Sandlands Vineyard Case analysis
Introduction
Tegan Passalacqua is a successful, young, and Californian winemaker that concentrates in producing wine from vines that are at least sixty and up to a hundred years old. Tegan is one of the leaders in winemaking industry at Turley wine cellars which is the prominent Zinfandel producer. Moreover, Tegan uses his free time to run the cellar called Sandlands, which yields premium wines using grape selections such as Carignane, Mataro, and Chenin Blanc. Sandilands business has been thriving ever since Tegan and the wife started operating it.
External analysis of the Sandlands Vineyard.
Political influence
The UN federal and the state government has been highly taxing the wine products in the previous years. The action has led to the closure of many winemaking firms due to the high taxes and restrictions that were being imposed on them. Moreover, some of the federal states required private investors in the winemaking to make use of the three-tier distribution system which the producers did not want to use the retailers. However, Tegan came up with his idea of starting the firm after the withdrawal of some firms and a decline in competition. Also, the Supreme Court had ruled out that the wine producers to be selling their products directly to consumers gave the Sandlands Company a good start and hope for its growth.
Economic factors.
Old vines had significantly lower yields of about two tonnes per acre, the cost of production of the wine vines was considerably high especially to grow and harvest because most of the farms were not modernized. Due to the lower profits from the old vines, farmers were then shifting from increasing the grapes to growing other varieties such as Chardonnay and cabernet sauvignon. The action made many of the firms specializing in old winemaking to experience a decline in the number of old vine vineyards and fewer old vines within the vineyards that were cut down and died. However, Tegan Passalacqua opted to rent pieces of vineyards so that he could grow old vines that would be used in his Sandlands firm. Therefore, Tegan having the raw materials required to operate his firm and sell his products on time and have enough time to distribute the commodities to the clients whenever he received an order.
Social factors
The moment Tegan started operating his firm, he made sure that he visited the farmers and created good relations with them. Additionally, Tegan could work with small, old vine vineyards of which big firms in the state did not want to deal with because of less quantity of the grapes that came out of the farms. Thus, Tegan started to buy the grapes from the growers because of the relationship he had created with the farmers over the years. Tegan together with the farmers developed a connection in the winemaking processes in that the growers did know and trusted him.
Furthermore, Tegan had studied in the sacrament state university as public health; this facilitated to the growth of his firm due to the acquisition of the skills necessary in the process. Tegan also did a course dealing with growing grapes and making wine that landed him a job at the Turley wine cellars. This gave him more experience that made it possible for him to start his firm starting his firm. Another social-cultural factor is the fact that Tegan could produce wines that could be used with other products and meals and also the fact that the wine came in natural form from cultivation to processing and that the society had accepted the product as healthy.
Technology
Given the fact that most of the winemaking firms at the time had not modernized to new approaches of winemaking, it made it difficult for the firms to produce varieties of wine in large quantities. Therefore, Tegan Passalacqua saw it necessary to start his firm that will incorporate new technology from farming to the production and also to the marketing of his products. Tegan Passalacqua engaged in new traditions of farming that involved the use of different grapes which were the forgotten old vines and different farming methods that assimilated the use of own-rooted, dry farmed, and head trained vines grown organically.
Nevertheless, the farmers used to produce their vines using the grafted, irrigated and trellised vines that used to be grown with pesticides. This however facilitated in the reduction of the grapes thus the wine quality and that made the Sandlands Company have a credit of producing the best wine. Nevertheless, Tegan Passalacqua got too involved with the growers and thus created a excellent affiliation with them. Tegan also encouraged growers to apply suitable methods of vine cultivation to obtain the best quality wines from their products. Concerning distribution, Tegan Passalacqua would post his products to the vine spring app and others so that he could markets and distribute the wine in a manner that he could never have done some several years before.
Environmental factors.
Sandland’s firm along with other firms suffers from the marketing expenses in that director sells twenty-five percent of his products to the distributors at fifty percent discount which makes it hard for Tegan to bear with the losses. However, Tegan found it necessary to sell the wine to the retailers because they had connections to some influential people in the market such as the wine buyers and the customers, and by doing so, it influenced the growth of Sandland’s business. However, the fact that the old vines had the unique adaptability to climate changes and the terroir made it possible for the Sandlands to have a continuous flow of the raw materials for production. The old vines had deeper roots that extended into new and unique soul elements and that they could be grown without irrigation.
Internal analysis.
Passalacqua made wines from places that were not known and sold them at affordable prices to as low as twenty-eight dollars for a bottle of wine. He made varieties of wines with different unique tastes and that had that had a more balanced flavor than that of other firms. Moreover, the customers appreciated the wine especially the taste which was consistent for all the Sandlands products because of the less concentration of the characters. Passalacqua and his colleagues were producing old vine wines that reflected the terroir more than the process as compared to other firms.
Tegan also made some of the unique wines that no other firm had made that comprised of different grapes from different vineyards. Such wines included the Carignane, trousseau and chenin black. The customers highly accepted the products in the market. Moreover, not many firms are making the wines from the old vine from the vineyards. Correspondingly, Tegan uses handshake instead of long-term contracts while working with the growers because they were against them. The product label was also uniquely made to attract more customers and for easy identifiability and also evoke mythical California. The name created a more traditional label that could have worked in the past and would work well in the future.
Moreover, Tegan made a half capsule which gave unusual and anachronistic touch that contrasted with the more commonly used full-sized capsules to enhance the attractiveness of the wine. Sandland’s products cost is as low as twenty-four dollars less compared to the other firm’s wines. The low cost facilitated the firm to make more sales as compared to other firms
Consequently, the firm was selling a bottle of wine for $20 and $240 per nine litter’s case. The firm’s annual sales for the year 2016 totaled to $7990, which signified an increase of 4.3% from the previous year. However, most of the luxury wines were considerably bought by consumers when the prices were as low as $50 as compared to when the prices were $1000 as only 12% could buy at that price.
Conversely, the production of the big wines had increased by 33%. Similarly, the number of wineries in California increased from 3579 to 4202 from the year 2013 to 2017 respectively. Sandilands emerged to be the best-rated firm of 2015 Carignane wine with average points of 90 and the highest price of a single bottle of wine going for $79.
Recommendations
- Corporate strategy
- Growth.
Sandlands should consider merging its services with many other winery producing firms to reduce the costs related to sales and also the distribution of the final commodities. Moreover, Tegan should also find financial aid and increase the size of the farms that he grows the vines to ensure an adequate supply of the raw materials in the future. Tegan should also consider purchasing the eastside meats building which will offer an excellent opportunity for growth of the winery business and be able to serve many customers in the future.
- Stability
Sandlands should develop and increase its services delivery and production from one location to other states. Similarly, Sandlands management should come up with unique products that are widely accepted by the customers all over and also sustain its operation and maintain its market share by ensuring that the retailers and wholesalers deliver the firms products to the customers at the required time.
- Business level strategy
Sandlands should consider making different types of wines that are unique and with different flavors from the old vines as compared to other wine producers. Moreover, the firm should also supply the wines to the customers at the lowest price as compared to its rivalries.
- Acquisition
The Sandlands winery should in future consider merging its production services with Kirschenmann vineyard and operating together in making the best wines from the old vines and also sharing the costs.
Main elements of the execution plan
Scope definition which entails what sandlands intends to achieve in future. Some of the intents include buying of the eastside meats building and expanding on the business by building a winery.
Statement goals of Tegan are to operate his firm on his own by controlling the entire winemaking process. Also, Tegan has objectives of producing five thousand cases of wine a year now that Tegan bought a vineyard.
Quality and technical specifications by adopting the modern ways to increase the speed of operations in the production line and ensuring that the quality of sandlands wine meets the stands. In distribution, Tegan incorporates the use of social media platforms in providing that the clients get to know of the forms products.
The allocation of resources. Tegan hopes to get some financial aid from the banks so that he can be able to meet his business goals.
Project scheduling. Tegan has been preparing farmers to grow his old vines so that the can use their products when the firm intends to operate fully. He provides the growers with surety that their products will have a ready market from his firm. Therefore, by having the raw materials on time then the production will commence on time thus the delivery of the wines will be timely.