Competitive pressures and strategic repositioning in the California premium wine industry

Abstract

Purpose The purpose of this paper is to examine the changing competitive landscape in the wine industry, focusing upon how premium Napa valley producers are responding to such changes. Design/methodology/approach The in depth interview technique with 11 privately owned premium wine producers was used, with interviews conducted in early 2005. Findings Wineries identify the growing concentration and consolidation amongst distributors and domestic US producers; increased foreign competition, particularly from Australia; and the trend towards homogenised taste following the increased power of numerical wine ranking surveys as principal concerns that they face. Practical implications The findings highlight the dilemmas faced by wineries as they attempt to stress their locational advantage for reputation building but endeavour to differentiate their product from other wineries in Napa. Originality/value As a pilot project the paper indicates how even firms in high value added product markets are facing heightened competition and what they fear might emerge in the near future from foreign producers.