Indonesia will buy no wine before its time

By David Zweifler

JAKARTA (JP): California wine makers are adopting a contrary approach to wine making. To many, this would seem a bad time to get involved with the Indonesian wine market. Others would say that there never was a good time to get involved with the Indonesian wine market. So why, last Friday and Saturday, were Eric P. Wente and James Fetzer hosting a promotional event here in Jakarta?

They're banking on the future. "We believe in getting in on the ground floor and investing from the beginning. It's good to get in first and it's good to do your homework," Fetzer explained.

Eric P. Wente and James Fetzer are two well known California wine businessmen. Anyone from the United States who's ever gone into a store to buy wine knows their product. At this press conference, however, I was the only American and I was also the only one who had heard their names before.

It's not surprising that the two gentlemen are unknowns here. Wine is a rarity in the marketplace and almost unknown outside of the expatriate community. It was very difficult to buy wine here up until five years ago and, I'm told, shipments were usually so mishandled that the wine was often undrinkable.

Now, wine is widely available to the expatriate community through wine societies and duty free shops. The people who buy from these sources already know their wines and consume it on a regular basis.

Although the number of Indonesian wine consumers is still quite small, this may change in the next five to 10 years.

Challenges

The obstacles that California wine makers face in the Indonesian market are considerable. The hot climate which is seemingly antithetical to alcohol consumption, the absence of a wine making/drinking tradition and the Islamic bias against intoxicants make this an extremely difficult market to penetrate.

Also, there are recent political hurtles, such as the new duties on all foreign alcoholic beverages, which have raised the price of wine served in restaurants and hotels, and the current joint military-police operation to take all alcohol off the streets.

Fetzer and Wente are taking a long term approach to these problems, trying to seduce a market that probably doesn't know their product and, if it does, might dislike it out of hand. This was reflected in their promotional strategy, which concentrated more on reaching expatriate wine-drinkers and hotel and restaurant owners who were buying for their clientele.

"Right now we're trying to reach new customers through word of mouth. Hopefully, Indonesians will go to a restaurant or a friend's house, taste a wine that they like and then want to have it in their home," Alan K. Portney, Vice President of the International Division of Fetzer vineyards explained.

This scenario, where more experienced wine consumers expose their friends to the joys of the wine, is a slow moving process. To help speed up this approach, the California wine makers are concentrating on having local retailers stock less expensive, "novice" wines, which are better selections for the new wine drinker.

"We market certain types of wine at the beginning so they acquire a taste for it more easily," Fetzer said, referring to the sweeter, more fruity Chardonnay varieties, as opposed to the heavier Cabernet Sauvingon and Cabernet Merlot.

Competition

It might seem that the Californians would be hamstrung by competition from the French and the Australians. The French have the advantage of their world-wide reputation. The Australians, situated in Indonesia's back yard, have a natural geographical advantage.

However, it turns out there is already a history of cooperation between wine producers.

"At the production level, there is a very strong community of wine makers. The French go to California, the Californians go to Australia. Everyone has a very open and honest dialog and a very good relationship on the production level," Fetzer explained.

He added that this exchange of information is leading to a homogenization of the market, where the reputation of a particular brand of wine will become more important than the reputation of its country of origin.

In terms of value, the quality of the wine set against its price, freight rates are currently on their way down due to improved technology and larger shipments, so the geographical advantage of Australia is probably going to be less and less important in the coming years.

However, competition between wine makers is not a major concern for the moment. Right now, the market is so small that what's good for the French is good for the Australians and the Americans as well. By the same token, all the wine makers in this market must work together to educate the Indonesian public and create a demand where there was none before.

Vinegar?

For now, the main concern of all wine makers is education and exposure.

The task in Indonesia is slightly different than it is in the U.S.: There people view wine as a beverage to be consumed only on special occasions. Therefore, marketers are trying to get the public to serve wine with more mundane foods, to accentuate their taste and liven up an everyday meal.

Here, it's less a matter of getting Indonesians to "try wine with pot roast," as getting them to try wine at all.

It is difficult to tell at this point whether California wine will ever be a beverage that is popular outside of the expatriate community here in Indonesia. Certainly, it will not be sold in local supermarkets, or served at state dinners, any time in the near future. However, it is not completely out of the hands of the Indonesian public; wine is creeping onto the menus of many fine restaurants and into hotel dining rooms throughout the capital.

It is going to be some time before the Californians know if their promotion volley was a success. Like an amateur collector who is keeping his stock in the cellar to age, they will have to wait and see if they have a bottle of fine wine, or some very expensive vinegar.