The Brand Consultancy: branding and the wine industry

Wines & Vines, June, 2001 by Andy Peay

Wine consumers are especially interested in (quality and value, and they rely on impressions to guide them. Brand name, label design, advertising, point-of-purchase collateral, price point, expert ratings, word-of-mouth, kind of outlet and source of fruit all influence the buyer's judgment.

Ideally, all the messages work together, the impression formed is clear and positive, and the customer gains the confidence they need to purchase. But if they don't, margins can collapse as price must be cut to move inventory, while trade publications are pumped with advertising dollars in the hope of receiving better ratings. That price cut will further erode the brand image, especially if the wine is sold in improper channels. All sense of a unique value proposition is lost.

Given this reality, marketers have grown savvier in recent years about the need for brand strategy. Yet it can be a complex issue. Though wine is generally perceived as an elite drink (at least in the U.S.), it is overwhelmingly sold on the mass market, at mass prices. The upscale status is contradicted by the everyday context of its consumption. Yet winemakers don't want to destroy the red-carpet image either: status means the permission to charge more.

Initially, California wines handled this by generating mass-market jug wine advertised as premium. Images of gowns, tuxedos and limousines proliferated. Of course, that didn't work: quality issues aside, distribution, packaging, price and customer service were all inconsistent with the luxury positioning.

A second course of action--the unfortunate reality that has the industry paralyzed today--focuses on ratings. Let's face it, not every wine can get a good score.

Recently, there has been a movement toward greater long-term planning. Wineries are regaining control of their products through conscious brand management, positioning their wines rather than merely advertising them. Although "upscale" is still popular and ratings do count, there is more emphasis on strategic thinking and tactical deployment than ever. Wineries need to assess how their constituencies (customers, retailers, restaurateurs, wine critics, investors, and so on) perceive the brand, determine the permissions that exist for that brand, and based on that analysis, offer a consistent brand promise that the winery can deliver. Among the best approaches I've seen:

Find "class" in "mass." This approach focuses on direct-to-consumer advertising rather than through trade publications alone. Messages offer an alternative to the ultra-premium concept--the idea that wine can be an enjoyable part of one's everyday life, sharing good times with good friends. And at $10 a bottle--the price at which the vast majority of people consume wine--the promise can be delivered.

Make "premium" believable. If the promise of luxury is made, it has to be armed with 360 degrees of backing.

Every interaction with the customer must reflect that image: expensive, solid bottles; high-quality label design and case packaging; restaurant-limited distribution; appropriate fruit sourcing; personal customer service; on target newsletter and collateral; and limited production.

Shelter new brands with a master- then let go. One well-respected label used to get top dollar on the market. But now it often sells at a cut-rate, its brand equity diluted by too many cheap sub-brands in broad distribution. Another vintner in the same situation was smarter. It gradually withdrew the master brand from the sub-brand's label, first turning it into a logo and then, once it became successful, letting the sub-brand sail off on its own.

Adapt the brand message appropriately. Every brand has different kinds of constituents, each of them with a vested interest. Public investors, for example, don't want to hear about the "lifestyle of wine. Neither does the restaurant buyer, who cares more about things like distribution arrangements-they had better not find the wine they sell for $6 a glass at the corner liquor store for $12 a jug! On the other end of the spectrum is the tasting-room consumer, who might very well want to hear about the "rolling hills and great views" in the area where the wine is grown.

Go into the niche business. Wineries often become associated with a single variety they produce. So it can be very effective to develop a portfolio of niche brands, each with a totally separate identity, to capture customers across multiple segments. One very successful winery did just that, forming a separate division that holds numerous boutique brands representing distinct wine-growing areas, producing varieties that appeal to various customer segments.

Help your customers. Especially in California, "wine school" is becoming a popular marketing vehicle.

Not only does it help the consumer become more comfortable with wine in general, but it also accustoms them to the brand they "learned" at school. They like it, they buy it, and more importantly, they talk about "that fun course we took" at every available opportunity.