Vincor International IncEssay title: Vincor International IncVincor International Inc. was Canadas largest wine company and North Americas fourth largest in 2002. According to the company’s mission statement, their goal is to become one of the world’s top ten wine producers, producing Vincor-owned new world premium wines which would be marketed and sold in all major consuming regions. Thus, as part of its growth strategies, Vincor has entered the U.S but in order to further fulfill mission, it must stretch beyond the borders of the North America. Although Vincor has had successes in its other acquisitions, should they acquire the Australian company, Goundrey Wines (GW)?
The current trend in the wine industry is moving towards various consolidations in retail, wholesale and production. The key was in distribution and marketing and there is an increase in the emergence of world brands and competitors. This is an opportunity for a new world producer such as Vincor. Vincor has a dominant position in Canada and has some strong brands. Because Vincor grows by acquisitions, the acquisition of GW would give it complementary product lines since GW produces ultra premium wines. GW is located in Western Australia which produces and markets approximately 26% of the country’s premium and super-premium wines. Australia has about 5% of the world’s production as well and there is the expectation of
Vincor​-to​vendors. The Vincor and Vincor Producers Group Ltd. have built a strong strong connection. The first five months of 2016 saw an increase in sales from 2% on a yearly basis, to 14.5% on a year ago ’a growth of over half a per cent from a year ago. In the US, which will be the largest buyer of premium wines, the total sales increased by 12.6% in 2016 (from a higher value of 18.5% in 2011). The growth took place not only in consumer and retail production but also in the industry in general. Over three times as many bottles and wines were bought in 2016 as were sold in 2014 ’ meaning that a further 11% increase in sales (from a higher value of 2.3 litres) made up the difference. In a market for premium wines, the average quantity of wine purchased is the one-time average. This suggests Vincor is looking to add an affordable premium, which is the focus for the future Vincor-to​vendors group. One way to think about Vincor​-to​vendors would be the development of a global brand that represents Australia in the US, with VINCOR offering an exceptional brand that represents the Australian market and Australia in general. This will make it possible for consumers to be able to choose a Vincor-to​vendor from more than 50 wines and the price differential could benefit the Vincor brand. The Vincor Producers Group is a large brand and a growing one. By increasing its international presence, the Vincor Producers Group has further strengthened its international base. The recent investment by the Vincor Producers Group will make it more appealing to many producers with the potential to increase their global sales to as high as 25%. This will allow Vincor to focus on growing both internationally and in the US market and can make it easier for competitors to enter into the same game. The Vincor Producers Group also recently announced this plan to raise the minimum sale price from $500 per bottle at www.vincor.com to $1,000 per bottle at Vincor​-to​vendors. The first set of global wine products is to be created by Vincor this year in an effort to broaden the market which could open up to more producers and also help in creating a new sector for wine.
*Please refer to the table under “Table of Contents”
Note: I currently do not account for foreign sales of wines, as these are generally not taxable in the UK. Therefore I am not able to provide comparative sales data for sales of Canadian wine products.
Dollars Sales of Canada and Foreign Wine Production
Canadian wine revenues represent about 6% of the