Inniskillin is the brand product of Mr. Roger Provost. Icewine on the other hand is an alcoholic drink, mainly made as dessert and was created when grapes are frozen and pressed whilst in this particular state (Lippincott Williams & Wilkins, 2008). The main ingredients that give rise to this wine are the extracts, acids, and sugar which result in dessert wine when the frozen grapes are pressed (Jones G and Hirasawa J, 2007).
The first production of this iconic product took place in Franconia, Germany. It then went on to be produced in Eiswein, still in Germany but also in Austria. The first export of this product came to be made in 1997. Over the last ten years, Roger Provost has created this internationally recognized brand, which is considered a luxury. It has won several Oscars including “The Star Product of the year” which was a ceremony at the Frontier Awards. These awards were nicknamed as the Oscars of the travel retail industry and are estimated to be worth twenty billion US dollars (Rowe, W. E., 2009).
Nevertheless, it is in October 2005 that this product achieved yet its highest recognition. It achieved global recognition. This happened when the United States based Constellation Brands, which is the largest company that produces wine launched a takeover bid for it. However, by some sort of miracle, it never happened (Lippincott Williams & Wilkins, 2008). This is because the shareholders never reached a two-third agreement to support the takeover. Because of this, Vincor survived. This is to be discussed later in the discussion.
Just to now the strength of the market share that Icewine commands, we must examine its strength as an autonomous product. First, it has very many awards under its belt. It has also been showcased in publications that talk about wine. These publications have fed the readers positive information about it and shown it as among the best wines in the world. Provost in his creation of Icewine, has created a very positive excitement in the rather sullen wine industry in Canada. Consequently, wine producers have rushed to cash in on the profits made by Provost. This is expected in any competitive industry (Rowe, W. E. ,2009) . However, it is bringing some negative effects since there are cheap counterfeits that are bringing the ruin to the industry.
The underlying question is if Roger Provost has a meeting with the now new Vincor owners, the United States-based Constellation Brands (who did not succeed in getting the company the first time) in a week’s time. What would he recommend to them as the best strategy for Inniskillin Icewine? Should he recommend to them to maintain Inniskillin Icewine's current distributive strategy which is based on exclusivity? Alternatively, should they maximize Inniskillin Icewine's premium margins by utilizing the global reach of Constellation's distribution network to make the product more available in more markets?
Another question of course comes arises in the amount of effort that Roger Provost should employ in encouraging Voncor Q Agency to preserve Canada's Icewine designation, much like France's Champagne and Cognac designations are protected? Is such an approach futile in an increasingly globalized industry, or should the origins of special products be protected? To answer all these questions, Canada and her Alcoholic Beverage Industry must be examined. Since 1769 (Lippincott Williams & Wilkins, 2008),
Canada has produced good products of spirits, which have been distilled. By mid eighteenth century, the country had two hundred and more distilleries. To mention just but a few successes in Canada’s Alcoholic Beverage Industry, the firs one will be Joseph Seagram and Seagram Company. this company was bought by Vivendi in the year 2000 for an estimated value of 46.65 billion dollars. Though this company started as a waterloo project in 164 in Ontario Canada worth a few coins, it came to be worth that much (Rowe, W. E. ,2009)..
The second success story of CanadaAlcoholic Beverage success story is Hiram Walker and Walker’s Club Whisky. This company successfully distilled cider as it was successfully operating a shop of groceries in Michigan. Even though this was an American company in the beginning, the proprietors took notice of the wide available market in Canada, the readily available raw materials and the much cheaper inputs. Thus in 1898, this company was given permission by the Queen of England to supply North America and even Britain with its products.
This permission was called the Royal Warrant. In addition, it was bestowed upon the privilege of using the Royal Arms in the branding of its business. Mr. Walker, the proprietor of the company sought many opportunities and ended up with numerous businesses. For example, he went into lumbering, exported more whisky to even the European nations and generally grew in business. In the end, Canadian Club, which was the adopted name for his wine, became a global product and was the leader in the industry. by the year 2004, this whisky was available in over one hundred and fifty countries.
Constellation and Gallo Brands remain the biggest wine brands in the world. They are companies both based in the United States. Wine consumption remains highest in Europe, consuming over fifty percent of all produced wine in the world. This is as per 2005. The United States consumes in the average, 7.9 liters per annum (Lippincott Williams & Wilkins, 2008). Yet, majority of wine production still come from Europe.
The deduced point above is that Constellation Company remains one of the largest wine suppliers in the world. Thus, to answer the query, the best thing that Mr. Roger Provost should recommend to the new owners of Vincor is to use the vast networks of Constellation Company to increase their profits and get a wider international market. this is because this company has already made a brand for itself that is global and has loyal customers. If the new owners were to go the exclusivity strategy way, then they would deny themselves a huge chunk of the international market. as seen in the discussion above in the excerpt by Geoffrey Jones and Jillian Hirasawa ( Inniskillin and Globalization of Ivcewine) of Harvard Buisiness School dated February 2nd 2007, Vincors strategy of exclusivity has worked well, yess. However, the company has not been able to reach a wider market. Its main market remains to be Canada. Thus the best strategy is to use the Constellation network.
In an increasingly globalized industry, most may think that the above attempt is a futile act. Yet, I want to differ. Though the global economy and tasted may change, the tastes of most Canadians will never change. They still prefer what they preffered along time ago (Lippincott Williams & Wilkins, 2008). The special products shpuld be protected because they give indegenousity to most Candaians.the best casing point is from the excerpt which cclearly shows that most Canadians prefer their own roducts but not from other nations.a study also show ta like Americans, most Canadians are very patriotic and preffer things which they can relate to their country.
As seen in the above discussion, Canada has had a long history of wine and wine companies. The first one is of course the numerous indigenous companies which continue to be swallowed or take over by the much larger American companies. Whereas, Mr. Roger should tell the new owners of his company that the should consider they much available network of of Constellation Company, this will increase their sales and profits. Consequently, the company’s image may be improved in the process and increased the much coveted (Jones G and Hirasawa J, 2007).
GEOFFREY JONES JILLIAN HIRASAWA (n.d.). inniskillin and the Globalization of Icewine.
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Rowe, W. E. (2009). A history of Virginia wines: From grapes to glass. Charleston, SC: History Press.