Kilgors Winery Division: Research and Development and Budgeting

Kilgors Winery Division:  Research and Development and Budgeting

Kilgors is a diversified, listed multinational organisation, operating across three major industries: Winery; Hotels; Media and Entertainment.  The winery division is known for its superior quality wines.  They have developed quite unique varieties and have won gold medals in global wine tasting competitions.  The senior wine maker spends a lot of time to ensure that the growing environment is perfect, that the grapes are well watered and carefully harvested.  They use state-of-art equipment in their wine production and employee specialised workforce to manage each aspect of the value chain.  Research and development (R&D) is very important for them.  The senior wine maker explained that with one more recent addition, they looked back to some of the traditional approaches to winemaking, to bring in new innovative ideas.  They experiment with different growing conditions and with different blends to come up with new wine varieties.    

Kilgors are proud of this and survey their customers regularly for market feedback.  They try to find emerging trends and customer tastes on the types of wines that are popular.  For example, the Chief Financial Officer (CFO) noted that there was a growing market overseas for one of Kilgors more recent wine varieties.  He said that in the UK, this particular white wine variety comprises about 20% of the market.  However, in Australia it represented only 11% of white wine sales for Kilgors.  Nevertheless, the CFO said he has seen it grow more than 100% on last year’s sales and expects that the popularity of this varietal will grow.  The selling price per case of kilgors wine is relatively high in comparison to competitors.  It was explained that the reason is the superior quality of the product.