Wine Future 2009

Branding & the Future

of the Wine Industry
Robert Joseph
Editor at large of Meininger’s Wine Business International
&
Director of DoILikeIt
 What you see…
A rare sight: a three-dimensional example
of Escher’s famous impossible
triangle…
Is not always what you get…
Sometimes, things look very different if
you look at them from a different
angle…
Aren’t we lucky
we’re not all in
the motor
industry?
We only have terrorists blowing up wine tankers - and
millions of litres of wine that tax payers pay to get
turned into industrial alcohol…
DOC
DO
AOC
QmP
DOCG
QbA We all know
plenty of wine
TBA industry initials.
But not the one
that counts:
ROI Return On
Investment
 A few thoughts on the future
• There will be fewer wines and wineries
(because of a lack of routes to market)
 A few thoughts on the future
• There will be fewer
appellations/denominations.
Wine regions - in the Old and now the New
World – want to create their own appellations
in much the same way that African states
want their own airlines.
Few of them are genuinely sufficientky good or
different to warrant an existence. Outsiders
have no reason to be remotely interested in
them. And there’s no budget to change that.
(Belgium no longer has an airline of its own)
 A few thoughts on the future
But cost and concern for the environment will revive the
old ways…
 A few thoughts on the future
• There will be a clearer division between beverage
wines and “fine wines” (partly thanks to packaging)
Wine used to be divided between the basic beverage
that was sold directly from the barrel (or in refundable
litre-glass bottles or Tetrapaks in South America or
Bag-in-Box in Australia) and the serious stuff that
warranted bottles, labels and corks. Today, the most
basic – 3-for-£10 wines come in the same packaging
as Chateau Latour.
It’s as though we’d all decided to use a knife and fork to
eat our sandwiches…
 A few thoughts on the future
• Even “finer” wine will no longer be
automatically thought of as coming in 75cl
glass bottles with corks (or possibly even
screwcaps.
• Other materials (eg biodegradable PET) and
sizes (eg 50cl) will have their day.
Wine on the right: my own 1 litre recyclable PET
• Fewer, weaker critics
• More online chatter
• More online purchasing
• More informative labelling
• And….
A greater understanding of branding -
or maybe something beyond
branding…
These are all Lovemarks
• Lovemarks: a marketing technique intended to
replace the idea of brands - and the name of a
book written by Kevin Roberts, Worldwide CEO of
Saatchi & Saatchi. Roberts claims, "Brands are
running out of juice". And asks, "What builds
loyalty that goes beyond reason?
• Mystery: Great stories: past, present and future;
dreams, myths and icons.
• Sensuality Sound, sight, smell, touch, and taste
• Intimacy Commitment, empathy, and passion
Lovemarks,
command both
respect and love. In
September 2006,
Saatchi & Saatchi
won a US $430m
million contract with
retailers JC Penney
because of the idea
of lovemarks
Brand identity
 What is your
brand really all about?

And why should I be

interested?
Features

Benefits
 Features
• My region is as big as Chile
• Our chateau was built in 1653
• We won a medal at the Indian Wine
Challenge
• Our vines are very old
 Benefits
• Our wine will excite your taste buds
• Serving our wine will make you look more sophisticated
• Our organic wine will make you feel healthier.
• Our lower alcohol wine will make you less drunk.
• Our Sustainable/Organic/Fairtrade wine will make you
feel like a better person.
• Our Shiraz will make your hamburger taste better
• Drinking our Zinfandel will make your wife/husband
seem more attractive.
 The Chinese menu
When diners in a Chinese restaurant
complain about not being able to
understand the Chinese-language
menu, the answer does NOT lie in
expecting them to learn Chinese.
(But that’s not the way the wine industry
thinks. For many people “Education” is
the answer to all of the industry’s
problems.)
 A Chinese-menu wine bottle
Do you know what this white Italian wine
is likely to taste like? Sweet? Dry?
Rich? Steely?
Where was it
produced?

What is it made
from?
Is the New World really so
much better?
What does
Mudgee contribute
to the
flavour/quality of
this wine?
 Consumers are confused
Between grape varieties, regions and
brands…
 There is a surprising amount
of confusion
As surveys carried out by firms like Wine
Intelligence for clients like Constellation
have revealed, many otherwise
apparently sophisticated and high-
income wine drinkers imagine Rioja and
Macon to be grapes…
My own, newly-launched research
company DoILikeIt carried out a survey
of attendees at the London Wine Show
– consumers who paid £15 to attend a
wine exhibition revealed an interesting
lack of knowledge.
 Region Brand Grape Don’t
Know
Moulis 33% 17% 21% 29%

Malbec 18% 20% 26% 36%

Guigal 24% 19% 24% 33%

Torres 18% 57% 18% 6%

McLaren 45% 55%

Vale
Clarendon 33% 58% 9%
Hills
DoILikeIt Survey. London Wine Show. Oct 2009
But it’s NOT the consumers’ fault, We, the
producers and distributors have done
woefully little to build their knowledge.
 If the wine industry sold
computers, it would forget to
provide instruction leaflets
From the New York Times
“People are deserting us for
other, simpler appellations.
We’re failing to attract
newcomers to our wine
because of confusion about
likely sweetness levels”

Jean-Louis Vézien, Director of the CIVA, the

official promotional body for Alsace wines.
Or it would include instructions
for a completely different
model
Which tap would you
expect to produce hot
water?
Which bottle would you
expect to contain the
drier wine?

Why not the one

misleadingly
calling itself
“Extra Dry”?
 Book publishers get it right
Book covers are far more informative
about the style of their contents than
wine labels….
 Some wines are as
informative as those books
Successful wines like this…
(The vast majority of)
consumers like
simplicity
and
consistency
Most of us like restaurants we
can rely on
And a growing number of us take the
same approach to coffee
In a flat coffee market, the market for
Nespresso pods is growing by 70%
annually…
 Compare and contrast
Easy to understand, colour-coded,
consistent coffee pods…
And a confusingly similarly-packaged
range of quite different Shirazes from a
producer in Australia.
(If only the bottles had some of the
imagery to be found on the same
producer’s website)
 Why the inconsistencies?
• Vintages
– Why do we need them?
– Why inflict the effects of cold rainy weather onto
consumers? No self-respecting restaurant would
dream of excusing sub-standard steak by saying
“well the butcher delivered us meat that wasn’t as
good as usual”
– Spain once cleverly offered non-vintage premium
wines. Vega Sicilia still does. And so do the great
names of Champagne
“People find vintages
interesting”.

Yes… and some

people find the
variation in stamps
interesting. They’re
called stamp
collectors. Most of us
think of stamps as a
means of getting
letters to their
destinations.
And most people
think of wine as a
drink.
 Why the inconsistencies?
• Regions
– Should the same brands cover several regions?
– In the New World it has been a recipe for success.
But it IS confusing… To anyone without an
understanding of those regions’ characteristics.
– What if Rioja were right in forbidding producers
from using the same brands in Rioja and
elsewhere?
 Why the inconsistencies?
• Winemaking
– But even Rioja varies confusingly. Between €2
Joven, traditional elegant Gran Reservas and rich
dark, “modern” 14% examples.
– How should any producer establish where they fit
– in style or quality terms – within an appellation?
– Maybe they should work together with like-minded
neighbours. Following the model of Relais et
Chateaux hotels…
– These guys do it brilliantly in Portugal…
The Douro Boys
 How to get away with being
inconsistent
• By producing small amounts of wine – under
5-7,000 cases – and either “hand-selling” it
directly from the winery- or through specialist
retailers and sommeliers.
• (Waiters can explain the fact that “chef has
decied to cook the lobster a little differently)
 How is YOUR wine being
sold?

Is it being “hand-sold?”

Or fighting for attention

among hundreds of other
similar bottles?
 Or by developing a
relationship with the consumer
• True “fans” – of musicians, actors and
restaurants – tend to be forgiving of
occasional lapses.
• Casual customers tend to be a lot less
tolerant.
 Château Musar!

Have such a devoted fan

club that they’ll forgive you Which brings us back to
anything. “Love Marks”
A description that applies
to many wines…
 Conclusions
• Does your brand have a coherent identity?
• Do you sell the features - or the benefits?
• Who are you selling to?
• How are you selling to them?
• When/where/how are they going to drink it?
• Do you have a relationship with them?
• Is your relationship good enough for them to
forgive your inconsistencies?
 Who are you?
What do you do?
And why should I care?

robertj@doilikeit.com