Branding and the Cyprus wine industry

Abstract

A traditional industry confronting market change is examined here, for the wine industry is important to the economy of Cyprus. Cyprus had to reinvent itself as a wine producer after receiving a double blow: losing its main product, sherry, as a result of nomenclature protection by the European Union and the loss of its largest market after the fall of communism. The objective here is to examine the product (wine) and how it may be improved and upgraded for a more sophisticated market. Product quality and branding then immediately rise to the fore but to ensure that all the issues are being properly addressed, soundings were taken from local, Greek and international wine professionals as well as local consumers. There are 52 wineries in Cyprus but the industry is controlled by four main companies and tied mainly to a local grape variety, Mavro. The grapes are grown by people independent of the wineries and this has been a long-standing issue—affecting wine quality—as has the distance between where the grapes are grown and the wineries themselves. The methodology involved focus groups, depth interviews and an e-mail survey. Respondents were local consumers and wine experts who fell into three groups: local Cypriot, Greek and International. The findings reveal an industry that is still growing, but fragmented and dominated by the big four Cyprus wineries—KEO, ETKO, SODAP and LOEL, formulating the Cyprus Wine Producers’ Association (ΣOK—Συ´νδɛσμος Oινοπαραγωγω´ν Kυπρου), that possess 75.5 per cent of the market. Way below is the market share of imported wines (16 per cent) and small local wineries (8.5 per cent) that fall under the umbrella of the Bacchus Association (Bacchus is equated with Dionysus, the god of wine in Greek mythology). There is also great secrecy and unwillingness on behalf of local wineries to work together, which serves to perpetuate existing weaknesses and work against attempts to develop branding associations. The inescapable conclusion is that necessary change will require the adoption of branding that in turn will require greater investment in the product and then its promotion and labelling.