11 October 2023 / Edit Szabó
You were appointed a year ago. Did you know what you were taking on?
I had my suspicions, as I had been talking a lot to both winemakers and decision-makers for years, and the question of what should be done to make Hungarian wine a sought-after export product and ensure a bigger market at home was something that always came up. I had also often been asked by the responsible decision-makers what I would do if I were in their shoes. I think we have to look at our situation from a distance to get a realistic picture. There has always been a wine marketing strategy – I read a number of them myself when I was appointed to this job – but the different elements were dealt with by different organisations. Wine tourism was handled by the Hungarian Tourism Agency, marketing by the Agricultural Marketing Centre, and so on. And there was either synergy between these organisations or there wasn’t. Most of the time, unfortunately, there wasn’t really, and if there was, then it was only to avoid interfering with each other’s activities. Each agency implemented its own concept without any particular responsibility or strategy and ran operational programmes without actually clarifying what the product was. As everything is connected, it’s very difficult to do marketing without dealing with the product. Which is why I requested a little more authority when I was assigned this task, because in order to create a proper strategy, it’s important to look at what’s happening in both the domestic and the international market and what regulations are being introduced by the European Union, and I have to work with several ministries in this respect.
Shortly after taking office, you said that it was essential to identify the problems and then to formulate a strategy. Where are you now in this process?
We did some very serious research, because we needed to know what has and hasn’t happened in Hungary over the past 20-30 years, and then the National Wine Marketing Strategy was born. This is a 600-page study, 470 pages of which only analyse the research results and formulate innovative tools and action plans. In practice, it is a collection of the tools we have at our disposal, from which – following the rapid geopolitical and environmental changes in the world – we communicate the most relevant and effective mix from time to time, especially to those involved in implementing the tasks. When we started to strategise, I gave a presentation to every wine region, and it turned out that they expected me to come up with new brandings and new slogans…
They were right to expect this, as this has always been the case. When someone new took over the reins, he or she would abolish, with the stroke of a pen, what was already there and set off in a completely new direction…
But I wanted above all to explore the reasons, to understand where we are now and why the value of Hungarian wine is so undeservedly low, what it is that makes our bottom line so incomprehensible. Somehow, we have to get out of the price band of below €1 a litre and reach the €3-4 level. When it comes to this, we always use Austria and where they are as an example. I’ve heard a lot of explanations about why we can’t achieve that, but it’s our job to figure out how we can. This is why I’ve involved international partners in the research.
Because they don’t treat Hungarian wine like some sort of sacred cow?
Exactly. They see the problem differently from the outside and dare to say what we might not dare to say. This material that we have put together with their help shows where the world is heading in terms of both Hungary and internationally. However, it’s important to know that we put together this material primarily for ourselves, although this circle of interests is not that narrow. There are many ministries and government agencies with an interest in Hungarian wine, such as the Ministry of Agriculture, the Ministry of Foreign Affairs and Trade, the Ministry of Culture (due to the educational aspect), the Ministry of Regional Development and so on, so they have all received a copy.
Some say that this study is so important that it should have been posted on the internet long ago, and in two languages…
We don’t agree. The study contains a lot of findings and examples that I would be reluctant to share with our competitors. We will produce a condensed version containing those facts and findings that are important to winegrowers as well as setting out the directions and tasks for each area. We will of course also make these available to stakeholders.
What are the main directions that the strategy suggests we should follow?
Wine consumption is falling worldwide, and this is also true for Hungary. Beer dominates about 40% of the market, spirits around 30%, with wine in third place with 23%. Society is ageing, and there is a slow generational change not only among consumers but also among producers. Education is a key issue; we need to appeal to young people, because the segment that is still buying wine is ageing.
And there are more and more people not drinking alcohol…
That’s true, there is this tendency too, but for them, non-alcoholic wine is a possible alternative. I’m not saying it’s the same, but I had the chance to taste about 250 at an international wine fair this spring and found at least three that I liked. Surveys are already showing that, within a few years, there will be a significant increase in the consumption of non-alcoholic and reduced alcohol beverages. Their production requires very serious technology, which is one of the reasons why research institutes play a very important role in the wine strategy too.
Besides education and the role of research institutes, what else would you highlight as an important task?
Digitalisation, for example. And I’m not talking about the e-cellar register, because that will be accepted by wineries after a while anyway. The question is how to make digitalisation work even better for producers. I remember when the tax authority first connected the online cash register, we simply sat back and watched what would happen. However, what it achieved within a couple of years was to remove the shadow economy from the sector. We fear digitalisation because we don’t understand it, even though it could significantly reduce winemakers’ administrative burden as well as support our activities in many other areas, such as marketing communication.
You also talked about the need to raise the price per litre of Hungarian wines on the international market. There are some producers in Hungary who have been selling their wines at high prices for almost a decade. Have you asked their opinions? Are they helping you in your work?
Quality is the only breakout point, there’s no question about that, and although it is a very small segment of Hungarian wine, it has huge marketing value. Unfortunately, it’s not significant in terms of volume. I consider quality a very important issue, which is why I founded the Winemaker of the Winemakers Award. I still have a close relationship with these excellent winemakers, and we spend a lot of time together. Of course, I also ask for their opinion on many issues and rely on their experience. What’s more, we also have a very good cooperation with the Pannon Wine Guild, and we are now preparing for the St Martin’s Day campaign in autumn with them, among others. So my answer is that we are in constant dialogue with winemakers who make quality wines, and we help each other in our work.
The government is providing HUF 3 billion a year for the implementation of the wine marketing strategy. This sounds like a lot, but what is it enough for?
This amount is far more than we have ever spent on the sector, but if there were one more zero, it would be more than welcome. If the wine sector is functioning well, it benefits the national economy, so it is worth spending on it to improve the indicators. Last December, the Hungarian Wine Marketing Agency was established under the leadership of Gergely Goreczky. They will execute the operational programmes set out in the strategy, and they hold the purse strings too. We are preparing some very serious campaigns for the future, which the Agency will be responsible for implementing, while I will oversee their operation at a strategic level.
My experience is that producers don’t really understand what it is you are doing, what competences you have and what belongs to you? Am I right in that?
I think they are beginning to understand, but it is important to keep the producers informed. This is why I travel to the wine regions, give presentations and talk to everyone, including the relevant government officials.
How many years are you planning for?
I have been mandated for four years, and I would like to complete my mandate. Obviously, there will be programmes and research that will take longer than that, but of course, we will launch these, and I will try to make the best use of the time available to me.
You mentioned that several campaigns were planned with the Hungarian Marketing Agency. The first of these was the Summer of Bubbles, targeting Generation Y and Z, in which wine spritzers, sparkling wine and wine cocktails took centre stage. What’s next?
The Summer of Bubbles lived up to expectations, with one in two Hungarians having heard about it, more than 150 winemakers actively joining in the activity and young people giving very positive feedback. Our What’s going on here? campaign is all about the harvest, with a series of youthful, lively videos, while in the autumn, as I mentioned, we have St Martin’s Day, and we have already laid out our plan for the period up to 31 December 2024.
Beyond campaigns, what are some tangible results that you have achieved that you are proud of?
Let me tell you about the latest one! A few days ago the Hungarian Gazette published the news that from 16 November, wines with a protected designation of origin or geographical indication which are purchased directly from Hungarian winegrowers for representational purposes will be exempt from tax. This is a very big achievement – in common with the Ministry of Agriculture – as this tax, which we call a ‘repi tax’, significantly curbed demand. We hope that this tax relief will once again draw attention to Hungarian wines, and that by Christmas, many companies will be giving their employees wines from our excellent Hungarian wineries as gifts. We are preparing a special promotional campaign with the Hungarian Wine Marketing Agency to reinforce this message.
