The Port of Baltimore has lost a wine deal to the Port of Norfolk in Virginia because the South Africa's Orange River Wine Cellars encountered snags with its American distributor.
The first shipment of nearly 1,300 cases of Chardonnay, Shiraz, Cabernet, Rose and Chenin Blanc will hit stores in Maryland and 11 other states in September, about one year later than anticipated.
After a deal with its original distributor, the Henry Wine Group fell through, Orange River chose Virginia distributor, the Country Vintner Inc. Unlike the Henry Wine Group, the Country Vintner does not have an office in Maryland and typically uses the Port of Norfolk for its wine shipments.
Going through the Port of Baltimore would take more time and money than Norfolk for the Country Vintner Inc., said Gene Edwards, logistics manager for the Oilville-based distributor. Country Vintner's distribution center is located in Louisa, Va., just two hours from Norfolk. For the ships that come from South Africa, Norfolk is a more direct and efficient route, Edwards said.
Quantifying the deal lost by the Port of Baltimore is difficult because officials at Orange River could not say how many more wines of their River's Tale brand they plan to ship after the first container. The first container alone is only worth roughly $50,000, logistics experts say.
But the deal could have been a high-profile one for Baltimore's port as South Africa's biggest winery -- which already has big export markets in Europe and Asia -- increases its presence in the U.S. market.
"We believe that River's Tale will be so successful in the U.S.A. market that more and more containers will follow soon," said Orange River's Koos Visser in an e-mail sent from South Africa.
"This would be South Africa's first high quality value brand" wine, said Kevin Atticks, executive director of the Maryland Wineries Association. He also has consulted on behalf of South African wineries. Unlike Australia's ubiquitous Yellow Tail brand, South Africa has no popular inexpensive wine, he said. Orange River will retail for about $7.99.
"We would have loved to have had the business," said Richard Scher, a Port of Baltimore spokesman. "We're always looking for additional cargo." But the port already has a good wine business, having brought in 30,000 tons of wine last year.
Orange River had originally selected the Henry Wine Group, based in Benicia, Calif., to distribute the wines and have them shipped through the Port of Baltimore. Henry Wine Group has offices in D.C. and five states, including Maryland, where its East Coast offices are based in Jessup.
"We visited the Henry Wine Group twice, sent hundreds of e-mails to set up everything," Visser said. "The promotion campaign for the launch was well planned. And then suddenly we receive an e-mail, only one sentence, telling us that they will not go ahead with River's Tale."
Henry Wine decided to focus on its primary brands, including its Spanish and Italian portfolio, where officials saw greater opportunity, said Kent Fitzgerald, vice president of national brand development for Henry Wine.
Henry Wine initiated conversations with Orange River executives, but never had any formal deal with them, Fitzgerald said. "We look at new brands all the time," he said. "There are very few that get into the books."
Last fall, GKV Communications of Baltimore displayed billboards along interstates 95 and 295 and took out four-page inserts in half a dozen trade publications, including Wine Spectator to promote the wine brand called River's Tale. The change of plans delayed promotions planned by GKV.
Executives at Orange River have already spent $500,000 to promote the wine, Visser said.
The delay "is frustrating and disappointing and expensive for the client," said Andy Dumaine, GKV's chief marketing officer.
GKV tried to cancel as many ads as it could, but for some it was too late. "The radio stations were very kind to let us get out of that at the last minute," Dumaine said.
Orange River sells $25 million of wine domestically and in Europe and Asia. It took more than two years of negotiations and fine tuning of its products before it could enter the competitive U.S. market, Visser said.
