Kudler Fine Foods Product Launch Plan: Canada and Italy

Introduction

Kudler Fine Foods was started in California in 1998 by Kathy Kudler with the intent of supplying high-end, diverse gourmet items at reasonable prices. It has already expanded to four stores and is considering international expansion. Specifically, Kudler Fine Foods is considering entry into the Canadian and Italian retail grocery markets, in both cases targeting consumers with its high-quality organic wines.

Italy, whose culture is well versed in gourmet foods, is likely to be interested in this new entrant. Cultural differences in both countries might pose challenges, but with carefully and meticulously worked-out details in the product plan, there is reason for optimism regarding the profitability of Kudler's entrance into both the Italian and Canadian grocery markets. The objective of this product launch plan is to delineate the plans for Kudler's domestic and international development.

Product Description and Positioning

Kudler's reputation is associated with its world-class wines, gourmet meats, and other select grocery items. Its American brand of wine has a distinct, uniquely Californian character that differs in taste and form from wines produced in other countries. An advantage of Californian wine is that, while organic wine generally ranges from $20 upwards due to its premium qualities (compared to regular wine, which ranges from a few dollars to hundreds), California organic wine tends to be cheaper, particularly the green brands (Liebert, 2001).

According to Kudler, their wines represent an aggregation of specialized, top-notch domestic and international products rated highly by discerning connoisseurs. Kudler's also carries a wide variety of spirits at reasonable prices.

In both countries, Kudler will position itself as a niche market specializing in a distinctly Californian homegrown wine. International demand for California wines continues to grow rapidly. According to California Wines (Eco-friendly, 2005), "exports have increased from $35 million in 1985 to a record $808 million in 2004 — an average increase of almost 20% per year." This accessibility can be used to Kudler's advantage in both countries.

California organic wines are particularly in demand because they are cheaper than regular organic wines, especially the green brand. Moreover, California wines are more accessible, as they are produced in plentiful supply (Liebert, 2001).

In Canada, the focus will be on the organic appeal of the product. Canadians are enthusiastic about organic food to an even greater extent than Americans. Kudler will therefore position itself as a 100% organic wine producer. This is particularly important since Canada has strict standards governing what constitutes organic wine, and Kudler will need to adhere closely to those rules in order to gain market acceptance (CBC, 2009).

In Italy, the product positioning will emphasize the American niche of the wine. Currently, mostly Italian wines are being exported, the majority of which fall into the category of sparkling wines with a distinctly Italian taste and form. Italian wine exports, although once accounting for 30 percent of the massive export output of the European Union, have decreased to 25 percent, even as the total volume of wine exports continues to rise (Export.By, n.d.). Since Kudler features a different brand and taste, the company can appeal to Italian interest in expanding wine exportation by demonstrating that it can introduce a purely American brand — a different taste and caliber — into the Italian export market. Local consumption may have decreased, but Kudler, by entering the market, may be able to capture a share of that export opportunity while still profiting from local consumption. It is toward this reputation of Italian wine production, with attention on organic wine specialties, that Kudler will aim to position itself.

Targeting and Market Needs

Kudler will target two different consumer segments in Canada and Italy.

In Canada, Kudler will primarily target younger consumers, followed by the younger middle-aged and elderly populations. Gatehouse (2009) reports Canada as being the third "hottest" wine-consuming country, with consumption rising by almost 27 percent over four years. The most preferred wine is red, with the rosé brand also proving popular: "In the old days, you looked stupid drinking rosé. It was only for people who knew nothing about wine. But now the attitude has changed. Younger people find it easy and fun — the kind of thing you might have at the disco." The market appears to be driven largely by wealthier consumers, immigrants, and the young (college-aged). Kudler should also note that the majority of Canadians prefer less sophisticated vintages over more sophisticated brands (Gatehouse, 2009).

In Italy, Kudler will target the export market, specifically retail and discount stores and wholesale grape and wine shipment distributors. This targeting strategy will be addressed in greater detail in the distribution section.

Enthusiasm for organic foods is on the rise, driven by fears over pesticides and concerns about sustainability. This is particularly pronounced in Canada, where "organic food is a booming business," with sales reportedly rising by 20% a year for most of the decade. The market has grown so quickly that major supermarket chains have difficulty keeping up with demand (CBC, 2009).

While Canada has native wine producers, its wineries fulfill only a fraction of the growing demand for the beverage. In this context, Kudler — already aligned with Canadian organic standards — can supply a national need for organic wine. Moreover, according to a report by a Canadian winemaking association, Canadian wine imports and exports have focused on marketing the region's ice wines (O'Dell, 2009). Kudler can step in by promoting its California-based wine, which possesses a distinct flavor, thus filling a gap in a market that already prizes organic beverages.

Regarding Italy: the country's wine export business, always strong, has somewhat weakened in recent years due to economic difficulties. Italy's reputation as a wine-producing country remains formidable. Although local wine consumption is weak, Italy would welcome support in increasing its wine exports, and Kudler — with its quality organic wine representing a brand distinct from regular Italian merchandise — can step in with its American products to help address this need.

Conclusion

For Kudler to succeed, the emphasis should be placed on "think": think differently, think constantly, think intelligently.

The potential seems favorable. As consumers become increasingly discriminating about what they drink, the demand for organic wine continues to grow. Because we are living in an increasingly health-conscious society, wine industry experts predict continued success for organic wines despite tough economic times. Although sales will not spiral exponentially due to recessionary pressures, there will be an upward trajectory of growth and interest. This outlook is supported by a research survey conducted by the National Restaurant Association in the United States, which identified organic wine as one of the "hottest drink trends for 2009" (Petzoldt, n.d.).

With determination and perseverance — and careful thinking — Kudler may yet succeed in making its mark in its targeted international markets.

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