Packaging count

Wines & Vines, June, 1999 by Philip E. Hiaring

Some 140 persons from supplier companies, wineries, design firms, importers and other concerns were on hand for the Second Annual Global Wine Package Design Conference held March 25-26 at San Francisco s Hotel Nikko.

For the second straight year, the conference was presented by Murray J. Lubliner Associates in association with Wines & Vines.

The leadoff speaker was Vic Motto, partner at Motto, Kryla & Fisher, Napa Valley wine consultants and accountants. Hitting a positive note, Motto said "business is great - it's never been better" in reference to recent industry sales and profit figures.

As to the "why" in the equation, Motto noted the strong economy and higher wine prices brought on by product shortages. Unanswered was the question, "has wine established a foothold?"

Motto pointed out that "coastal" grapes dominated in the value department, with about 25% of the quantity accounting for 50% of the value. Grapes from coastal regions, said Motto, left grapes from the interior valleys "in the dust." And, there is not a grape glut, he said.

He also commented on the so-called Japanese Paradox, in which despite tough economic times, exports of California wine to Japan have boomed, up 30%. As for the original French Paradox, first publicized in 1991, red wine sales rose 40% during the recession of the early '90s.

As for negative factors, Motto noted a huge crop in 1989 and a similar heavy crop in '91. This led to cost price-cutting in hand with banks in crisis and (finally) the awareness that phylloxera was a serious menace to existing vineyards that would have to be replaced.

Grape and wine shortages, Motto said, did what discounts and programming couldn't do: improve margins.

For the remainder of the '90s, he advocated wineries branch out to super premiums, and luxury and "trophy" wines. He said it was essential to understand various market segments and avoid marketing to one segment while selling to another. He stressed that wine brands must be known for something and that advertising, in fact, works for the wine industry.

Lee Nordlund, marketing director at Delicato Vineyards, took up the topic "The Future is Now" in reference to a 60-year-old winery that, basically, didn't have much in the way of consumer identification, or "personality." Acknowledging the brand didn't stand for anything in particular, Nordlund outlined his "Ten Commandments of Wine Packaging Design." (See following sidebar).

Kim Stare Wallace (text of her remarks, with illustrations, will appear in the July issue) of Dry Creek Vineyard spoke on how creativity can help the smaller winery make up for the bigger budgets of larger wineries.

Next up were Eugenio Pantaleon of Vina Santa Carolina of Chile and Lou Capitao of Canandaigua Wine Co., the importer. Pantaleon said that about 70% of Vina Santa Carolina (VSC) sales were in export markets, with the United States, Japan, the United Kingdom and Canada being most important. He said that, with the exception of the U.S. market, the same package design prevails worldwide. Labels for all markets are printed in Chile. He said the wine market in Chile is dominated by low-priced wine sold in tetra packs.

Capitao - Canandaigua acquired import rights in 1996 - stressed the importance of strong interpersonal relationships and added that, at the time (1996) Canandaigua had no Chilean wine brand and that VSC, while enjoying repeat business, did not have broad distribution and lacked positioning.

He said the decision was to eschew the "value" of the brand's reputation and, instead, jump on the geography aspect. Research indicated that since VSC had little name awareness or brand loyalty, a logical approach would be to go the geographical route since no other brand had tried to own "Chile." This paved the way for Canandaigua to portray VSC as the quintessential Chilean wine and the geographical approach was reflected in the packaging. The packaging shows the Andes and other aspects of that country-s natural beauty.

Capitao said that in the 2 1/2 years Canandaigua has been importer, sales have risen from 250,000 cases to 400,000 cases.

Michaela Rodeno, chief executive officer of St. Supery in Napa Valley, spoke on global perspectives. She had been a senior executive at Domaine Chandon and has headed St. Supery, owned by the Skalli French corporation (Fortant de France) for several years.

Two executives from Landor Associates - Ed Rice and Nicolas Aparicio - kicked off the first afternoon session. The topic was, are consumers buying the product or the image? The latter seems to be what consumers key on, per the duo. Rice said "brands simplify choice" and "occupy mental territory." Differentiation and relevance build brand image, the pair said. The late Walter Landor was quoted: "brands are made in the mind."

A nagging question for all brand owners is how to handle a brand repositioning if necessary. To this end, Sal Ruriani of Brown-Forman and Gil Hanson of Hanson Associates discussed the redo of Finlandia vodka (admittedly not a wine product, but one facing similar problems).