Managerial expertise in the wine industry: Implications for rural development

Abstract

This study aimed to identify the key management skills for running a successful winery business, which in the Australian industry is predominately a small to medium sized business, and explores the existence of such skills within the industry. The information was obtained through structured interviews with a range of winery owners and managers in the four main wine regions of Western Australia.

Whilst a set of universal management skills are identified by the industry participants, these are not universally held. The study examines skills training issues highlighting the diversity of winery owners and managers. Recommendations have been made in ways which national and locally based training options could be further explored and implemented.

Summary

This report outlines the findings of a research project which investigated managerial expertise and skills in the wine industry. The specific focus was on the skills current owners/managers had, what skills they felt were important and where they might acquire those skills.

The study employed a qualitative methodology: a sample of winery owner/managers in the four main wine regions of Western Australia were interviewed using a structured interview schedule. This was a pilot project; limited to West Australian wineries.

Findings suggest that managerial skill and expertise in the industry depend on a range of factors such as motivation to enter the industry, background of the owner/manager, winery size, region, and current competencies. However, despite this range there were also a number of common threads regarding skills.

In general interviewees thought they possessed sufficient management expertise, irrespective of whether they had had any formal training in the relevant skills. Therefore they believed they did not need any further training in these areas. However the business operations of many interviewees indicated that the reality of their management expertise fell short of their perception. What is perhaps even more disturbing is that those who realised they did not have a high level of management competence still had no plans rectify the situation, choosing rather to rely on ‘intuition’ or something of a ‘she’ll be right’ attitude.

Starting a new wine venture has high entry costs, so it was somewhat surprising to find so many owner/mangers with little or no financial expertise and little or no general management expertise. The current glut and general increase in competition in the industry is making it increasingly difficult to maintain profitability and may put some weaker enterprises at risk.

This is of concern not only for the individuals concerned but also for the regional areas in which wine production and wine tourism form a significant part of the local economy.

It is therefore desirable that management expertise in the wine industry are strengthened; a number of recommendations towards achieving this goal appear at the end of our report.

The report is structured as follows: the first two sections restate the research questions and outline the methodology used. Section three details our findings on specific management skills including: skills are seen as important, skills perceived to currently exist and their level, what training has been undertaken, what training is needed both by owner/managers and staff, differences in the level of management expertise between wineries. We then discuss issues related to motivation for operating a winery and identify winery typologies that were identified in the course of data analysis. Section six summarises the training needs of the industry. Sections seven and eight summarise and identify specific recommendations to improve the level of management expertise in the wine industry.