What's in a brand?
How do you create a brand? Spend millions on RTD, focus groups, marketing and PR? Or slap a label on a good quality product, light the touch paper and stand back as the orders come flying in?
Both these schools of thought have been tried and tested in the drinks industry but the latter, the "let the quality shine through" approach, has only worked for a small number of wines and even fewer spirits and beers. The elite fine wines such as Romanee-Conti, Chateau Latour and to a lesser extent Cloudy Bay (a small New Zealand vineyard which became a runaway success with little promotion) are special cases while the likes of Smirnoff, Baileys and Budweiser are backed by million dollar budgets.
But does this mean it can't be done in today's commercial climate? At the recent London Wine and Spirits Fair, Harper's Magazine organised a seminar entitled "Branding: What can the wine trade learn from other sectors?" the panel was truly split on whether corporate branding was the way forward for the wine industry.
"The wine trade leads the world in marketing. It has the most diverse products and diverse price points, which change all over the world, and other industries would be jealous of - from £2 to £2000," said James Herrick, the founder of James Herrick Chardonnay and now chairman of Wineprophet.
He believes that all a bottle of wine needs is a label and the quality of the wine will generate the interest and consumer retention. "Go into a retailer today and you will find three brands of dog food, two brands of toilet paper and then turn a corner to find 3,000 brands of wine. As you can't buy the unlabelled product of wine, this helps underpin the basis that all these wines are brands - the label tells a story," he said.
"a sign/icon that a consumer will identify and attribute to the product, and be understood immediately"
Printed on that label could be the name of the region, the varietal, the Chateau or the family name of the producer all of which can constitute the wine's unique selling point. James Ryland, export director of Calvert described a brand as "a sign/icon that a consumer will identify and attribute to the product, and be understood immediately". Bordeaux was his example but he admitted the region now causes mixed feelings among consumers.
"Though I don't want to criticise the AOC system, as we do need a guarantee of quality, it has become far too broad. You can go into a corner shop and see a £2.99 Bordeaux wine on the shelf, next to a negociant blend, next to a premium Grand Cru. These are all classed under the Bordeaux name. Where is the point of difference? The consumer does know mediocrity, and responds to quality," he told the seminar.
As Herrick pointed out, the majority of Australia's wine companies are now owned by brewers and their primary goal is to deliver shareholder value and good dividends. So, in his eyes, the price points will narrow as the market becomes more competitive. However, the brewers have spent years trying to make sure that their pint of Foster's or Budweiser tastes exactly the same across the world, explained Mario Micheli, formerly with Anheuser-Busch but who recently joined Southcorp Wines as president of Europe.
He used the French sparkling water Perrier and Haagen-Dazs ice-cream as clear examples of core brands in the 1980s and 1990s which were in old, unsexy or unsophisticated markets but re-established themselves and outperformed their respective sectors through advertising slogans or focusing on specific markets. In the case of Haagen-Dazs, it sold sex to young couples and saw its profits jump by 200% in two years. Chardonnay girl, the new target market and talk of the show, could be the answer.
But traditionalists in the audience wondered if was the right direction for a premium sector business, which can deliver high margins, but is based on heritage and they queried whether or not wine should be cheapened by crass gimmicks or quick fixes. "Where does this leave the small guy?" said one delegate.
Ryland summed up the general panels feelings: "Once the consumer recognises good quality, then the wine will be backed by good sales and will evolve at its own pace. And the industry will evolve and brands are the way to do it," he said.
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