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It’s time to talk about collaborating around logistics

11 Aug 2017
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Kristina Georgiou is starting a discussion she thinks important for Australian wine producers to have.

Her new Wine Australia-funded Incubator Initiative project will look at the potential for smaller wineries to collaborate to reduce or share costs in the supply chain, particularly around cold chain logistics.

The driver for this research, which she will initially conduct in Western Australia, is a previous project she carried out at Bankwest Curtin Economics Centre that suggests many small producers are unlikely to fully exploit market and technological opportunities because of a perception that being small is an obstacle to greater success and the costs of innovation are beyond their reach.

‘That study looked more broadly at export opportunities for WA wine, but one of the clear messages we heard from those who weren’t exporting was that economies of scale were a real barrier,’ she said.

‘Quite a few said they’d be very interested in a collaboration or some sort of consortium that would make it easier to get wine from Australia to overseas, or even just interstate.’

Ms Georgiou is exploring collaboration opportunities with producers, wine associations and the providers of transport and other logistical services, to see what everyone can bring to the table.

She sees herself as an informed conduit to get people talking without individual companies having to start the conversation. ‘They are too busy making wine and running a business to be able to take a step back and explore the options,’ she said.

Ms Georgiou will be looking at lessons that could be learned from other industries and the possible barriers to collaborations that on the surface may seem a great idea.

The focus on cold chain logistics (the movement of temperature-sensitive products through various cycles of storage and distribution channels) is significant, as the need or desire to always keep things cool – and a cost – is a factor in whether services can be shared.

One possible outcome would be the development of an app that would allow individual producers to log their interest in a shipment or service being delivered at a certain time, providing for service on demand.

The project is in its infancy, but the initial response from wine companies has been very positive.

‘They can see the benefit of a collaboration and if it’s possible then they would be open to looking at it. There’s always a bit of hesitancy, a fear of the unknown or of working with competitors, but I get the feeling the sector has got to the point where they are competitors but there’s also a collegiality.’

Ms Georgiou is a lecturer and researcher in the Curtin Graduate School of Business and teaches at several private colleges in Perth. She carried out the recent wine export project with Curtin’s Associate Professor Jeremy Galbreath, who has been involved with a number of wine sector projects, most notably around climate change.

Her introduction to the sector came three years ago, however, when she talked with several wineries as part of a project investigating if and how small primary producers plan their marketing activities.

‘We found that while many didn’t have a marketing plan or clear strategies all of them were making what are marketing decisions – some doing it better than others. We were trying to work out if they have a market focus and were making decisions based on what customers want? Marketing theory shows that if you have that kind of focus you are more likely to meet your business goals.’

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This content is restricted to wine exporters and levy-payers. Some reports are available for purchase to non-levy payers/exporters.