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Harvesting the years of sunshine

YOUNG, smart, articulate, Michelle Terry proudly describes herself as a ”brand nerd”. Since joining the corporate world in the mid 1990s as a graduate at Anderson Consulting, her working life has revolved around brands of some description, face creams, beer, gifts, homewares, she’s done it all – and now it’s wine.
Her extensive CV in brand strategy – stretching more than 15 years and including a stint at British retailer Marks & Spencer – should serve her well. These days selling wines is as much about selling a lifestyle or a category than the grapes themselves and, while all wines want to be a brand, many are just a label.
”I get very passionate about whatever I am working on, I just like creating things and thinking about how they will impact a consumer’s life, creating growth plans and then watching them deliver.
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”Thinking about new ways to deliver innovation, can happen in financial services as well as wine.”
As the new managing director at Lindeman’s, Terry reports directly to Treasury Wines Estates boss David Dearie, and is responsible for the juggernaut wine brand as well as the other giant in the former wine portfolio owned by Foster’s, sparkling wine Yellowglen.
Under the new organisational structure put in place by Dearie last year, Terry is also responsible for several smaller labels – Great Western, Devil’s Lair, Fifth Leg and Rothbury.But it is Lindeman’s and Yellowglen that will take up most of her attention and time.
Unlike some wine reviewers, and many wine snobs, Terry does not run away or retreat in horror from the ”sunshine in a bottle” tag that has become synonymous with Australian wine, especially chardonnay, and which has made Australian wine so popular with US and British drinkers.
”I think the consumer is looking for that, sunshine in a bottle, and that’s part of the reason for them coming back to great quality Australian wine, which is led by Lindeman’s,” Terry says.
She views it as a handy way of engaging consumers, and once they have the Lindeman’s portfolio before them, sell them other styles and varieties that are a world away from what drinkers may have downed in the 1970s and 1980s.
”My mandate is to make sure we keep on delivering on that, and we keep on growing, expanding into new markets and think about what else can the brand offer. Because it is an incredibly trusted brand and people will move into other parts of the brand if you introduce them, and other propositions.”
And she has big plans for Lindeman’s. On the cards is a launch in the US of its new Early Harvest label over the next 12 months, a new variety of wine that could be a big hit with people who like to watch their weight and their calories.
Early Harvest is a growing collection of reds, whites and sparkling – seven styles in all – that use flavour ripe grapes harvested from early ripening regions in south-eastern Australia to produce a wine that is 25 per cent lighter in alcohol and calories.
Early Harvest has been a huge hit in Australia since it was launched five years ago, and is appealing especially to an older demographic that enjoys drinking wine but also wants to keep an eye on the waistline – and are less enthusiastic about a hangover the next day.
”The core demographic is 40-plus and people looking to have a full lifestyle. They talk about it as a benefit of being lighter, and there are also people who buy it quite frankly because they are calorie counters.”
Terry, who recently took up marathon running and completed her first half-marathon, has big hopes for Early Harvest in the US, where lighter alcoholic beverages are making a huge splash, such as the Skinnygirl range of cocktails which is backed by a reality TV star and are proving amazingly popular.
”It’s a macro trend in general,” says Terry, ”and we have seen it in adjacent categories. For example, like those who lean more to better organic food stuffs; and in the beer market, that’s where the inspiration comes from. Consumers do say, ‘I like to look after myself’.
”And I think there are enough similarities and macro trends between places like the US and the UK that will see that, again, Skinnygirl margarita for example is going nuts in the US, it’s a phenomenon, so there is definitely a category fit play, certainly an industry there.”
And it seems it is not only in America that people, especially female drinkers, are trending towards lighter alcoholic beverages. The fad is also gaining traction in the biggest market of them all – China.
”This is a global trend. It’s interesting. I’ve been digging into this thinking about where we take this, and you can even move into markets like China. There has been market research in China and a survey showed one-third of them are looking for a lighter alcohol product; so I think there is enormous potential in this range.”
But before China there is the US. Lindeman’s has form when it comes to the US. It’s actually an unlikely star in America, unlikely because here Lindeman’s is typically the wine you get at a wedding along with a choice of chicken or beef, and is priced near the bottom of the totem pole at wine stores.
But its performance in North America and the nordic countries has seen it shine of late. For the first half of 2011-12, when Treasury Wine Estates saw declining wine volumes in the Americas, its Lindeman’s labels had double-digit growth, recording volume increases of just under 15 per cent. In March Lindeman’s grew more than 17 per cent and in the past 13 weeks more than 10 per cent.
Its pricing in the Americas ranges from $4.99 for the bottom end of the label to much higher, especially for its popular Bin range and some of its premium wines.
”The centre of gravity is in the heartland of our Bin series and people think it’s fantastic value for money, great everyday wine with good consistency and character. We are very pleased with that position in the market and the fact is it continues to grow.”
Interestingly, Terry, a Queensland girl who now calls Melbourne home, says the Lindeman’s range is ”significantly beating” Yellow Tail, owned by Casella, the incredibly popular family-owned wine group from Griffith in New South Wales which exploded from nowhere more than 10 years ago and is now the biggest-selling imported wine in the US.
It’s not just in the US that Lindeman’s pricing and flavour profile have hit a chord with customers. Lindeman’s chardonnay is the No.1 selling chardonnay in Canada, it’s pinot grigio is No.1 in the Netherlands, while other wines are top selling in Scandinavia.
Although Lindeman’s takes up a lot of her time, Terry is also responsible for Yellowglen, a wine empire within itself, with a 19 per cent share of the sparkling wine market in Australia and one of the country’s most recognised brands.
Yellowglen, like other sparkling wines, has come under intense competition from Champagne over the past two years as the strong Australian dollar and an oversupply of Champagne in North America and Europe has seen the real French bubbly flood into Australia, and at record low prices.
With Champagne prices for well recognised, sometimes premium, brands falling by more than 25 per cent, some drinkers have switched allegiance from Aussie sparkling to the French original.
”Yes, there certainly is competitive pressure coming from Champagne. But the good thing about Yellowglen is that it’s an enormous powerhouse brand here in terms of relative market share,” says Terry.
In fact, Yellowglen’s value as a percentage share of total bottled wine is 3.8 per cent making it the No.2 brand in bottled wine in Australia, behind Jacob’s Creek.
”It’s very important for us to defend our space as Australia’s leading sparkling house.”
She has plenty of time to mull over her strategic plans for the key wine arm of Treasury Wine Estates, and pounding the pavement during her marathon training is a great time for reflection – not to mention the rigour of vigorous competition.
”You always see people zooming past you like gazelles, and you think, ‘how do they do that?’ I was just happy to finish [my first half-marathon] and want to keep that up.”

http://www.businessday.com.au/business/harvesting-the-years-of-sunshine-20120525-1za8y.html?utm_source=twitterfeed&utm_medium=twitter

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