Golden Kaan Aims to Bring Attention to South African Wine Category

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In 2000, German wine group Racke partnered with South African wine marketing and trading company KWV to develop a South African brand that would define the region for a worldwide audience. Launched worldwide in 2003 and in the United States in 2005, the company has relocated its international offices to Sonoma, California, expanded its portfolio this month to include a premium Chenin Blanc and revealed their intention to double their penetration into the U.S. market. According to Golden Kaan president Marian Kopp, a vast majority of South African wine exports end up in Europe, especially the UK and Netherlands. While a vast majority of Golden Kaan's wines are sold in Europe, the company has turned its attention to increasing their U.S. sales to 100,000 cases in 2007.

"The important thing is we are now based in the U.S. and we are paying high attention to the market here," said Kopp. "In terms of our first years here, we are experiencing the same level of interest as in other markets. We have put ourselves on the shelves and we are making great inroads into the market. We don't want to be another niche--we want to do some business."

Golden Kaan aims to capitalize on the strong growth of imports in the U.S. market, especially that of South African wines. In the latest Nielsen Company data, imported wine volume has increased 3.8 percent in the 52 weeks ending March 10, 2007, while dollar sales have risen 5.6 percent. South Africa, though off a small base accounting for about .3 percent of the overall market, is second only to New Zealand in terms of volume growth and third (behind Argentina) in dollar growth.

"I think you have to be careful in launching an unknown brand, but the U.S. is geared so much at the existing wine consumer," said Erik Ran, vice president sales and marketing at Golden Kaan. "There's a whole new group of people coming in right now and they are adventurous about their wine choices. We are in this for the long haul, so we are taking a careful approach. We're being noticed for our wine instead of as just another critter brand."

Kopp and Ran both stressed that Golden Kaan is committed not only to building their own brand, but the South African brand as well. As such, they avoided heavy discounting to get the product onto the shelves and the brand is line priced at about $10. "We want to be in an approachable sweet spot," said Kopp. "We think that's the place for brand building. It's easy to come in cheaper, but then you are subject to the quality of the bulk market and have no money to advertise."

South Africa has 100,200 hectares planted for wine production. In 2005, 593 million liters were produced, down from 617 million liters in 2004. The Cape region represents 3.1 percent of world wine being produced and ranks number nine in overall volume. Golden Kaan is one of the fastest growing South African wine brands in the U.S. The Golden Kaan portfolio includes: Cabernet Sauvignon, Merlot, Pinotage, Shiraz, Chardonnay, Sauvignon Blanc, Chenin Blanc and Pinotage Rosé.

A portion of the proceeds from every bottle sold supports the South Africa Wine Industry Trust, which assists previously disadvantaged vineyard and wine industry workers.