1. Issues and Challenges for the Israeli Wine Industry and the Role of National Branding Roderick J. Brodie, University of Auckland Business School New Zealand

2. Agenda 1. Current Situation 2. Global Trends 3.Building a National Brand 4.Challenges for the industry, companies and branding

3. 1. Current Situation Strong heritage –Traced back to Talmudic period –Rothschild heritage from 19 th century Relatively small –46,000 tonnes (NZ 270,00) –5 large wineries 80% of harvest –250+ small wineries Domestically based –Per capita consumption 4.5 litres –Imports 20%

4. Export Profile Exports tripled in the last decade last decade But 2011 exports still small – $27US million (NZ $800US million) –Less than 10% of local market (NZ 150%) 90% of exports from 12 wineries 55+% exports to North America 35+% to Western Europe Low international awareness of National Brand

5. Is there a revolution transforming the industry? expertise of young winemakers who've studied abroad new, quality grape varieties modern viticulture & wine-making prractices wine critic endorsements

6. 2. Global trends facing the Israeli industry 1.Increased production 2.Increasing international competition 3.Shifting patterns of demand 4.Internationalisation of ownership structures 5.Altered institutions of governance 6.Increasing retail power 7.Increasing importance of marketing and branding.

7. Issues and their importance for Israel

8. Issues and their importance for Israel cont’d

9. 3. Building a National Brand Management of brands at the heart of any successful marketing strategy For wine this is complicated by the hierarchical character of the brand identity –Rather than there being a single identity there is a brand architecture involving multiple identities. –Traditionally this has included: Country of origin, region and/or appellation, domaine/bodega/estate, Producer (and commonly also distributor) labels, and retailer labels. –New World producers: Country and region have had a particular significance, Variety has also played a major role. Wine tourism and hospitality place a new emphasis on developing broader identities of the various wine regions

10. Lessons from Brand “New Zealand Wine” Comprised of a number of elements: –its core is a discourse of quality, promoted by industry participants, local wine media and the industry’s representative organisations, –discourse is sustained by continued attention to quality from winemakers, effective programmes of collective marketing and careful cultivation of key gatekeepers – supermarket buyers and international wine media. Brand is supported by: –effective information exchange in production, commitments from winemakers, collation and dissemination of industry information made available through the industry website, –over fifty trade shows and tastings around the world annually, –new logo of “pure discovery” which is underpinned with the theme of the previous logo of “the riches of a clean green land”.

11. Different Perspectives of Branding 4 perspectives: –Customer End consumer vs. trade vs. other stakeholders with different attitudes and perceptions –end consumer market segments vary considerably »connoisseurs, aspirational, enjoyment, new,… –Managerial Resource, asset or capability that creates value (equity) Need to understand the trade-offs –Legal & Socio-political-economic Government and national interest –Institutional The filière –innovation, historical background, institutional and social linkages –co-ordination and co-operation among industry participants –based on an agribusiness/rural/lifestyle Regional and geographic indicators.

12. How a National Brand Creates Value? Brands are intangible (relational) assets –a brand’s role in a marketing system is much more than end consumer associations with a name or logo –brands facilitate processes within value systems multiple networks Brand “Israel Wine” is an umbrella brand within a complex network –Complex interactions between national & regional terroir identities and other elements in value networks

13. A National Brand is an Umbrella Brand Acts as an umbrella for: –Winery Brands –Event Brands –Varietal Brands –Regional & Sub Regional Brands –Allied Brands Other National Brands e.g. Tourism

14. Characteristics shared by the worlds strongest brands: Brand ISRAEL WINE? Necessary to have: distinctive positioning, delivery of customer benefits & value, relevance, consistency, a sensible portfolio integration of marketing activities, management involvement, understanding and support Most critical characteristics are: Clarity distinctive values are understood and lived and loved by those who deliver them Consistency in what (who) they are) Leading the market with delivery ability and exceed customer expectations and create delight

15. 4. Challenges for the industry, companies and branding 1.Balancing national, regional interests and individual winemakers’ interests. 2.Production issues 3.Organizational and governance issues 4.Coordinating national, regional interests and individual winemakers’ marketing activity –One national organization? –How to engage the members of the industry. –How to engage other stakeholders 5.The importance of sustainability. 6.Broader national issues.

16. Thank you! Any questions or comments?