Monday, August 24, 2009

PERSONAL FINANCE (Independent Newspapers), National 22 Aug 2009, By Bruce Cameron

I originally set out to write this column to mark National Women's Day two weeks ago. One reason I wrote this column was my intense irritation at a gold coin company that issued a media release saying it was minting another edition of its "Princess Di" coins to mark Women's Day. This was cheap exploitation of what should be a serious event, and was made worse by the fact that the coins are not a real investment. These "personality" coins are totally over-priced relative to their gold content. The other reason I wrote this column was to tell you about two impressive women whose paths I cross regularly because of my fascination with blends, both wine and investment. Many of the investments I have made have been blends and many of my favourite wines are blends. I simply do not have the depth of knowledge or the time to make decisions on how to blend assets correctly, let alone try to pick each security in each asset class. I am not prepared to take such risks with the bulk of my savings. Neither do I try to blend my own wines. Instead, I have tended to use balanced, or what the unit trust industry calls flexible, funds for most of my investments. I have relied on patience and saving over the long term to provide me with the results I want. This approach has served me well. I am not trying to argue that all blends, whether wine or investment, are good; some blends are excellent, some are drinkable and others cannot be used even as vinegar. One thing I have learned is that a good blend does not happen by chance or by trying to piggyback on the success of others. You have to know what you are doing. This brings me to Women's Day Two of the more remarkable blenders I have met are Anne Cabot-Alletzhauser, the chief investment officer of multi-manager Advantage (part of the FirstRand Group), and Norma Radcliffe of Warwick Wine Estate (on the R44 to SteUenbosch, off the Nl before Paarl). Both, in their way, are zealous about getting their blends right. Life with Camcron Bruce Cameron Anne has been at it for 29 years. Norma celebrated 25 years of winemaking this year. They entered their professions when these were male-dominated. To a lesser extent, this is still the case today. A while ago, I attended a briefing by Anne on her approach to multi-management. I was amazed at the extent to which she tests the ability of asset managers to add real value. Multi-management is simply another way of creating a balanced, or flexible, portfolio. But instead of a single asset management company blending the asset classes and selecting the underlying investments, the multi-manager decides on the asset mix required to achieve different results. The multi-manager then selects asset managers from different asset management companies to decide on the underlying investments. This approach is also known as best-of-breedr DIFFERENT TARGETS Another important element of blends is that they do not provide a one-size-fits-all solution. Good wine blenders have something in mind when they blend their wines. For example, Norma will tell you that her Trilogy blend goes best with veal, game and intensely flavoured stews, as well as bitter chocolate desserts. Likewise, most investment blends exist to achieve different targets, which may include reducing volatility risk (the propensity for an investment to swing widely in value) or earning a certain return - for example, three or four percent above inflation. Every time I have spoken to Anne or attended her briefings, I have learned something new - or rather, a lot new. I have also been to a number of wine tastings at Warwick, and was fortunate to be invited to a tasting to celebrate Norma's 25 years in the industry. Much of the focus at the tasting was Norma's taking us through her blends of the past quarter-century, starting with the 1984 Femme Bleu, through to the more well known Three Cape Ladies and the flagship Trilogy. Her son, Mike, recently bottled a special blend, First Lady, to recognise the contribution made by his mother. Norma can be compared to a single asset manager, as the grapes used for the various blends come from the Warwick vineyards. YEARS OF TESTING Apart from marking Women's Day (albeit a bit late) by mentioning these two remarkable people, there is a point I wish to make: getting it right consistently does not happen by chance. It means years of testing, both you and your product, ensuring that the basic ingredients are of the best quality and that the mix provides the right balance for what you want to achieve. It is for this reason that I am contemptuous of many so-called multi-managers, in particular most of the unit trust funds of funds (FoFs). The people who manage these funds simply do not have the time, dedication or expertise to manage them properly. Allow me to diverge. My brother-in-law owns the Occidental Bar at the Kimberley mine museum. Recently, someone attempted to sell him something called Pearly Bay. It was so dreadful that he added vinegar to some of it and gave the result to one or two of his customers as an experiment. They found the vinegar blend the better option. I tasted Pearly Bay without the vinegar and I can say it is quite the worst wine I have ever tasted. As you can have a Trilogy or a Pearly Bay, so you can have an Advantage portfolio or one of those dreadful bottom-of-every-thing, broker white-label fund of funds, where a financial adviser, in most cases without the necessary time or expertise, is doing the blending. i VINTAGE VERSUS PLONK Let me give you an example. Without first looking at the performance tables, I decided to select a unit trust sub-category that was important for long-term savings (namely, retirement), where the investment portfolios are a blend of asset classes and where investors are protected to some extent from high-risk bets by the prudential investment requirements of the Pension Funds Act. I chose the domestic asset allocation prudential medium equity funds over three years to the end of June 30, 2009. I found both vintage performance and vinegar. The best performer was the Prescient SA Balanced Quant-Plus Fund, with an average annual return of 11 percent - not bad in the current market. The vinegar was supplied by the Quantum Balanced FoF, with an average annual return of minus 1.32 percent. Incidentally, in second place, and the best-performing fund of funds, was the Umbono Core Managed FoF, with an average annual return of 9.51 percent. (Not bad under current market conditions.) This fund, which is in the Old Mutual stable, uses tracker, or passive, portfolios as its building blocks. So, in simple terms, the different asset classes provide the average performance of the market. The skill lies in blending the asset classes. I then took a closer look at the Quantum Balanced FoF. When I looked at the fund's fact sheet, I found that 36 percent of the fund is in two other funds Quantum manages: Quantum Core Income and Quantum Global Managed. And blow me down, I found that both these funds are also multi- managed funds. And the Global Fund is managed by RMB Asset Management, three of whose funds make up more than 20 percent of the portfolio. On its website", Quantum Investment Partners refers to itself as "master blenders". I would suggest they take a few lessons from a real investment master blender - Anne - or else the people who are placing their money in Quantum's hands will be resorting to Norma's blends. Finally, a note of warning: be very careful when an adviser suggests that you place your money in a white-label fund that operates under the licence of another unit trust management company, in particular if it is a fund of funds. (Quantum is not one of these and does have qualified people making its investment decisions.) Many white-label funds charge excessive fees and are operated by financial advisers who do not have the necessary expertise or time to do so properly.

* Cameron is the author of Retire Right (Zebra Press), which is now in its second edition.

Monday, August 17, 2009

Do Wine Blogs Impact Your Brand?

New Study Highlights Wine Blogger Activity

by By Liz Thach, Ph.D., SSU Wine Business Professor

Should wineries pay attention to what wine bloggers are writing? Do they really have an impact on a wine brand? According to a new study just completed by Sonoma State University Wine Business Institute, it appears that the answer is yes -- especially for wineries with less well-known brands or located in new and upcoming wine regions.

How Many Wine Blogs Are There Anyway?

In order to conduct the study, it was necessary to obtain a random sample, so we consulted the Complete List of Wine Blogs, compiled by Alder Yarrow at You may be amazed to know that in the last 5 years, the number of wine blogs has grown from 1 to over 700. Of these, more than 570 wine blogs are in English, with an additional 170+ wine blogs in other languages, including Italian, French, Catalan, Czech, German, Spanish, Dutch, Japanese, Chinese, Portuguese, Hungarian, Norwegian, and Indonesian.

Focusing on the English language wine blogs, we applied a decision rule of selecting a minimum of 10 blogs per alpha letter, and discarding those blogs that were not active. This resulted in a total sample of 222 blogs which were subjected to content analysis by 42 trained wine business students.

The 9 Major Categories of Wine Blogs

The first analysis included a thematic sorting of the blogs by major topic. This resulted in 9 categories as illustrated in the chart below. The most common type of blog is a Wine Review for which an individual blogger tastes and writes a review of the wine -- usually adding a rating from the standard 100, 20, or 5 point wine rating scales.

Blogs on Wine & Food with matching recipes, as well as information on restaurants was the 2nd largest category. This was followed by Wine Education where the blogger educates the reader on wine issues such as wine styles, varietals, how to taste wine and related topics. Blogs that focused specifically on Winemaking and Viticulture were placed in a separate category.

In addition, there were blogs that focused on Specific Wine Regions, such as a city, state, appellation or country. Some examples we found included Washington D.C., New Orleans, San Francisco, Paris, Seattle, Washington State, Oregon, California, and Britain. These blogs also emphasized wine shops and/or wineries available in these areas, as well as restaurants. A related category was Wine & Culture which focused on the association of wine with art, poetry, music, and literature.

Only 9% of the sample included Winery Blogs -- or those created by wineries to describe their wines and news at the winery. This illustrates an opportunity for more wineries to create their own blog. Other less frequent blog categories included Wine Business and Winemaking & Viticulture. The category of Other was created for those very unique blogs that didn't fit into major themes. Examples included "wine & hiking; wine & politics; wine under $20; and an emphasis on a specific grape, such as shiraz.

Numbers of Wine Brands and Ads on Blogs


Other analyses included counting and recording the number of wine brands and advertisements on the first page of each blog (we did not analyze older posts). Amazingly within the 222 wine blogs, 813 different wine brands were listed. These were sorted to determine which wine brands were cited most often. Interestingly only 3 brands were listed 4 or more times: Kendall-Jackson, Ridge and Penfolds. This analysis showed that many small unknown wine brands are described on blogs, as well as international brands from around the world.

Just under half of the sample (47%) included advertisements on the blog, for a total of 451 ads. These varied from simple ads provided by Google, to sophisticated winery, food, and wine product ads. It is important to note that the major way wine bloggers create revenue is through online ads, with professional bloggers able to make $20,000 - $30,000 per year in this fashion. Most wine bloggers have other jobs to supplement their online income. (Note: There have been some ethical discussions at the past two Wine Blogger's Conferences as to whether or not bloggers should accept ads from wine brands they review.)

Why Should Wineries Pay Attention to Bloggers?

There are several reasons that wineries need to pay attention to wine bloggers. The first is that the number of wine blogs is continuing to grow, and this provides an opportunity for wineries to have their brands featured on blogs. For wineries with a small public relations budget or those that can't get the attention of the larger media publications, this can be a positive alternative -- especially since some of the more popular wine blogs have thousands of followers and receive 30,000 to 40,000 hits per month.

Another reason is that we have entered a period of "democratization of media on the Internet." This means that anyone can easily establish a wine blog on the Internet using free blogging software (;;, etc.). Since there are no official guidelines regarding what can be published, the stories and reviews may be positive or negative. Likewise, bloggers have diverse backgrounds in that some have a high level of wine knowledge and experience, whereas others have none and just want to share their viewpoints on wine. Therefore, in terms of writing quality and level of sophistication of wine blogs, there is great variation. Because of this wineries need to monitor what is being said about their brands online.

How Can Wineries Work With Wine Bloggers?

The advent of wine blogs and other Wine 2.0 applications (social networking sites, online videos, podcasts, message boards, etc.) has created both more opportunities and more work for the public relations function within wineries. Because of the fact that your brand may be discussed online by anyone who happens to buy a bottle -- and that the story can easily be circulated around the globe in a matter of hours, it is important to pay attention: 
• Monitor your brand online to keep track of what people are saying about you. Most wineries have now utilized the Google Alert system, but there are others such as Twitter Search,, and which can provide more information.
• If you find a positive review or mention of your name, consider sending an email to thank the blogger for featuring you.
• If you find a negative review, contact the blogger and ask them for more information. Consider inviting them to visit your winery or a tasting you are hosting so they can learn more about you. DO NOT get in an "online flame war" with a blogger (which has happened in the past). 
• Identify several wine blogs you enjoy reading and keep track of them to see what topics are "hot" on the blogs. 
• If you are a new winery with a less well-known brand consider contacting the blogmaster of wine blogs which interest you. Invite them to visit or taste your wine. 
• If you are in a wine region that is less well-known, identify bloggers who write about your region and invite them to visit or taste your wine. 
• If you are considering starting your own winery blog, make sure to implement it in a professional manner. This means making sure to write new posts at least once a week, but preferably more often. It also means writing interesting stories about what is happening at the winery and other issues, rather than just trying to market your wine. Finally, it means monitoring and responding to the people who post on your blog.
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Wednesday, August 12, 2009

We present a wine marketing workshop

An all-new SecondBase workshop for wine people

Blogging can be a very powerful marketing tool - when done right. Same goes for mobile tools, which are generally fairly inexpensive but can take a degree from MIT and a few episodes of Heroes to muster up enough geek in you to understand, let alone develop yourself. We've therefore invited Adriaan Pienaar from WooThemes and Chris Rolfe from Mobilitrix to join us for an afternoon of 'how-to' in the winelands for our second SecondBase workshop entitled: SecondBase - The digital media 'how-to guide' for the South African wine industry [Part 1] Adriaan runs an extremely successful blog theme company and is an expert on designing, jump-starting and making blogs work. He knows the psychology behind what readers enjoy and how to produce something people are really going to want to become fans of. Chris is an expert in mobile marketing and runs a company that sells innovative mobile marketing products. We've asked him to come along, show us what they do, how they work and how they can drive your sales. We've used them before ourselves - so we know they rock. As part of the SecondBase workshop, which as you know is less talk and more touchy-feely, we'll let you push and poke and play with all the toys so that you leave not only with the info, but the know-how too.This workshop has been designed specifically for the wine industry, so for the first time we'll be hosting it at Mike Ratcliffe's Vilafonté wine cellar in Stellenbosch.As part of the afternoon, we'll also be using the occasion to arm you with some of our brand-new equipment courtesy of Nokia and show you a few exciting and practical uses of some of the tools in one of our legendary 'urban adventures'.

Jon Cherry from Cherryflava also has a hunch as to how Steve Jobs would market his South African wine farm and will share those 'unusual' insights with you.If you're thinking of lifting your marketing game and need a practical guide to the best digital tools and trends right now - then this is your event.

Tickets are rarer than 5-stars in Platter, only 45 available.
Price: R950 per ticket
Date: Tuesday 8 September 2009
Time: 12:00 pm - 5:30 pm
Venue: vilafonté wine cellar, Stellenbosch map:
To book your seat: E-mail Jon Cherry -
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