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Having fun, writing about the stuff I like

Some musings on wine marketing

Oscar Foulkes November 8, 2009 Uncategorized No comments

The potential for differentiation makes wine unique amongst agricultural products; the farmer has the opportunity of adding value by virtue of cellar processes, packaging and marketing. Compare this with farms that produce grains, various fruit or beef. The price is entirely dependent upon the relationship between supply and demand.


Cloof's "family of brands"

The French AOC system, which regulates and controls not only which grape varieties may be planted in certain regions, but also the volume of wine that can be made from each hectare, appears to carry out the principles of the concept of terroir. Notwithstanding the logic of preventing the planting of Cabernet Sauvignon grapes in Burgundy, or Pinot Noir in Gigondas, the AOC system has the side effect of limiting the supply of wine with various denominations. Given that this limitation is based upon geographical boundaries, it suggests that French wine marketing becomes more an exercise in real estate than anything else.

There is no question that certain vineyard sites are not only better suited to particular grape varieties, but also have the potential to produce better wines than neighbouring plots. However, one of the consequences of the AOC system has been to lull producers into believing that the name of the region is the brand. The attitude – and I’ve witnessed it on numerous occasions – is that one should be buying the wine because of its region of origin, regardless of any other consideration.

The result of this has been lazy, often arrogant marketing on the part of many French wine producers.

So, when the Aussies came along with cheerful, easy-to-drink and well-priced wines that were not only clearly branded but also aggressively promoted, they easily took away market share from France. This highly praised strategy worked so well for so long that South African producers devoted entire seminars to creating their own version of this proactive commercialism.

The gist of the plan was that the ‘mother brand’ – like Hardy’s, Rosemount, Lindemans, Wolf Blass or Penfolds – could be extended almost infinitely to sell a huge assortment of wines at various price points. In recent years the plan has hit headwinds as consumers have become fatigued, not only by the incessant discount-based promotions needed to maintain sales volumes, but also by the sameness of the wines. The Fosters wine businesses are now on the block as they attempt to exit the industry.

Meanwhile, Champagne has gone from strength to strength, no doubt boosted by the booming world economy (until recently, that is). The difference in this part of France is that it’s impossible to make any other style of wine than the low-alcohol, high acid base wine that’s so suitable for a second fermentation in the bottle. Furthermore, there hasn’t been the kind of brand extension that the Australians attempted. At most, a range of Champagnes under any label will consist of a non-vintage, vintage, rosé and perhaps demi-sec. The top-of-the-range prestige cuvee is often branded slightly differently. Apart from this level of focus in terms of product range, the Champenoise are also unique in that their marketing is based upon lifestyle drivers.

Put differently, in Champagne they sell the sizzle, not the steak. Brands like Moët and Veuve Clicquot sell really high-priced wines in volumes that would make an Australian producer of low-priced wine salivate.

On the other hand, the balance of the wine industry gets very much more hung up on the technical side of things; the stuff that’s interesting to wine geeks, but less so to the person just wanting to enjoy a glass of red wine on a Saturday night. It is no coincidence that marketing and branding guru Al Ries views Champagne labels as the only brands in the wine industry.

When I started marketing Cloof wines nearly seven years ago the operation sold very little bottled wine and a lot of bulk wine. I needed to create avenues for selling all this wine in bottle, with a Cloof label. I began from the point of creating a brand ladder similar to the Australian method. However, it wasn’t until I started down the road of Cloof’s “family of brands” that sales took off in a meaningful way.

At the heart of this strategy is the view that individual wines should express something unique. If so, this uniqueness should be encapsulated in the wine’s packaging, which is different for each product. Hence we have Daisy Darling, Inkspot, The Dark Side, The Very Sexy Shiraz, The Cloof Cellar Blend and others. Each wine is a kind of rock star – or celebrity – in its own right, not overshadowed by the main brand. The Cloof logo is on each of the labels, but the individual products are allowed to speak directly to the segment of consumers that would find them interesting.

Of course, the wines wouldn’t be what they are if it weren’t for the unique combination of soil and climate in Darling; the terroir, if I may be allowed to use a clichéd expression. One can dress up the marketing any way one wants to, but if the juice in the bottle doesn’t do the job, the product won’t sell. It is at this point that I truly cannot resist borrowing from Shakespeare: Daisy by any other name would taste as sweet.

The Cloof manifesto brings together fabulous raw material in terms of fruit quality, a classically schooled attitude to winemaking, and lifestyle-orientated marketing that worships at the altar of brands; the best of both Worlds – Old and New.

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