2018, Volume 21, Paper 13
ISSN: 2209-6612

How can Small Wineries have Big Success?

Jack Prance – Postgraduate student, Adelaide Business School, University of Adelaide, Adelaide.


The South Australian wine making value chain is analysed in order to identify any inefficiencies that limit the success and profitability of small wine makers and to make recommendations regarding possible value chain interventions. Despite wine being one of Australia’s most significant export industries, and a continually growing sector of the Australian economy, a few key wine-making bodies dominate a significant proportion of the market. This top-heavy value chain model disempowers the smaller wine makers and has led to an inefficient value chain that does not allow small wine makers to maximise their profits, resulting in forced exit. Whilst the South Australian and Federal governments place significant resources and efforts into supporting the wine industry, these actions have only partially assisted in removing the key barriers to success faced by small wine makers in South Australia. Presently, small wine makers are not able to optimise their participation in the value chain, and therefore their ultimate success, due to a number of factors including weak pricing, a lack of collaborative innovation (co-innovation), limited uptake of value chain business models and a power disparity with suppliers and other secondary related and supported industries in the industry cluster.

Key words: value chain, small wineries, South Australia, Porter’s cluster, inefficiencies.

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