Murray Reid, Chairman of the Onkaparinga Exporters' Club since November 2005 recalled some of his memories while attending the Club's wine cluster meetings a couple of years before himself got involved with the wine industry: "I remember wineries coming to these meetings and sharing their problems and difficulties in selling wine overseas." At that stage, Murray was the Export Manager of the Antenna Division of Hills Industries a South Australian company established in 1946 that currently operates businesses in three industry segments: Home, Hardware and Eco Products; Electronic Security and Entertainment Products; Building and Industrial Products with activities in numerous countries around the world.


 

In 2007, Murray retired from his senior executive position at Hills and the initiative to start an export consulting business to the wine industry seemed a logical move, given his network with the wine industry acquired through his involvement with the Exporters' Club.

Soon after, in a social event Murray met Chris Didden, an American businessman who was passionate about Australian wines. After an informal conversation they talked about the possibility of working together in exporting wine from South Australia to the US.

Bearing in mind the horrible experiences that other Exporters' Club wine members experienced while doing business in the US, Murray and Chris developed a plan to work together, which at its first stage consisted of:

·         Select wines exclusively from small boutique wineries located in or around the McLaren Vale area, creating a specific identity for their company in the US market.

·         Get the wineries to trust in the project. In order to achieve that, Chris paid for all the wine samples tasted on the selection process, which is an unheard fact within the wine industry.

·         Select and classify the wines more likely to be successful in the US based on quality per price and not the other way around, which is a common policy amongst other US importers.

After accomplishing this first plan's stage, tasting the equivalent to US$ 15,000 in wine samples and identifying opportunities for the McLaren Vale's wines in the US market; Chris established 2Fly Wines, hired Murray as his Managing Director and imported his first container featuring premium wines of 6 different wineries.

For its first year of operations 2Fly aimed to import 2 to 3 containers but ended up with 10, more than three times the initial projection. Such unexpected success demanded substantial operational changes; Chris who was the only employee at 2Fly's early stages currently employs a team of over 10 people and imports wines from 20 different SA wineries. All this happened in less than 2 years.

The reasons for such a success are various:

  • 2Fly identified a niche of "value per price wines" in the US market. As background information, the McLaren Vale's wineries have the average most expensive FOB prices per litre in Australia (check referencing with AWBC) but according to Chris the region "has some of the best quality wines with the best value on the planet".

·         2Fly knew how to capitalise over the identified niche market and targeted specific venues in which these "quality per value" wines could be fully appreciated and commercialised.

·         2Fly recruited a team of wine enthusiasts as salespeople. People who can use each peculiarity of each imported wine to create rapport with restaurateurs and wine shop owners in order "not to sell but share their wines".

·         Have someone as Murray to be "his eyes and ears in Australia", given his wine network acquired through the Exporters' Club and export knowledge.

In May of 2010 Nancy Thompson from Hartford Magazine, a monthly Connecticut lifestyle magazine published an article about 2Fly. The article features 2Fly1s trajectory so far, several testimonials of wineries currently doing business with Chris and their plans to expand their activities to other US states.

The case take-a ways are:

- Theoretical and practical export knowledge could be well applied to a business strategy regardless of its original industry background. Murray came from an electronic area to find success with the wine industry. How more different these two areas could be?

-  The Exporters' Club proved to be a fantastic venue to network and learn about international wine marketplaces. If Murray was not an Exporters' Club member he probably would have not identified the business opportunity when it emerged on his informal meeting with Chris.

- Passion, planning and strategy actions are drivers of all successful business cases regardless of time, market or industry. The case proves this theory once again.