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Stormhoek and the Orbital Wines Collapse

By Andis Kaulins

In response to our previous posting on Stormhoek Wines and the administration (corporate bankruptcy) of their UK supplier, Orbital Wines, Peter May at the Pinotage Club blog has provided us with some essential information regarding Stormhoek as follows (posted with permission):

"Waitrose and Sainsburys no longer list Stormhoek because Stormhoek made a deal with Tesco's to sell the wine a pound cheaper. This is cited as one reason for Orbitals collapse.

Stormhoek has gained tremendous publicity and is watched and reported on in the marketing and wine trade press, has won numerous marketing and wine awards and the wine is very widely available in the UK.

Also, while a case has traditionally been 9 litre = 12 bottles, in the past decade since the use of 6 bottle packaging the meaning of the word 'case' is no longer certain with most retailers of wine using it to mean a box of 6.

I don't know the sales figures of Stormhoek, but not only was Stormhoek on the shelves of three of the largest UK supermarkets plus the nationwide high street chain Threshers but it is on the winelist of the Nandos restaurant chain. Plus premium Stormhoek labels were exclusively marketed through the on-trade. And the wine is distributed in the USA.

Stormhoek has a pretty big market penetration and they were complaining on the blog last year of the difficulty in sourcing enough bottles.

17% of all South African wine sold in the UK above £5/bottle is from the Stormhoek stable.

Bear in mind, it is not Stormhoek or its wine that has failed, but the marketing partner."

Full post as published by LawPundit on January 24, 2008 (boomark / email).