OKANAGAN CRUSH PAD

OCP’s vision revolves around passion, quality, and experimentation. They focus on supporting the industry rather than
increasing their market share and volume. OCP’s marketing and brand message is clear; they do not wish to rapidly expand and
compete with the established, larger Okanagan or national wineries. Embodiment of the Okanagan terroir flavor in their wines
is paramount to them, as is nurturing startup winemakers and introducing innovative winemaking practices to produce exciting,
high quality wines in exclusive batches. This approach presents numerous unique marketing challenges for OCP in their
endeavors to establish themselves as a reputable player in the very competitive winemaking industry of the Okanagan and
Canada (Wines of Canada, 2011) (Okanagan Crush Pad, 2012).
Situational Analysis
This section explores trends in the wine industry, providing analysis and insight into the market, consumer trends and
behaviours, and the competitive landscape. Further analysis is provided to how these form both threats and opportunities for
OCP, and their internal strengths and weaknesses.
Industry Overview
Market figures and wine consumption continue to grow globally, but Canadian figures outstrip those of the world average
almost sixfold, with projections moving the country from fifth, to the world’s third largest wine consumer by 2014; surprisingly
however, Canada is the only wine-producing country where imports exceed exports.
On-trade companies, such as lounges and restaurants, have the most buying power as they distribute the majority (72.4%) of the
wine market volume (MarketLine, 2012). This facilitates the market’s retail growth, as wine is becoming more popular
compared to spirits and beer, and has surpassed spirits in terms of liquor store sales (Tuttle, 2012) (Nichols, 2011) (Canada
Newswire, 2011).
The Canadian government exercises strict control and taxing regulations over the domestic and international wine distribution.
Many of the smaller wineries prefer (or are only able) to trade within their province. However, pressure from wineries and
changing liquor board rulings may see these regulations changed in the very near future (OKCrushPad, 2011) (Klassen, 2012).
Industry and Market Trends
In British Columbia, wine consumption has remained relatively stable over the past five years, despite an almost 20 per cent
rise in prices. More expensive, top-shelf wines are gaining ground, but table wines are still the most popular (Wine Market
Council, 2011). Increased consumer spending is notable by customers purchasing more liquor in restaurants (Tuttle, 2012).
In some ways, the industry is still catching up to the changing demands of new consumer markets. Wine is a highly
differentiated product, with a variety of brands available in the market. Some wine producers have begun to improve brand
management and modernize their merchandising by launching bold brand designs, “cheeky” labels, and integrated marketing
campaigns in order to become more identifiable with the public. These factors have intensified rivalry between the brands,
influencing wine drinkers to use the label designs and brand recognition as the only differentiating factors when choosing a
bottle. This opposes traditional wine advertising, which focuses on the winery itself and its accolades, versus brand character
and product benefits (Roberts, 2012).
Although wine used to be considered “the exclusive domain of the educated and wealthy male”, wine consumption has now
pervaded all areas of society, especially the unsophisticated wine drinkers of Generation Y (YaYa Connection, 2012). Modern
buyers are looking for a more casual relationship with their chosen wine brand, with a message that speaks to their beliefs and
attitudes (Wine Australia). This is reflected in their preference for unconventional labels.
Consumers are becoming more attracted to the idea of boutique wineries which have a unique story. Similar to the craft beer
revolution, there has been a change in consumer preference from big-box corporations to local, smaller, sustainable
winemaking and brewing companies such as OCP (Hamilton, 2012), (Gismondi, 2012).
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