Rosemount to keep a cork on premium prices
Rosemount will resist lifting prices for its flagship wine, Rosemount Diamond Label, despite currency pressures on its key export markets in North America and Europe.
The winemaker will instead rely on fresh marketing initiatives, including a new sponsorship deal with the AFL and on-premise promotions to dominate its category.
Angus McPherson, managing director of Rosemount, which is owned by the world's biggest pure-play wine company Treasury Wine Estates, said Diamond Label was priced at $10 to $15 a bottle and that fitted perfectly with its strategy.
"TWE wants to win in what we call 'masstige' [prestige for the masses] and luxury wines, and Rosemount Diamond Label is core in masstige," he said.
TWE boss David Dearie has pushed through a masstige strategy since the company was split off from Foster's two years ago, focusing on quality wines that are more expensive than mass-market wines but also more luxurious.
For some of TWE's portfolio this has seen a lift in prices or an exit from unprofitable markets.
The world's second-largest alcoholic-beverage company, Pernod Ricard, plans to lift prices for its Australian flagship label, Jacob's Creek, in the US after a similar price hike in Britain.
"I don't think we are raising our prices," Mr McPherson said, "because I think we are in a really good price point where consumers are willing to pay for brands.
"It's above that $10 per bottle segment, so I think Rosemount is in a really good position where we are producing world-class wines. In the first half, we won 20 trophies on Rosemount, won 220 medals on Rosemount in the Australian show circuit alone."
Robert Parker, an internationally recognised wine expert and founder of the influential publication Wine Advocate, recently gave 28 TWE wines a score of 90 points or above, of which four were Rosemount.
Mr McPherson declined to comment if a decision to keep Rosemount prices stable in North America - despite the cost pressures of the high dollar - was hurting margins.
"Rosemount Diamond Label still sits between the $US8 and $US10 price point in America, it always has, and what we do is make sure we maintain the quality in the bottle," he said.
It certainly isn't hurting sales as Rosemount volumes in the US rose 9.1 per cent for the first half of 2012-13.
"The ability to get the consumer to taste the product and then the uplift in sales that we get, we are getting that. As things become tougher with the dollar, we will focus on making sure we are near the point of purchase. That's incredibly important for us."
Mr McPherson said Rosemount would also focus on communicating its brand strategy to consumers, and getting the wine in the hands of its drinkers through a range of new marketing platforms.
He said a deal first inked in 2012 for Rosemount to be the AFL's official wine partner has been renewed.
The winemaker is also chasing individual sponsorship deals with a number of AFL clubs.
Founded by entrepreneur Bob Oatley more than 40 years ago, Rosemount was sold to Southcorp for $1.5 billion in 2001 and then sold on to Foster's as part of its $3.7 billion takeover of Southcorp in mid-2005.