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December 15, 2013 11:12 pm

Marketing and management lessons from the vineyard

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The global consumption of wine is growing by 5 per cent a year

It used to be the prerogative of the wealthy and elite, but wine drinking now attracts a wide range of consumers. But the growth in the business has not been mirrored by an increase in business programmes to help winemakers capitalise on fresh markets.

People believe that if they make a great wine, it will sell, explains Ray Johnson, director of the Sonoma State University’s Wine Business Institute in California. “The industry has had a production bias for a century. Making good wine is not enough any more.”

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Larry Lockshin, professor of wine marketing at the University of South Australia, points out that universities are slow at meeting demand. “Winemaking is the glamorous course.”

But there is a further problem in that the wine industry is dominated by a large number of small, often family-run companies that may not have the capacity or inclination to send people to business school. In the champagne industry there are about 6,000 brands, for example, but most people know fewer than 10 of them, says David Menival, professor of economics at Neoma and a specialist in the champagne business.

Where is the growth coming from?

The global consumption of wine is growing by 5 per cent a year – it is now France’s second-largest export, for example. Production is growing to match, says Jacques-Olivier Pesme, director of international development at Kedge Business School in France.

“Thirty years ago you had 40 countries around the world making [substantial amounts of] wine. Now you have more than 80.” The biggest growth areas are in developing economies – China is now one of the biggest grape-growing countries in the world.

“When the middle classes emerge they want to consume as we consume in France, the UK and the US,” says Stéphan Bourcieu, dean of Burgundy School of Business in France.

China and Russia are also keen to see wine replace traditional spirits, according to Prof Pesme. “There is a willingness [in government] to have people switch from heavy alcohol beverages to more healthy beverages, which are more socially acceptable for both men and women.”

This means the demand for graduates of wine management programmes is now worldwide, says Prof Bourcieu. “We recruit the future importers and dealers from the different countries. They will probably have more opportunities to start their careers in Hong Kong rather than Nuits-Saint-Georges.”

What programmes are available?

In the US, Sonoma State University runs a wine MBA and an EMBA – the executive programme is taught in the Nappa Valley – as well as an undergraduate degree. The Wine Business Institute there also specialises in short, certificate and online programmes.

Burgundy, which last month launched an autonomous School of Wine and Spirits Business, leads the field in Europe with four masters degrees. Students of the Grande Ecole masters degree at Burgundy also have the chance to earn a double degree with an additional MSc in wine management. The school graduates more than 100 masters students a year, says Prof Bourcieu, and “the goal is to move from 100 to 200 graduates within five years”.

Elsewhere in France, wine management programmes are on the wane. Bordeaux Ecole de Management, now part of Kedge, has run an executive wine MBA for more than a decade. Since the merger between Bordeaux and its new partner in Marseille, the programme has become part of Kedge’s Global MBA, with a wine specialisation. Neoma has no degrees in the subject but elective courses in wine management and wine marketing for masters students.

In Australia it is a similar tale. Following a boom in wine management programmes in the mid-1990s, the number of wine programmes has recently decreased. The University of Adelaide does run a Master of Wine Business degree, however.

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