What are the chances for German wine producers in the U.S. market? Attorney Hans J. Niebergall, management consultant in the German, American and European wine industry and vice president of the German-American Chamber of Commerce, San Francisco, answered questions posed by Frank Schulz of the Deutsches Weininstitut (DWI), Mainz.
DWI: How do you size up recent sales declines due to the financial crisis?
Niebergall: I think these are only temporary blips. People will continue to enjoy wine and quality will prevail.
DWI: How can German wine-growers and bottlers successfully position their wines in the USA?
Niebergall: Certainly not on their own inititative. America is a large country with some 300 million inhabitants. It is completely impossible, regardless of industry, to be successful in the USA without accessing the help of a marketing organization. That is the first step. Many years ago, I set up a food and beverage import company in the USA. In cooperation with the German Wine Institute, I conducted a series of wine tastings and presentations at the German Consulate in San Francisco. Such events can only be successfully organized by working in conjunction with one another. Because the USA has developed into the number one import country for wine, central or national sales promotional efforts should be greatly stepped up there.
DWI: In other words, you feel sales promotion via joint marketing is still relevant?
Niebergall: Absolutely. “United we stand. Divided we fall.” Global wine competition has considerably increased. China and India will become producers that add pressure to the market. The costs of marketing and distribution can no longer be financed by an individual producer. I represent and advise some of the world’s largest wine producers, and I see their costs. Even the largest producers, as well as national organizations, have hardly come up with a global marketing strategy to date. Successfully getting this in place would save unimaginable sums of money. In this respect, the German Wine Institute has done excellent groundwork – every contributor to the DWI who wishes to have an international presence should take advantage of this.
DWI: How long have you observed the market success of German wines in the USA?
Niebergall: I’ve been professionally involved with German wines in the USA since 1987. In the mid-60s I was an exchange student for a year in the USA. Back then, it was a great treat to drink German wines from the Rhine or Mosel. After the Cold War, soldiers returning home to the USA used their duty-free alcoholic beverage allowance for German wines. Once back home, they wanted to continue to drink German wines. Slowly but surely, a market developed for our wines.
DWI: From your point of view, what has changed since then?
Niebergall: Due to labeling laws in America and in Germany, it was very difficult to successfully market German wines in the USA at that time, not least because Americans were not very familiar with wines from Germany’s wine-growing regions. Labels were colorful and attractive but incomprehensible. Synonymous with German wines were well-known names, such as “Zeller Schwarze Katz,” “Kröver Nacktarsch,” and “Blue Nun.” It was a time when “jug wines” from Mondavi and Gallo were popular. In restaurants, “all you can eat for $5.00, including free wine” was the motto of the day.
DWI: And since then?
Niebergall: The low-price segment is long gone. Compared with Germany, the price of wines in the USA – in retail outlets and in restaurants – is rather expensive. It’s not seldom that a glass of wine in San Francisco costs $12.00. Many Americans wish to have a small cellar stock of wines. Wealthy Americans purchase either horses or wine estates. German wines, particularly Rieslings, have experienced a boom in recent years. It will continue, because those between 21 and 30 years old drink more imported wines and are quite interested in wine.
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