Three lessons brands can learn from the World of Wine

11 March / 2013
VBA_JKAdmin 15620 Views 0 like VBA: Brand Motion 2 Comments

I’m a bona fide wine enthusiast. I love my wines both red and white, from anywhere in the world. I’ve enjoyed reading and learning about the grape varietals that make up the diverse spectrum of consumption choices.

I started to ponder what lessons the world of wine can deliver to both established and emerging brands. What struck me, when looking at my unglamorous wine rack, was the diversity of the bottles themselves and the communication that helps to facilitate the consideration and purchase of a specific bottle. Unless you’ve spent time learning the different regions and villages, French and Italian wines can be quite confusing.

Much has been written about the language on the labels, the challenge French wine faces and the emergence of a strengthening new world of wine that simplifies the selection process. Earlier this year, Knowledge@Wharton published an article specific to the future of French wines and the struggle to keep the traditional practice of specifying what’s in the bottle by terroir (the micro climate specific to that vineyard or village). This perceived complexity has hindered the growth of French wine consumption and made it vulnerable to new world competition. According to highlights from the Wine Market Council’s Consumer Trends Report, with a total US population of 228 million adults in 2012, 100 million of these adults are wine drinkers, the largest wine consuming population in the world. Wine consumption has been on the rise, with statistics stating that 295 million cases of wine were consumed in 2012. Millennial wine consumption is providing most of the category growth and they are inclined to prefer Malbec.

It’s pretty easy to buy a bottle of Argentinian Malbec. It’s crystal clear on the label what type of wine you are buying. No guessing and chances are high that the bottle is pretty good. Malbec is a wine of consistent depth and character, with a deep red, almost inky color, from the grape of the same name. Now, if you really know Argentinian wines, you may start to look at whether the Malbec is from Mendoza, or more specifically, the Uco Valley, among other appellations. Yet the fact that you can walk into any grocery store, wine shop, or even Walgreens, and purchase a decent Malbec, and not be disappointed, is pretty high.

Australian wine Yellow Tail, hit American store shelves in 2001 with a complete disruption on how wine is sold. Their bold and simple branding, easy to decipher labels, two clear varietal choices (at the time) and with the added bonus of a very affordable price point, caused a run on production and the wines were sold out in stores across the country.

Wines from the New World – California, Washington, Oregon, Australia, Argentina, New Zealand, South Africa have all adopted the simple approach of labeling their wines based on varietal – by the type of grape. This type of labeling has gotten the attention of some European wineries, and many are adopting this approach. It’s important to note that in the U.S., the bottle must be made up of at least 75 percent of the grape named on the bottle.

French winemakers are bucking many of the marketing trends in the wine industry. They feel that the complexity and prestige of their craft makes it necessary to maintain the terroir labeling tradition. Yet, in their own country wine is in a bit of a crisis. According to the report from Knowledge@Wharton, between 1980 and 2010, the percentage of non-consuming drinkers of wine has doubled, from 19 percent to 38 percent of the adult population. Thirty-eight percent of the French adult population doesn’t drink wine? What!?! French consumers also are drinking less and have become more demanding, seeking quality wines at a more reasonable price.

So what lessons can today’s brands learn from this example?

  1. Simplicity. The less complex and more straight-forward your brand and your brand’s message, the greater your likelihood of success. Forbes contributor Patrick Spenner had a great article from July of last year titled, “Marketers Have it Wrong: Forget Engagement, Consumers Want Simplicity.” In the article Spenner states, “Marketers are generally pushing out too much information, causing people to over think purchase decisions and making them more likely to change their minds about a product, be less confident in their choice and less likely to remain loyal to the brand.” New world wines have increased in popularity because when you pick-up a bottle of California Chardonnay (whether you like it or not), you know exactly what it is you are buying. Quick and to the point. As much as I do appreciate the French tradition, it’s a longer time contemplating a purchase when the white wine label reads, “2004 Chassagne-Montrachet.”
  2. Relevancy. Your brand must identify with the lifestyle and attitudes of today. It must make sense to the consumers you are targeting.Yellow Tail did this superbly. It recognized a rise in the attitudes of consumers towards gourmet food and the growing popularity of wine, especially among new, younger wine consumers. Yellow Tail saw its product as a catalyst for socialization.
  3. Value. Prior to the great recession, “value” was a bad word. It wasn’t prestigious or cool for you to be a value brand (unless you were Target). It appeared too often that brands refused to embrace “value” as part of their list of attributes. Value has now been embraced, yet there is still this stigma that value means cheap. Brands need to consider the definition of value against their price points and recognize that value doesn’t mean cheap, it means getting more for the money.

Wine consumers are hungry for quality wine at a good price and they will look beyond the traditions of the Old World wineries to get what they want. French wine consumers are an example of this trend. Yellow Tail took advantage of a price gap for good wine, especially for younger wine consumers, in the $6-$7 range.

And let’s not forget the emergence of the middle class in growth markets of China and India, where interest in wine is also on the rise, opening new markets and competition for wineries throughout the world.

Is your brand in need of simplicity, relevancy, or debating the pros and cons of embracing value? A simple review of your architecture could reveal new opportunities for additional or more focused proof points. Virtual Brand Advisors can help you sort through your branding challenges and needs.

What branding lessons can you share from your interests and experiences? We welcome your thoughts.

– Julie Krebs
President + Principal Brand Advisor

Sources:

Knowledge@Wharton, “The Future of French Wine: Overcoming ‘Terroirisme’ and Stagnation,” http://www.knowledge.wharton.upenn.edu/article.cfm?articleid=3158

Grimaldi de Puget, Vincent. “French Accent: Yellow Tail leaps off the shelf,” Brand Channel, http://www.brandchannel.com/brand_speak.asp?bs_id=69

Spenner, Patrick, “Marketers Have it Wrong: Forget Engagement, Consumers Want Simplicity,” Forbes.com http://www.forbes.com/sites/patrickspenner/2012/07/02/marketers-have-it-wrong-forget-engagement-consumers-want-simplicity/

Wine Enthusiast Magazine, “Varietal versus Appellation Labeling,” http://www.winemag.com/Wine-Enthusiast-Magazine/October-2009/Varietal-versus-Apellation-Labeling/

Newman, Kara, “Wine on the Rise,” Wine Enthusiast Magazine, http://www.winemag.com/Wine-Enthusiast-Magazine/February-2013/Wine-on-the-Rise/

Wine Market Council, 2012 U.S. Wine Consumer Trends and Analysis, http://winemarketcouncil.com/?page_id=35

 

 

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2 Comments
    Susan Mar 12, 2013

    Speaking of wine and branding, tell me you’ve heard about Brad and Angelina’s latest venture. Would love your thoughts!

      VBA_JKAdmin Mar 12, 2013

      Hi Susan! Yes, I have heard about Brangelina’s French Chateau near Provence – http://bit.ly/ZmvLTN and the release of their first wine, a Rose. They are breaking conventions with both their bottle shape and label, http://bit.ly/YGK98k
      Yet, at the $139 price point (for a Rose!?!) this wine had better exceed expectations if they want long-term brand advocates who want quality over star power. Thanks for the comment!