Price Increase - Natural Wine Co Range

From: "Freshchoice Stores" <geoff@PROTECTED>
Subject: Price Increase - Natural Wine Co Range
Date: May 4th 2020

Price Increase - Natural Wine Co Range

Good Morning 

We hope you are managing well under the Covid 19 circumstances. Even though our business is categorised as essential services our sales have been significantly affected, over the last 5 weeks.

Some exciting news: we have been named as a finalist in both categories for Organic Farmer of the Year and Organic Brand of the Year by Organic NZ Awards, we will keep you posted on how we get on with this.Natural Wine Co Range

We are working hard for an early release of two of our 2020 vintage wines our Natural Wine Co Pinot Gris and Natural Wine Co Sauvignon Blanc, we hope to have these released by the end of May. As some of you would of noticed we have been rejecting orders for these wines, as they are out of stock.

Its never a good time to manage a price adjustment, we have been planning for this over the last 6 months and was hoping to role it out at the beginning of the financial year, our apologies if this is not a good time for you.

What we are proposing is a price alignment with our Natural Wine Co whites/rose to our Natural Wine Co Pinot Noir. This means our trade price for our Natural Wine Co range will be $13.50 plus, all line priced. Our volume price when you order 7 or more cases will be $12.50 plus. Where the stores do not order 7 or more cases at a time - we propose loading a scan back against the product of $1 (when order price is $13.50), we suggest promotion periods of 5 weeks on sale and 1 week off.

We are currently going through the process with head office price team to correct our trade prices and retail prices. We hope to have these updated within the next 6 weeks. Until this happens customers that order less than 7 cases the price will default to the normal trade price of $12.95 for the Pinot Rose and Whites, then $13.50 plus for the Pinot Noir, unless we have a prior promotion cycle in place, but once this cycle finishes the new prices will take affect. We will not be accepting any credits on pricing for orders less than 7 cases, we suggest loading scan backs. The volume pricing adjustments will take affect from 1st May.

Scan backs can be loaded on the whites/rose of 45 cents and Pinot Noir $1 to get the promo price down to $12.50 plus. The off promo retail price we suggest is $19.95 and on promo price at $17.99, still allowing a 20% GP on the range when on promo. Feel free to email us if you are unsure, we hope to make this transition as smooth as possible.

Our Wrights Estate Chardonnay will remain at the same price for the stores which sell this wine.

Our market research shows that our Natural Wine Co organic brand will still maintain its price advantage against other similar organic brands on the market. We have seen a couple of these brands cease business over the last year as well.

Going forward it is important for us to be financially sustainable. Some of the reasons why we are looking at a price increase is as follows -

- Minimum wage increase, we have absorbed the last three years, as our vineyards are certified organic they are quite labour intensive and our staff, casual staff and contractors have all had wage increases.

- Every year our excise tax has increased, these costs are directly attributable to every bottle we sell. We have absorbed these costs for the last 4 years with no price increases, equating to 15.66 cents per litre over last 4 years.

- Our organic certification cost has doubled over the last 3 years.

- Our overheads have increased running our vineyards with labour rates for our engineers, machinery repairs, tractor repairs increasing over 25% over the last three years. This is quite a significant cost to our business due to our fleet of tractors serviced yearly, repairs on our tractor implements as we operate unique special equipment, plus as we operate our own winery breakdowns and engineer jobs have got a lot more expensive to undertake.

- The rates on our vineyards have increased by 8% over the last 3 years.

- Freight costs per individual cases and pallets have increased over the last 3 years by over 12%. As we send a lot of individual cases direct to store this has had a direct increase per product of approx 9 cents per bottle.

- Insurance costs for our business have increased considerably over the last 3 years by 25% per annum.

- Our MPI wine standard management audit costs have increased by 20% over the last 3 years.

- We have employed more wine tasters and a sales representative in Auckland to help support the sales and marketing within our stores.

We are notifying all our trade partners of this trade price increase across our range. These volume price adjustments will take affect from 1st May 2020 and start to flow through the marketplace over this month, our new retail and trade prices will be updated through head office and we hope to have these updated within 6 weeks.

If you wish to discuss this further please contact us either email info@PROTECTED or contacted Geoff on 027 656 8222.

Geoff & Nicola Wright
Home of Natural Wine Co
info@PROTECTED (06) 862 5335, 027 656 8222

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