Can you be small and succeed in exporting? To answer this question, Carole Maurel* and Foued Cheriet**, two management researchers, looked at the case of ten French wine in the wine industry. Perceptions of failure and success, international trajectories and export strategies, can small size be an asset on the international market? A study published in 2020 in the journal Management International.

Small whites, vintage reds or organic rosés, wine remains the best ambassador of France abroad. Second in exports after aeronautics and before perfumes, one bottle in ten on the international market is stamped "made in France". In the wine industry today there is no longer any choice, you have to export," explains Carole Maurel, a specialist in international finance, " and on the world market competition has become more intense. The cards have beenreshuffled and French exporters can no longer count on a natural leadership position and on the image of France.

Failure and success

If France, Italy and Spain remain the traditional and historic wine makers, American, Australian, South African or Chilean productions are flowing and their strategies are not ours, as Foued Cheriet, a specialist in agri-food strategies, points out: "In France, we do not have powerful brands and the market is very fragmented with many small companies that have to face up to the giants of the sector. French wine is structured around its AOCs, its terroirs, its geography, in short its small producers. To understand how this large category of SMEs reacts to exports, Carole Maurel and Foued Cheriet surveyed ten wine SMEs with very different profiles.

The first observation is that they all have very different perceptions of failure and success. In most cases, success is defined by the fact of remaining on a market, achieving satisfactory sales or accessing new markets," explains Foued Cheriet. Sometimes it is enough for an intermediary 10,000 kilometres away to appreciate the product independently of sales to speak of success. More rarely will it be measured by a numerical objective. Failure is also perceived in a very subjective way, ranging from the definitive exit from a foreign market to simple "dissatisfaction on the part of an intermediary or a long-standing customer, which shows the importance, for these small producers, of the customer relationship", adds Carole Maurel.

Three strategic profiles

The same heterogeneity will be found in the different strategies put in place by the SMEs. More or less worked out or intuitive, they also depend on the trajectories that led to the decision to export. " Very often it is an opportunity, such as a meeting at a trade fair or a visit to a domain that goes well, and which decides the SME to launch into exporting more than a real programmed development approach" continues the researcher. The survey has thus highlighted three strategic profiles - not exclusive - of small wine exporters.

The first profile, known as "partnership", will exploit the links and relationships it has had for a long time with clients or intermediaries. The second is based on communication. He will exploit his size as an asset by promoting the image of the small producer from the south of France, close to the land, his local roots," explains Foued Cheriet. Consumers are very sensitive to the history of the winegrower and his business and this card is not played enough in the export market. The last strategy is based on human resources: recruiting personnel dedicated to internationalisation projects or using support structures. "It is rarer and less prepared and it is a concern for small exporters who will more often ask their sales staff to adapt.

Asset or handicap?

So, in the end, is the small size of French wine exporters an asset or a handicap? " If we look at the literature, small size is still a handicap because exporting involves more risks for small companies and the lack of preparation is the biggest factor of failure" concludes Foued Cheriet. Difficulty in blocking cash flow or financing dedicated personnel, poor analysis of target markets or lack of adaptation of products to the markets concerned, the French sector is indeed distinguished by a certain passivity in terms of marketing and commercial follow-up.

However, the results obtained show the potential to be exploited, insists Carole Maurel: "Size is a resource and French producers can still make a lot of progress on the storytelling specific to their company and to the wine tradition of our country, which are real strengths on the international market. This is something that small producers can do more easily than large ones. How the wine industry will be able to adapt to the storms ahead remains to be seen. " Between the Brexit, the Trump tax and covid, it's a real firework display," the two researchers lament. It's enough to turn the wine market... sour.

*Montpellier Management Research (UM - University of Perpignan Via
Domitia, Montpellier Business School)
**MOISA (Montpellier SupAgro - CIRAD - INRAE - CIHEAM-IAM Montpellier)
Cheriet F., Maurel C., (2020), " Etre petit et réussir à l'international : Etude de 10 cas d'entreprises
vitivinicoles françaises ", Revue Management International, vol 24, N° 6, p.114-126.