Many factors are different in regards to the marketing of wines domestically vs. internationally. Rules and regulations are different in that in regards to domestic term laws managed by the federal government are usually more rigid. In the United States wineries must sell to a licensed distributor. Where as for example Japan a winery can sell to anyone who has an import license.

But the difference to be discussed is the basic strategies and postures of wineries involved in domestic and International sales.

First I would like to discuss the basic posture wineries hold to one another which in ways undermines their effectiveness. In domestic markets wineries tend to take a polarized posture to each other. This means they do not directly share information or allocate resources to collectively support each other. Of course a few do take the more communal approach but the usual rule of thumb is its one label is pitted against another and appellation vs. appellation.

In international terms a cohesive and collaborative posture is the rule of thumb. This is why many believe Australian, Chilean, and South African wines have been so successful in expanding their presence on the world stage while California wine while still expanding our advancement is a little more tapered.

I believe success for the Australian, South African, and Chilean wineries is rooted in ideology. Being from a region with limited domestic markets available they naturally develop an eye to international on goings and opportunities. So for them to position themselves to develop external world markets is expected. This includes forming collaborative inter supportive relationships, to allocate resources to undertake international projects and achieve objectives.

But here in California most wineries undertake of market development independently. This is consistent with how we view business relationships. But in regards to boutique wineries this can be detrimental smaller estates. Boutique wineries that are already sometimes stretched thin for resources are squeezed and forced to dedicate every penny to just staying a float especially for wineries producing 5,000 to 10,000 cases a year.

Costs are usually much higher and any effort they put forth in market development holds a much higher risk margin. This is why for the most part many wineries are frozen in bulk production measures in that they can not afford to develop their own label.

Unfortunately International market development is actually much more compatible with boutique wineries interests but is for the most part ignored because few are familiar enough with trade to get things going.

But the most import aspect of International ventures is to combine resources between wineries in a joint venture so that costs are minimized and risks are all but removed. International market development in many ways is much less costly for starters because international ventures are usually undertaken in collaborative efforts. Which means instead of a small boutique winery shouldering the cost and risks alone, costs and risks are distributed over several members.

For example a winery may invest $50,000.00 in marketing by itself in a year. However by putting together 5 wineries together the costs are shared. So each winery only pays $10,000.00 for a solid year. With this kind of structuring there is even room for hiring sales, and research team members to enhance your labels presence.

Forming a collective group also allows for the construction of product packages of various qualities and price margins. Which in buyer terms is much more attractive then having your wines stand alone. As you know the purchasing of wines is an investment and the surer a buyer is that they can recover his investment and maximize his profit margins the more likely and the stronger a commitment will be from the buyer.

Volume of purchase is another area of difference.

In regards to domestic sales purchases are on the average 56 cases (1 pallet) to 2 pallets.

In terms of international purchases contracts start at 1/ 20ft container which is 750 cases on the average and in many cases it is much more. For example in Japan a midsize distributor will contract for 5 to 10 / 20ft containers a year. Large firms contract for 60 to 100 containers for each label.

In regards to stability of domestic vs. International Markets

Domestic markets tend to rise and fall in many cases as Mr. Vogel of Kit Fox vineyards states, “It’s feast or famine. “ The reasons for this are many.

But the primary reasons for this is that one, our wine drinking culture here in California is not quite strong enough so purchases tend to be seasonal.

Another reason that lies at the root of customer purchasing habits is how much expendable cash people now have or are willing to part with. In recent years with the sky rocketing in fuel costs, wines are being pushed further and further down the shopping list and in many cases being completely removed. So now that $20.00 that once went to the weekly bottle of wine, is now going to the gas tank and the car note.

In International terms there is always a stable economy to sell to. For example Japan. Despite fuel costs have hit Japan just as hard, 80% of the persons in Japan do not drive. This means the $850.00 dollars a month of expendable cash the average full time worker has a month, is still very much so intact to be used for the purchase of that bottle of California Wine.

One point that is very interesting in regards to Domestic vs. International is the fact that there is also an emotional side this is vibrantly present in international sales, one that does not exist here domestically for buyers to say yes. Domestically in most cases if you mention the name California for example to a New Yorker the look on their face pretty much sums up not only there attitude towards you, but that the conversation will be a short one. This is the same human emotion that is present when a New Yorker sees a bottle of California Wines on their local stores shelf.

But if you have every traveled abroad and seen the gleam in a persons eye when you said California you can instantly see that the mood often times changes and a deeper connection is in process. The point I’m making is that California wines when on the international market is not looked at as just a product. But is more closely linked and connected to ones dreams, and aspirations. That ability to reach into the heart by just a word is stronger then any million dollar marketing scheme.