Case Study: Robert Mondavi and The Wine Industry


Seminar Paper, 2004

22 Pages, Grade: A / 1.0


Excerpt


Table of Contents

The Global Wine Industry

Overview of the US Wine Market

Robert Mondavi Corp.

Competitive Forces

Mondavi’s Strengths and Opportunities

Recommendations

Confusing Image and Strategy

Current Issues

Conclusion

Appendix

Table 1: World Wine Production by Country

Table 2: World Wine Consumption p.II

Table 3: World Vineyard Acreage by Country

Table 4: Wine Sales in the U.S

Table 5: WBM’s Top 30 US Wine Companies

“At Robert Mondavi, Wine is a collaboration with nature, a balance”[1]

The Global Wine Industry

The size of the global wine industry ranged from $130-$180 billion in the beginning of the twenty-first century with an average growth rate of 1-2% per year since 1994.[2] In general this market is very fragmented, because no company has reached more than one per cent of global retail sales in 2001. In order to describe this industry it is necessary to separate between two different wine-markets, the ‘New World’ and the ‘Old World’.

The international wine industry has been undergoing a significant restructuring. The ‘Old World’ producers such as Italy, France, Spain and Germany no longer dominate the global wine industry as they once did. No longer are the ‘New World’ producers such as Australia, New Zealand, South Africa and USA regarded with disrespect and underestimate.

However, there are still great differences between the two worlds regarding consumption, production and innovation. France, Italy and Spain share alone 75 percent of the worldwide wine production and consumption. A significant increase of the ‘New World’ production could be noticed during the last two decades. According to the World Wine Statistics the wine production has increased considerable especially in the ‘New World’ countries, from the average of 1997-2000 and 2001, for example, Australia by 34.77%, China by 57.03% and South Africa by 15.78% (for details please see Appendix, Table 1). Furthermore, we can see an expansion of the vineyard acreage in the ‘New World’ countries. Australia, for instance, has increased its acreage from 1991 to 1999 by 89.23% and the United States by 13.39% (please see Appendix, Table 3). Another significant increase of the wine consumption can be noticed in China with 52.88% in 2001 vs. 1997-2000 (please see Appendix, Table 2).

From 2002 to 2003 the Global Wine market has shown a total increase of only 0.2% and has presented 2.45 billion cases.[3]

These facts show the enormous growing competition in the wine industry. Especially the ‘New World’ producers were able to establish strong brands as well as to demonstrate a great wine quality through new technologies and intensive marketing. They are now taking market shares away from the ‘Old World’, which leads to the decline of the European wine market. In addition, it becomes harder to differentiate and emphasize this product.

It is interesting to see how the table wine market is segmented. There are five principal segments: jug or commodity (< $3 per bottle), popular premium ($3 - $7 per bottle), super premium ($7 - $14 per bottle), ultra premium ($14 - $25 per bottle), and luxury (> $25 per bottle).[4] The researches on the global consumer behavior of 2004 emphasize that wine continues to show a strong growth; especially an even stronger growth can be observed in the premium wine segment.[5] The European consumer behavior has not changed significantly.

Overview of the US Wine Market

In the last few decades the US wine market has changed dramatically. The retail sales increased from $9.1 billion in 1983 to $21.6 billion in 2003 (please see Appendix, Table 4).

The wine industry became an important segment of the US economy. The United States are now the fourth leading wine producing and third wine consuming country. Due to the geographical circumstances the wine industry is concentrating in California, with a 90 percent share of the US wine production.

However, due to the heightened competition and after the so-called “baby boomer generation” the wine demand has declined and leveled out at 1 to 2 % per year. Certainly the September 11th incident had a great affect on this market as well.

The US table wine revenues in 2003 show signs of recovery, with a retail value of $21.6 billion, a 2.3 percent increase over the previous year.[6] Furthermore, the export market of California wine shows a rebound in the year 2003. Due to the weakening of the dollar and the growing awareness of the California wine quality wine exports jumped 17 percent in contrast to the year 2002. Top international markets are: the United Kingdom, Canada, Netherlands, Japan and Germany.

Robert Mondavi Corp.

Founded in 1966, Robert Mondavi is an innovative wine producer, which has established a high and luxury brand image in the world wide wine market. It produces and markets fine wines under several brands, including Robert Mondavi Winery, Woodbridge, Robert Mondavi Private Selection, Arrowood and Famiglia di Robert Mondavi. During the years Robert Mondavi has aimed expansion and went into joint ventures with Arboleda (Chile), Danzante (Italy), Fresobaldi (Italy) and Chateau Mouton Rothschild (France). Robert Mondavi is the sixths of the Top 30 US Wine Companies with annual US Case Sales of 9.7 billion (please see Appendix, Table 5).

[...]


[1] Roberto Mondavi, Annual Report 2003, Page 2.

[2] Roberto Mondavi & The Wine Industry, HBS, Page 1.

[3] http://www.the-infoshop.com/study/roc14651_wine.html

[4] Robert Mondavi & The Wine Industry, HBS Case Study, Pages 1-2.

[5] http://www.fosters.com.au/corporate/news/speeches/2004/merrill_lynch_ny_speech_september_2004_final.pdf

[6] http://www.wineinstitute.org/communications/statistics/Sales_03.htm

Excerpt out of 22 pages

Details

Title
Case Study: Robert Mondavi and The Wine Industry
College
Emerson College  (Integrated Marketing Communications)
Course
Marketing Management
Grade
A / 1.0
Author
Year
2004
Pages
22
Catalog Number
V44474
ISBN (eBook)
9783638420655
File size
943 KB
Language
English
Notes
Double spaced
Keywords
Case, Study, Robert, Mondavi, Wine, Industry, Marketing, Management
Quote paper
Vita Bataitis (Author), 2004, Case Study: Robert Mondavi and The Wine Industry, Munich, GRIN Verlag, https://www.grin.com/document/44474

Comments

  • No comments yet.
Look inside the ebook
Title: Case Study: Robert Mondavi and The Wine Industry



Upload papers

Your term paper / thesis:

- Publication as eBook and book
- High royalties for the sales
- Completely free - with ISBN
- It only takes five minutes
- Every paper finds readers

Publish now - it's free