comprises consultation, design and construction. Once the key components are determined, clients will get a three-dimensional model. Colour, graphics and lighting will be applied next and once approved, the physical stand is built. Most stand design companies will also transport and construct stands on-site, and store them between shows. The ideal lead time is four months. “All that said, if someone comes to me with a budget of £5,000,” says Hansell, “there is still a lot we can do to attract attention with graphics and photography.”
Mistakes include booking space without measuring out the physical area, as a test, in an office, but the biggest error, Hansell says, is lighting. Light colours, for example, foster an illusion of spaciousness, while long, panoramic graphics can elongate a wall. Darker colours can create a more intimate area, but can also make it look small. “If you don’t light it properly, it can kill business.”
A more complete version of this article first appeared in Meininger’s Wine Business International, Issue 1 2009.
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