Kudler Fine Foods' organic wine export opportunity to Canada

Kudler Fine Foods

California has long been well-known for being on the cutting edge of the food industry. Since 1998 Kudler Fine Foods has had a reputation as an establishment where consumers can purchase high-quality, sustainable products. Kudler's outreach has expanded into a wide diversity of product offerings, and it is considering embarking upon the venture of exporting organic wines to Canada.

Product offering

Although the definition of organic varies wildly in the U.S., and from nation to nation, Canada has very strict standards of what constitutes organic wine. Any producer entering Canada must be mindful of the fact that Canada has very strict standards as to what constitutes organic food. "National standards were put in place by the Canadian Food Inspection Agency on June 30, 2009, stating that only food products comprised of 95 per cent organic content can be certified as organic or have the variation of the word 'organic' anywhere on the product or its packaging. This rule applies to fruits, vegetables, dairy products, meat and processed food. The product must also have been grown using natural fertilizers (Going organic, 2009, CBC). However, there has been a trend towards greater congruence of the two national standards which has resulted in greater acceptance of U.S. wines. For example, in Canada, "ever since the U.S. implemented its Organic Law in 2002 to accredit these products, organic wine consumption has also grown by 20% per year" (Worldwide organic wine consumption on increase, 2010, Wines from Spain).

SWOT

Strengths: Kudler Fine Food's reputation for producing high-quality products in the United States; increased demand for organic products in general in Canada at a level even higher than that of the U.S.; a strong commitment to environmentalism in Canada, a lack of native competitors with the typical California wine 'flavor' profile of richness and robustness; higher demand in Canada in general for wine

Weaknesses: Possible discrepancies between definitions of organic in the U.S. And in Canada may cause concerns; the desire of Canadian winemakers to become a 'powerhouse' in the exporting market and to aggressively market themselves against current imports

Opportunities: The explosion in demand for organic goods; the fact that Canadian wine market's tastes are still taking shape; this could be a great 'first mover' opportunity to shape the Canadian taste profile for wines

Threats: Beers, other spirits, and Canadian ice wines might rival Kudler. Even if not organic, they have the sustainability marketing advantage of being positioned as more 'local'

Competition

Internationally, there is a great deal of competition in the international organic wine market. Germany has made a substantial investment in growing its product, and the German government was one of the first to invest in organic wine production, followed by France, Spain, and the United Kingdom (Worldwide organic wine consumption on increase, 2010, Wines from Spain).

Product offering

Kudler's wines are known for their accessibility, as are most California wines, in general. A New World wine source that is now in competition with many European wines for quality and diversity, "international demand for California wines continues to grow rapidly. In almost 20 years, exports have increased from $35 million in 1985 to a record $808 million in 2004. This is an average increase of almost 20% per year (Welcome to the Golden State, 2010, California Wines). Currently, 18% of ?total production is exported to over 125 countries" and California winegrowers have taken a voluntary vow to uphold "Code of Sustainable Winegrowing," which governs sustainability practices as well as organic farming in California (Eco-friendly, 2005, California Wines).

Product identification

Publicizing this vow of sustainability in addition to its organic status seems like the ideal way to market Kudler's wines as a distinct, yet uniquely California brand that will not seem to openly challenge Canadian ice wines on their own terms and flavor profile.

Justification

Canada "with a growth rate in wine consumption of 20% per annum" has been identified as "the country with the greatest potential for organic wine sales, representing a turnover of around $2 billion per year," given its simultaneously expanding and evolving interest in both organics and wine (Worldwide organic wine consumption on increase, 2010, Wines from Spain). Although during the financial crisis, demand dropped 5%, consumption is once again on the upswing.

Conclusion

As Canadians begin to embrace wines -- and organic products -- more and more, it would seem as if the time is ripe to capitalize upon this new opportunity, and take advantage of Kudler's ability to gain a strong foothold in an expanding export organic market