Indonesia will buy no wine before its time

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.