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Tuesday 28 June 2022

In-demand Giesen delays Woolworths 0% launch

4th April 2022 By Jonathan Mitchell | | @foodtickernz

Strong demand and supply chain challenges has seen winemaker Giesen push back its 0% wine launch into Australia’s biggest supermarket chain.

Giesen hopes capacity constraints will ease so it can target new markets next year

Group general manager Kyle Skene told the Ticker it had planned to launch three 0% Giesen SKUs into about 800 Woolworths supermarkets in Australia in May, but that had been delayed to September for two reasons.

“Our production capacity to keep up with growth was going fast,” he said.

“Shipping delays and the freight issues we had through Christmas getting product out to Australia meant that we weren’t going to able to hit that [May] window.”

Despite the capacity pressures, the company continued to grow the popular 0% alcohol range adding a merlot last month and this week a riesling SKU.

“This part of the business is moving very fast, sometimes it’s hard to keep up,” Skene said. “It’s all new business and in new segments to what we’ve traditionally been working in.”

Kyle Skene

The company secured retail distribution of its zero alcohol range in Australia about July last year through Dan Murphy’s, BWS and independent retailers.

As well as the entry to Woolworths, Skene said the winemaker was hopeful of signing on competitor Coles from October to stock 2 SKUs of zero alcohol wine under the Ara brand, which was a “work in progress”.

Skene said the United States was its biggest market for zero alcohol with 40,000 case sales forecast for the 2023 financial year, around 50% sold through Whole Foods Markets and the other 50% in independent retailers.

He said Australia was roughly the same number, while New Zealand was third with about 10,000 cases.

The company invested more than $1m in spinning cone distilling technology to separate and remove the alcohol content in its wine in 2020, but Skene said the company was considering signing off on a much bigger machine in the next fortnight.

“At the moment, we are just hanging in there with the equipment we own running 24/7 already, and we are trying to freight and move product out to offshore markets as quickly as possible.”

He said the new machine under consideration would cost more than $2m and would be able to spin about 10 times the volume of the current machine.

That could be operational within the next 12 months, so in the meantime to keep up with growth, Skene said the plan was to consolidate and focus on the current New Zealand, Australia, and United States markets.

Then the next phase of growth would be to set up new markets with the extra capacity on stream from next year.

“It does take time to set up new markets. It’s taking about 9 to 12 months for set up,” Skene said.

“Freighting times have doubled or tripled depending on the market – but not only in timeframes but also in cost as well – so we are having to factor in much longer lead times to get product to market.”

Skene said Asia, the Middle East and Europe, were in mind to expand sales of its zero alcohol range.



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