"It's about the consumer, stupid" - Interview, Accolade Wines CEO Paul Schaafsma - Part II

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The first part of this interview can be found here

In the second part of this week's just-drinks interview with Accolade Wines CEO Paul Schaafsma, we discuss the role brands have to play in the wine industry, whether wine is more of an FMCG than a purist's playground and the secrets to successful marketing.

just-drinks spoke to Paul Schaafsma earlier this year

just-drinks spoke to Paul Schaafsma earlier this year

On previous occasions when we've met - most memorably overlooking Lord's cricket ground ahead of a black-tie dinner in the fabled Long Room, courtesy of Hardys - Schaafsma has talked vociferously, and at length, about the need for and relevance of brands in wine.

"It's all about the consumer, at the end of the day," he says. "They have to pick up the bottle and be able to have confidence that they can trust and understand what the experience is going to be like when they drink it. A strong brand gives the consumer that confidence. In the UK, for example, the level of wine knowledge is not great. At the end of the day, for a lot of people, this is a beverage - it's a treat at the end of the week, it's the most expensive item in their shopping basket and they don't want to get it wrong. They want the right price and the right quality."

For all the talk of consumer education when it comes to wine, Schaafsma firmly believes that recognised brands can do the hard yards in this direction. "Investing in your brand and making people understand your brand is critical," he continues. "People ferreting through a large aisle with lots of labels to find something new is not the typical shopper in the UK. They want to be led, rather than forage for something a bit different. There are plenty of products out there that don't have brand recognition and are probably fantastic. But, that's not our business."

At the same time, branded propositions should be credited, Schaafsma believes, with introducing new consumers to wine. He cites the launch two years ago of Echo Falls' fruit fusion range as evidence. "Here's a product that the wine-writing community would never write about, but that has brought more consumers into wine than anything else in probably the last five to ten years," he says. "Fifty percent of people who drink it have never drunk wine before. If we can get 18-25 year old consumers to come in at an Echo Falls Fruits level, you're getting people who don't really understand what, say, Sauvignon Blanc is. As they come into wine, we can offer them the type of flavour profile that they want, After 12 to 18 months, they may want a different wine experience, and they can be led by a brand that they have an awareness of. All of a sudden, you've got a wine drinker. It's no different to what we've been doing the last 20 or 30 years - you bring them in with a sweet wine, like Liebfraumilch or Black Tower.

"In the first ten months, we've sold 1m nine-litre cases [of Echo Falls Fruit] - I've never had a brand in my 20 years in the wine industry that's gone from zero to 1m cases, with distribution in every major supermarket, in such a short period of time. It delivers a solution to a consumer in a certain age group that was lacking. Is that an FMCG product? I guess it is. But, it's also a wine product."

Then, there's the benefit to the retailer: "As the market moves away from half-price promotions, the supermarkets are looking to create a proposition that shows value without a massive discount, which also gives the consumer confidence. We need to show that there's a point of difference between our brand and the bottles next to it. Otherwise, there's a feeling of commodity about it."

Ah, he's done it now: The 'C' word! Is wine a commodity? Is it an FMCG? "I think wine can be an FMCG at certain price points," he replies. "In other areas, it's not. The average price of a bottle of wine in the UK is GBP5.34 (US$7.60). If we're talking about wine above GBP8, what percentage of the audience are we actually talking about? Around 88% of wine in the UK is sold at GBP6.50 and below. Are those consumers looking at wine as an FMCG as they do their shop? They probably do. Is that a bad thing? I don't think it is.

"We've got to be cognisant of who our customer is, and give them what they want. We can't be so precious about wine, we need to make sure the flavour profile is right, the packaging is right, the proposition is right. If all we're talking about is the bloke who's making wine the same way that his grandfather's grandfather's grandfather made it, and we're not changing the label because his uncle Louis created it 200 years ago, that's not necessarily what the consumer's thinking about."

At the same time, Schaafsma maintains that Accolade has something for the more knowledgeable wine fan. "The bulk of our consumers aren't worried about what side of the hill the grapes were on. I get shot down for that by the purists, who are connoisseurs of wine. That's fine: I've got something for them as well. I can talk for hours about premium wine and how that creates a halo effect and what it says about Hardys, for example. But, that's for only a small proportion of the consumers that we're trying to look after. If I dedicate all that time to 1% of consumers and ignore the broader church of people who stylistically want the right type of wine in a package that they feel comfortable with, then we're a bit silly, aren't we? I got that drilled into me very early on in my career. It's about the consumer, stupid!"

Another subject that you can guarantee will get Schaafsma going is the marketing of wine, an area in which he is particularly proud of Accolade's activities. "We almost feel like there's been a reaction to some of our efforts, with some companies recognising that they can't rely on price and store positioning in stores any more to get through to consumers," he says. "The marketing of wine brands is improving, but there's still a long way to go: You don't see many activations like Hardys' cricket sponsorship in wine. Anakena's tennis partnership and Mud House's tie-up with rugby [announced yesterday] are examples of what should be happening."

So, who does he feel is doing a good job in this area? "I think there are some companies doing it very well. Concha y Toro is doing a great job - I've got a lot of respect for them. Treasury in certain parts of their portfolio is doing a good job. There are people within our industry who get it."

And, when it comes to marketing advice, Schaafsma does not believe it is all about splashing the cash. "Some of the digital work that's been done is pretty clever," he notes. Consider endorsements, which can work really well in Asia, for example. It's creating the suck, the demand and the confidence for your product. People are naturally nervous about buying wine, so you've got to give them some confidence. Companies that do that through their marketing and advertising will be successful. So it's not about spending millions to do it.

"You need to find your interest set and talk to them to influence their purchasing decisions," he adds. "Be clever, do something to provoke press or social media interest."

Much as money isn't the be-all and end-all of successful marketing, Accolade has been operating at the higher-end of the spend scale.  What has been the thinking behind the cricket, tennis and now rugby tie-ups? "Just over three years ago, when I started, there was a group of sports that we were looking at for partnerships with our brands," he says. "It all came down to what will give us the most exposure. A tennis tournament lasts two weeks, for example. A cricket test lasts five days - and there are five of them in a tour - and they run over the whole summer.

"Off the back of the success of Hardys' cricket sponsorship, we realised we could do more and we could do it with people that we have worked with before. Tennis is also a good wine consumer's sport and no-one else was in that space.

"Rugby, which is more my favourite sport, came about because we looked at the success certain wine companies had had sponsoring the British Lions when they did it well, and the uplift in sales that they had as a result." He's referring here to Brand Phoenix's South African brand, First Cape, a sponsor of the Lions' tours in 2009 and 2013.

"There's also the association of New Zealand with wine, and the next Lions series will be in New Zealand. It all just felt right."

It being his favourite sport, no doubt Schaafsma will be holidaying in New Zealand at the time of the tour? He laughs: "Would you like some tickets?"

Sectors: Wine

Companies: Accolade Wines

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