The Losh Cause – Diageo’s original take on Australia
It may have taken Diageo a long time to move into the Australian wine sector but now it finally has, with the launch of its 7th Continent brand, it cannot be accused of simply following the crowd. Chris Losh assesses Diageo's original approach to the Australian wine market.
The news that Diageo is launching an Aussie wine brand will doubtless have sent eyes rolling in sockets all over the drinks world. In a retail environment ever more dominated by multi-nationals and multi-grocers, you could be forgiven for thinking that we need another million-case monster like a hole in the head.
To be fair, the surprise is not that the team at Henrietta Place has come up with something like 7th Continent (as it's called), but that it's taken Diageo so long to do so. Bearing in mind that Australia has been one of the most dynamic wine performers of the last decade, particularly in the UK and US, the lack of an Aussie wine in the group's portfolio has been glaring.
And surprisingly, 7th Continent is not a big, sweet, blowsy Blossom Hill with a Bush Tucker hat. Its whites, at least, are pretty cool and restrained, and far from hitting the press hard with its arrival, its creators are anxious to downplay its launch, precisely so it doesn't become a hostage to gigantic volume expectation from the Diageo board.
Nor do the surprises end there. For starters, 7th Continent is eschewing the accepted wisdom that a brand needs to launch at 'entry-level' with two or three varietals and ladder consumers up through a succession of reserves and premiums to some notional winemaker's indulgence.
There are currently seven wines in the range (though it will probably finish at about 15), and they are all GBP7.99. Forget pyramids and ladders, this is brand positioning on the pancake model…
But it gets weirder. The wines are not inter-regional blends of the sort that have powered Australia to where it is now, but regional expressions, and ones, moreover, that can verge on the unusual. Thus, there is no Barossa Shiraz (arguably the only regional style that any wine consumers have even the faintest chance of recognising), though there is a Shiraz/Viognier. Likewise, McLaren Vale provides not a straight Shiraz, but a Shiraz/Grenache.
Clare Riesling may be standard for the wine trade but probably not the consumer. And Langhorne Creek is certainly off-piste. Hunter Semillon is tough going at the best of times, and I can't have been the only journalist at the launch who'd never even heard of the Yea Valley, still less knew where it was. (Victoria, if you're interested).
The spiel is that Diageo consciously wanted to make consumers reassess what they knew about Australia; to readdress the 'deep-cut, gondola end' imagery that has hurt the country's image over the last few years and to provide a trade-up brand for younger wine drinkers who came into the category through Australia, but now migrate elsewhere when looking for a special occasion wine.
The thinking is logical, laudable even - and chimes perfectly with the messages coming out of the generic team at Wines of Australia.
Yet this remains a brave move. Not least because the whole 'Brand Australia' schtick has sunk deep into the psyche of the wine-buying public all over the world and the regionality message is proving hellishly difficult to get across.
Market research can show all it likes about consumers wanting a new, more upmarket Australia, but there's a big difference between the focus group and the supermarket aisle, and practical evidence suggests that basing your brand on a concept that is both more expensive and more complicated is never going to be easy.
Of course, you could cynically say that the GBP7.99 price point is precisely the right level to be "Bogged Off" (BOGOF - buy one, get one free for the uninitiated) to generate sales, which would make 7th Continent no better than A N Other brand, frankly. But the creators claim this is not the strategy, and that a GBP2-off promo will be their maximum. I believe them. It would make no sense to create a range that is inherently going to be more expensive, then cut the legs off it to sell it. Should 7th Continent ever appear on BOGOFs then the brand will have failed, no question.
In fact, it is to avoid such self-defeating bottle dumping that the initial targets are decidedly conservative. When pushed, the company talks of 100,000 cases Europe-wide, mainly in the on-trade with perhaps a couple of off-trade accounts, which ought to be highly achievable.
There is, of course, no shortage of fruit in Australia (or desperate growers looking for new contracts) so bumping up the volume, should they need to, will not be a problem.
But I don't think that's what this range is about. It isn't going head-to-head with Nottage, Gallo, Kumala et al. but genuinely (perhaps naively) trying to offer something different.
And given that it should have plenty of corporate muscle behind it, whether 7th Continent stands or falls could tell us all that we need to know about the openness (or otherwise) of the 21st century wine drinker.
It may have taken Diageo a long time to move into the Australian wine sector but now it finally has, with the launch of its 7th Continent brand, it cannot be accused of simply following the crowd. Chr...
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