Canada's Wineries Seek International Niche

Despite limited production, government and industry desire expanded export market

by Peter Mitham
Canadian Winery
Dan Zepponi
Westbank, B.C. -- Doing more with little is the objective of a new Canadian wine marketing initiative that the industry hopes to debut in Chicago later this year. Canada exports 2.8 million liters (about 740,000 gallons) of wine per year, but shipments are hampered by limited domestic production capacity. Most of the wine Canada exports is ice wine, which accounts for approximately half of the wines exported by Ontario--the country's major wine-exporting region.

That could change as a national strategy designed to showcase the country's high-quality table wines takes shape in the coming months. The National Wine Export Strategy Working Group is the brainchild of Canada's Department of Foreign Affairs and International Trade (DFAIT), Dan Zepponi of Mission Hill Family Estate in Westbank, British Columbia, and six other wineries that have joined the initiative.

Zepponi became president of Mission Hill in July 2007, and began investigating ways Okanagan wine producers could band together to export wines efficiently and effectively. "We're such a small region, that we need to get a few of the wine producers in the Okanagan together and try to get some critical mass so we can go out and represent Canadian wines," he explained to Wines & Vines.

Zepponi's idea was to develop a wine club that would put wines from the Okanagan's best wineries into key markets. Select restaurants and purchasers would showcase the wines to consumers, who could then place orders for the wines.

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But then he met Janet Dorozynski, a trade commissioner responsible for wine with DFAIT's International Business Opportunities Centre, who was also working on market development. "It just dovetailed perfectly," Zepponi said.

Dorozynski convened a meeting of wineries in November 2007 to discuss the development of a wine export strategy that would bring together producers from Ontario and British Columbia, Canada's two largest wine-producing regions. The Canadian Vintners' Association, the B.C. Wine Institute and the Wine Council of Ontario now belong to the group, along with seven wineries.

"We need to have a long-term strategy and plan in order for it to be competitive," Dorozynski said. "There's never been an initiative like this where we've had producers from B.C. and Ontario working together as closely as they are now."

Zepponi, a former senior vice-president with Fosters Wine Estates (Americas) responsible for managing the company's continental operations, said that Canada's minuscule production demands a special export strategy.

The country's wineries can compete on quality, but most wineries have hardly enough to export. All of Canada, he noted, produces less than a third of what Fosters Wine Estates (Americas) does in a given year. The key is moving some of that production into foreign markets effectively, despite the lack of supply.

"It's not about moving a lot of tonnage, being a low-cost leader," Zepponi said. "It's about going to the specific markets with gatekeepers that recognize Canada as a serious wine region, but it's small, it's unique and distinctive."

He believes one advantage Canada has is that its cool-climate wine producing regions are turning out wines that meet U.S. consumer palates.

"We make those food-friendly, lean, crisp, clean wines, and that is where the American palate's going," he said. "We don't have to try to be France or try to be California or try to be Australia; we just do what we do best and it's naturally aligning with where the taste of the consuming palate is."

The National Wine Export Strategy Working Group holds its third meeting in Ontario on July 22, where it will continue discussions of models for its export strategy, as well as a pilot event planned for Chicago this fall. Dorozynski said the group hopes to have a three-year work plan in place by November 2008.
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