Looking Inward to Grow

Having read the case on Kingston Family Vineyards, I would like to propose an alternative growth strategy to the ones raised in the case. The quality of the Kingston Family grapes is founded on the sophisticated branding of their independent wine label — the success of each goes hand in hand. Thus, I believe it is of critical importance that the family continues to produce their wine label. As explained by Kosuge, the family could increase their production to 8000 cases per year without significantly increasing the cost of production by using their existing infrastructure. This increase in production is significant enough to make the Kingston winery profitable but also small enough to maintain the integrity of the premium brand and the high quality of the wine. Rather than focussing on exports however, I propose that the family focus on increasing their brand presence in the premium South American market.

As mentioned in the case, only 5% of the vineyard's sales being made in Chile. It seems to me that an enormous amount of the domestic market remains untapped and the potential to expand locally could be the logical next step. With their impressive reputation abroad as a premium Chilean wine producer, I believe the Kingston Family could do more to capitalise on their position as a domestic, home-grown vineyard. Not only would they profit from the increased margins of direct-to-consumer sales but they would also eliminate the costs associated with shipping and import taxes. An increased brand presence in Chile could have a flow-on-effect in other parts of South America where Chilean wine is popular, like Brazil.  

In order to increase their brand presence abroad, the Kingston Family vineyard should complement their renewed focus on the domestic wine market with a partnership with a well-regarded Latin American boutique hotel chain.  With a fairly nascent wine tourism industry in Chile, the Kingston family would be able to benefit from the first mover advantage and take advantage of the growing luxury wine tourism industry. While the capital investment for such a project would be significant, the long-term benefits of increased subscriptions, enhanced brand recognition and direct to consumer sales would outweigh these initial costs. By working with a reputable Latin American hospitality partner, Kingston Family Vineyards could potentially become a hotspot destination for international wine-lovers and local travellers alike.