Forecasting the future 12 years hence is not an easy business at the best of times, and I occasionally ask myself why I do it. The immediate and unhelpful answer of “that’s what you told the organisers you would do in the speech” is followed very quickly by a more fundamental realisation that looking forward is what we must do to shape our goals and actions today, tomorrow and next week.
I was mindful of this, and the local context of what’s happening today in South Africa, as I waited to give my speech at the VinPro Day in Cape Town. At a national level, seismic political changes are afoot thanks to the election in December of Cyril Ramaphosa as leader of the ANC, and therefore the country’s de-facto president (though the unloved incumbent, Jacob Zuma, is not officially due to step down until next year). For the first time in a decade, South African politicians and commentators are speaking in an optimistic tone about the future.
In the Western Cape, the immediate focus is on the unprecedented three-year drought and subsequent water rationing, which has caused havoc in the winegrowing areas that rely on irrigation, and prompted the Cape Town government to impose draconian restrictions on personal water use. In an earlier speech at the VinPro Day, Francois Viljoen of VinPro warned that this year’s grape crop would be the smallest since 2005.
Amid all of these immediate concerns, my job on the day was to move the 900-strong audience at the CTICC in Cape Town towards thinking further ahead. My initial proposition to the room was that in the past 12 years we have seen some changes – growth of China as a wine consuming country, explosion of sparkling wine consumption, and the rise of the female wine drinker as an economic force, particularly in developing markets – but nothing outrageous or radical. Looking 12 years ahead, we can speculate that some of these trends will continue. However a more interesting thought is: what are the underlying cultural and societal drivers of future behaviour? And how should we position ourselves, and our businesses, to respond?
My contention is that the trends in the wine category over the next 12 years will be affected by a handful of powerful consumer forces, which I have dubbed the ‘six As’:
Awareness: without connecting effectively with your market in terms of recognition and recall, brands (which would include regions and countries in my book) will not be able to have any lasting success. While one could argue that this has always been true, the past decade has seen a growing polarisation of success between the brands and countries that have strong recognition and familiarity, and those which are less well known
Availability: closely allied with awareness, brands must focus on being available in the proliferating channels to market, and think carefully about the costs and benefits of ignoring certain channels in favour of others. Channel management has always been difficult, but the continuing rise in prominence of online retail (particularly in Asia) has put this business question at the heart of brand strategy
Accountability: the world is going to continue to become more knowledgeable, and judgmental, about the brands and products they use. Brand owners will need to think even more carefully how they present their offering in terms of reassuring consumers that by making a purchase, they are buying something that has been looked after, with ingredients that are high quality and not harmful, and that in some way the brand is contributing to the effort to reduce waste, pollution and energy use
Accommodating: If the past 12 months are any guide, the next 12 years will see the momentum of the gender equality movement grow, and translate into further redress and respect for other ethnic, gender or sexual orientation groups across many major countries. The notion of ‘Accommodating’ is that brands will need to portray themselves as inclusive and moving with the needs of the societies in which they operate.
Affluence: since the turn of this century, extraordinary changes have been occurring in the developing world. There are now 1 billion fewer very poor people than there were 20 years ago. This unprecedented change in the fortunes of humanity has been driven largely by China, and my prediction is that the next 12 years will see the realisation of the other half of this revolution, namely the full development of a large relatively affluent middle class in China and India. Already we can see the effect of this in China, where the imported wine drinking population has almost tripled in 10 years, and we believe will hit 100 million within the next decade
Adaptability: It almost goes without saying that the pace of change around the world is accelerating, bringing with it urgent and in some cases existential challenges for brands. The ability to move with the times, and – if possible – stay one step ahead in terms of innovation and consumer engagement will determine whether brands can be successful over the next decade or so