Each week, we seek out expert advice to help a small or medium-sized company overcome a key issue .
Georgian Hills Vineyards in The Blue Mountains, Ont., produces a dessert wine that meets all of the standards of being an ice wine but one: Its grapes are located in a region deemed too small to be a designated viticulture area (DVA).
As a result, the winery can’t officially label its product an ice wine. That has impeded Georgian Hills’ ability to get the distribution to take its product to a much further and wider audience, says Robert Ketchin, one of three co-founders of Georgian Hills and its president of sales and marketing.
The winery calls its product “Frozen on the Vine.” But that name hasn’t convinced the Liquor Control Board of Ontario to stock it on its shelves. Right now, Frozen on the Vine is sold only at Blue Mountain Resort properties, a few neighbouring restaurants, and the winery.
“The LCBO made it quite clear they only want VQA [Vintners Quality Alliance] products from us,” laments Mr. Ketchin, whose winery has four full-and part-time employees, rising to at least 10 during the height of the growing season.
“We would have a much better chance to be in the LCBO with this product if we were ice wine, but because people don’t know the story, we can’t stand in the store and explain that it’s not called ice wine, but is made to the same specifications.”
To be called an Ontario ice wine, a product must fit a stringent set of criteria set out by provincial law and a regulatory body, the VQA, that oversees the wine-making industry. Under the VQA Act, wine standards are maintained “on the basis of the areas where the grapes are grown and the methods used in making the wine.”
The key factors in determining what constitutes an ice wine include: a harvesting of the grapes that occurs between -8 and -12 degrees Celsius; a minimum sugar content, or Brix level, from the grapes; and wine originating from a region with 200 acres of vineyards or 500 tonnes of production.
Georgian Hills, which began producing wine in 2006, makes its dessert wine from frozen Vidal blanc grapes, the same ones that line several vineyards in the Niagara region, the most popular area where ice wine is made (Canada is the world’s largest producer, with Ontario accounting for about 75 per cent of the nation’s output).
Its wine uses the appropriate grapes, is harvested at acceptable temperatures and contains the right sugar content. But the winery sits on 17 acres in the Georgian Bay region, which contains only about 50 acres of vineyards and 100 tonnes of annual production.
“We have to earn our place on the map when it comes to the VQA. The 200 acres, or 500 tonnes, is a benchmark to demonstrate we can make quality wine and that we are truly a wine region and that it is not a crazy idea we can grow grapes up here,” Mr. Ketchin explains.
Last year, Georgian Hills sold 13,000 bottles, or 1,100 cases, of wine in total, with Frozen on the Vine accounting for 10 per cent of sales, Mr. Ketchin says.
A 200-millilitre bottle of Frozen on the Vine retails for $20; most ice wines come in 375-ml bottles and cost in the $40 range. “In Ontario, 95 per cent of wines are sold under $20. With that being the case, for the moment, until we are ice wine, we will stay in a smaller bottle, because it’s at a more attractive price,” Mr. Ketchin says.
If Georgian Hills could stamp “ice wine” on its label, Mr. Ketchin says the winery could put Frozen on the Vine in bigger bottles, charge more, sell more, and he believes this wine could become its biggest seller.
“I look forward to the day when we become a DVA wine region and then we would certainly ramp up production and make a concerted effort to selling ice wine wherever we could,” Mr. Ketchin says.
In the meantime, “we’re trying to convince people that we can grow grapes up here and make high-quality wines,” Mr. Ketchin says. “People like our product once they taste it. It’s getting more people to taste it that’s key for us as we grow.”
The Challenge: How can the winery broaden the market for its dessert wine without being able to call it ice wine?
THE EXPERTS WEIGH IN
Barry O’Neill, managing partner, Zed Financial Partners, Toronto
The fact that they’re not called an ice wine is not that big of a deal to me. They need to get their product in front of potential customers and distributors. To do this, they should approach the LCBO stores in southern Ontario – especially in Toronto, where there is a large market – to offer free samples of their Frozen on the Vine. If they’re able to impress customers with the quality of their product and sell several bottles during that in-store promotion, then the LCBO will likely be more open to putting them on the shelves within the ice wine section. Then, if you’re a consumer, you’re not so concerned about the name, because it’s in that section and they’re all in the tall, slender bottles anyway, so you know what you’re buying is in essence an ice wine.
Also, if they’re going to have small production, then they need to promote to all of the restaurants in Georgian Bay. If I sell it to a restaurant, then that restaurant’s manager or chef has done the homework and knows it’s an ice wine, and they’ll sell it to their own diners as an ice wine. They just need to introduce the product to those who would advocate for it. With the buy-local movement, restaurants in the Georgian Bay area would be open to selling this product, and it’s not that hard for the winery to get it into their hands with a few phone calls and invites to a wine tasting at the vineyard.
Michael Roque, managing partner, Sell To Please Inc., Mississauga, Ont.
If you can find your unique selling proposition (USP), then you’ll be on your way to differentiating your product and bringing in the sales. The “Frozen on the Vine” name has the potential to have value as a brand name of its own. By embracing its distinctiveness, Georgian Hills would have more opportunities come its way. The fact that it’s not named an ice wine can actually be an advantage in a crowded marketplace for that product. That’s even more so once people find out that they’re getting a high-quality ice wine at a lower price simply because of a technicality that prevents the vineyard from calling it an ice wine.
Why should a customer buy your product over a competitor’s? In this case, the answer is clear: better value. The way to go is a sales and marketing strategy built around the money consumers will save and the enjoyment they will have when they purchase “Frozen on the Vine.” That name can be the USP that becomes the vineyard’s brand, and ultimately, what people know it for.
The key to marketing “Frozen on the Vine” is to tell the story in an engaging way, through explaining to customers and distributors about the care that goes into the product and how they’re actually getting a high-quality product for a lower price.
Doug Smith, co-owner, Natural Pastures Cheese Co., Courtenay, B.C.
We went through a lot of work to comply with organic cheese standards. There were some standards within the organic standards that we felt were too low. We chose specific aspects that we felt were important to ourselves and we thought were also important to the consumers, and those were the things we emphasized in our product and in our marketing.
It does require a lot of legwork, because if you have a certain standard in place that people recognize and then you have something on the shelf with a different name, they will go, ‘What’s that?’ They’ve heard of organic cheese, and although they may not know exactly what it means, they know that there’s a certain quality associated with it. The same thing is probably true with ice wine.
If the key is to receive designation as a wine-growing region, then the winery needs to continue to build on its acreage and find partners to help them expand to the size that complies with the standards.
THREE THINGS THE COMPANY COULD DO NOW
Focus on the brand
“Frozen on the Vine” has value as a brand name of its own. Push its distinctiveness and even the fact that it can’t be called an ice wine in that crowded market. Play on its lower selling price.
Build long-lasting partnerships
Restaurants and local distributors are eager to promote local products and Georgian Hills can expand into other regions of Georgian Bay and beyond by partnering with chefs, restaurateurs and purveyors of local wines.
Help promote the wine region
To become like Niagara, more wineries must open in the region. Help to attract more wine growers by promoting the quality of the soil and grapes in the area, which could ultimately help build the amount of acreage required to be designated a VQA wine-growing region.
Special to The Globe and Mail
Facing a challenge? If your company could use expert help, please contact us at firstname.lastname@example.org
Join The Globe’s Small Business LinkedIn group to network with other entrepreneurs and to discuss topical issues: http://linkd.in/jWWdzT
Our free weekly small-business newsletter is now available. Every Friday a team of editors selects the top picks from our blog posts, features, multimedia and columnists, and delivers them to your inbox.