Bottling France

Is it possible to be small and still succeed in export? To answer this question, Carole Maurel* and Foued Cheriet**, two management researchers, examined the case of ten French in the French 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.

Whether small whites, vintage reds or organic rosés, wine remains France's best ambassador abroad. The second largest export after aeronautics and ahead of perfumes, one bottle in ten on the international market is stamped "made in France". In today's wine industry, there's no choice but to export," explains Carole Maurel, a specialist in international finance, " and on the world market, competition has intensified. The cards have beenreshuffled, and French exporters can no longer rely on a natural leadership position and the image of France."

Failure and success

While France, Italy and Spain remain the traditional and historic wine makers, American, Australian, South African and Chilean production is flowing like water, and their strategies are not the same as ours, as Foued Cheriet, a specialist in agri-food strategies, points out: "In France, we don't have any powerful brands, and the market is very fragmented, with many small companies having to compete with 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 export, Carole Maurel and Foued Cheriet surveyed ten wine-producing SMEs with very heterogeneous profiles.

The first observation is that they all have very different perceptions of failure and success. In most cases, success is defined by staying in a market, achieving satisfactory sales or gaining access to new markets," explains Foued Cheriet. Sometimes it's enough for an intermediary 10,000 kilometers away to appreciate the product independently of sales to speak of success. More rarely, it will be measured against a quantified 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 is found in the different strategies implemented by SMEs. More or less sophisticated or intuitive, they also depend on the path that led to the decision to export. " Quite often, it's an opportunity, such as a meeting at a trade show or a visit to an estate, which goes well, and decides the SME to take the plunge into exporting, rather than a genuine programmed development approach", continues the researcher. The survey revealed three strategic profiles - not exclusive - of small wine exporters.

The first profile, known as "partnership", will capitalize on long-standing links and relationships with customers 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 terroir, his local roots", explains Foued Cheriet. Consumers are very sensitive to the history of the winegrower and his company, and this card is not played enough in the export market. The final strategy relies on human resources: recruiting staff dedicated to internationalization projects or using support structures. "This is rarer and less well-prepared, and is a concern for small exporters, who are more likely to ask their sales staff to adapt.

Asset or handicap?

So, in the final analysis, 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 greater risks for small companies, and lack of preparation is the biggest factor in failure," concludes Foued Cheriet. Difficulty in securing cash flow or financing dedicated staff, poor analysis of target markets or lack of product adaptation to the markets concerned, the French industry stands out for a certain passivity in terms of marketing and sales follow-up.

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

*Montpellier Research en Management (UM - Université de 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.