COMMENT: Constellation - building a Brit base with branded bottles
Matthew Clark, the UK subsidiary of giant drinks group Constellation Brands, is releasing a new Californian wine Echo Falls next week to compete in the sub £4 market - a market which accounts for 44% of British wine sales.
As a new wine, it will attract consumers not through taste but through price and branding. The price point of less than £4 suggests that it is not aimed at dedicated wine lovers but at consumers who want to enjoy a glass of wine at an affordable price. However, wine cannot be marketed to consumers on the grounds that it is cheap, however attractive this may be. Manufacturers and retailers have to create the impression of 'class' to avoid discouraging consumers.
The wine market has expanded rapidly in recent years, driven by New World wines originally and now by Eastern European vineyards. As a result, consumers can be overwhelmed by choice so there is real value in developing a recognisable, stand out brand that can consumers can readily identify. This encourages repeat sales as consumers simplify the choice by building a repertoire of two or three brands. This strategy (as well as the quality of the product) was part and parcel of the success of Jacob's Creek, Ernst and Julio Gallo and Penfold's.
Echo Falls is aiming for the values of "authenticity...classic wine values and contemporary looks". Targeted squarely at aspirational consumers who would like to emulate what they perceive as the behaviour of the wealthy and successful, this branding coupled with the low price gives Echo Falls a chance to establish itself in this key consumer group. It may even be possible, after a loyal customer base has been built, to introduce better quality wines at a higher price point, as many British wine consumers feel that price is an indicator of good quality.
Related research: Datamonitor, "Prestige Consumers" (DMCM0101)
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