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Brands are the Future of Wine
Brands have struggled to flourish in the UK wine market, with much of what the Aussies call Tall Poppy Syndrome – be ‘successful’; the one to stand out and get cut down. Why is now the right time for brands in the wine market to flourish?
In short, the market and industry has changed and is continuing to change in all facets the consumer, the distribution, the market opportunity.
There is a underlying significant structural shift going on, which has synergy with the words in this column from last week about the future of the UK wine industry. It wants, according to the Wine & Spirit Trade Association and many operators within, to retain the centre of the world’s trade – a hub of excellence. It may not be the biggest or most valuable globally, but like the UK automotive and fashion industries, the UK wine industry seeks to retain the intelligence, innovation and leadership. These attributes are the very essence of brand management and reflect a direction of travel for the wine business.
In the market wine has long been seen as an expression of ‘self’, where brands hardly feature. Untouched by other consumer goods marketing strategies, with the exception of Champagne, traditionally the wine market has seen itself as the antedote to brands. Retail and distribution organisations have been quick to exploit the space with their own brands. For various reasons wines seem to become a personal and therefore emotional choice.
Those consumers that position themselves as wine aficionados often fill the void of knowledge with bluster. Wine gets used as a badge of expression as to who they are.
This group may take an expensive bottle and hope that fellow drinkers know what you are taking and appreciate it. The problem is when no-one recognises or is interested in the wine that you have taken, your money, bottle and effort is mis-spent.
There is another side to this lack of interest which becomes a hope on the part of the giver as they ‘get away’ with giving a bottle that is less expensive than it looks or gives them the platform to spout forth presenting their unbound extensive (and often boring) knowledge of wine. Or alternatively, and perhaps ostentatiously, they might buy it from a list where it is obvious that money has been spent (message to guest – you are important).
Those that don’t want to be known as aficionados (and frankly that is most of us) take something that is known to them ubiquitous brand or a grape variety distributed through a supermarket or grocery chain. In which case the element of special is lost – the present just becomes commodity and the meaning is lost.
In either direction the wine market has been confused filled with far too many messages for consumers to take on board, ranges so big that they intimidate customers. What a feeling to leave a customer with – intimidation!
But the consumer is changing and moving away from the traditional polarised views of wine. The contemporary consumer cares what it tastes like and crucially about the story, less about the specific grape variety. Where it has come from why it is made in the way that it is – its provenance and alignment to them as a consumer. Simultaneously they are drinking less i.e. they are valuing their wine drinking opportunities more in monetary, occasional and product terms.
The space for brands to fill this gap between consumer desire and engagement has been void for a long while. The problem being that the brands having the capability to fill this space have become associated with supermarket trading, so no premium space to engage. Those without the volume distribution have not had the spare investment to create this space.
There we have the knub of the issue – an over-filled market, with little space for marketing investment, where the product requires exposure and experience. In order for wine brands to gain ROI and traction they need the space in the market, both social media marketing to gain awareness and some traction, along with delivering the ‘experience’ of the brand. It becomes a complex equation and difficult to do.
In a departure from previous strategies wine brands are taking up a more proactive space with consumers. The generic regions have led this type of activity, Cotes du Rhone with interactive food and art club, Bordeaux Butterfly Club at Broadgate Circus and then we have Aldi and Tesco promoting their wine departments – the former with pop-up store, the latter with a wine bar but these are promoting generic names as opposed to specific items or wine brands.
Brands such as I Heart and Campo de Viejo are now taking to the streets to engage on a much more personal level, mining data and experience to bring back to their central marketing strategies to then create new initiatives and loyal customers.
Finally the distribution and marketing behind the brands is seeing more defined markets and is channelling investment into engaging and retention of consumers. As the market continues to define its boundaries more, for example with detail of AWRS perhaps becoming known, companies are focussing on their own USP’s and what makes a real difference now. For the next few years, we can expect brands to grow their footprint in the UK market and have more authority with their consumers.
The last 5 years has ensured that there is a weeding out of the market, whilst at the same time the barriers to entry for marketing activities have come down to more craft levels. This is ideally suited to wine brands and their capabilities to invest in the market.
In the next 5 years, I would expect to see more accelerated use of these marketing activities, as brands compete for market space and differentiation. Ironically considering the economic environment and political uncertainty now may well be the time for brands to demonstrate their intelligence, innovation and leadership.