Climate change, health, social media and – that old chestnut – the nature of marketing
The three days I spent at the Wine Vision conference organised by William Reed in London recently were very rewarding. One can always find fault with such events and some of the panel sessions were disappointing in terms of lack of depth, but overall there was plenty of food for thought.
Here are six of the numerous thoughts I highlighted. They cover a fairly broad spectrum and are presented in no particular order. In some cases they served to reinforce views I already held – but usually that in itself can be invaluable.
Climate change is happening
For the benefit of anyone who still doubts this, that was the theme of Miguel Torres’ presentation, a message he backed up with plenty of substance.
The effects of climate change are inevitably going to be more obvious to anyone in a category with an agricultural ethos. Interestingly, Torres was not unduly pessimistic about the process: on one level it will simply require producers to think hard about the consequences, and then laterally about the solutions. However, there is no doubt that dealing with climate change will require significant investment and resource; resource that is much needed elsewhere in such a competitive market.
In terms of lateral thinking, Torres touched on a key issue. In regions where there are very strict regulations on what can or can’t be planted, there will need to be an openness to fundamental change, and in good time. That could well be an interesting challenge.
The next twelve months will be a critical period for New Zealand’s producers.
( This piece first appeared last month as my column in Harpers.co.uk )
A recent report by Bibendum noted that New Zealand Sauvignon Blanc is losing ground to Sauvignon from Chile and South Africa in the UK, due to significant price increases . At around the same time Jamie Goode suggested that now is a good time for Touraine producers to promote their own Sauvignon, given the gap that has opened up by these increases.
If Philip Gregan ( the CEO of NZ Winegrowers) is correct then producers in New Zealand are not unduly concerned about the situation. He noted that “ We have returned to where we were in 2008”, in other words before soaring supply led to heavy discounting in the UK. New Zealand, he went on to say,” never has been and never will be a low cost wine producing country ”.
Producers will certainly be less concerned if the current generic strategy pays off. They are in the process of broadening their distribution base for Sauvignon with the objective of becoming far less dependent on the UK. They are also broadening their varietal base and become less dependent on Sauvignon itself, and its this latter strategy that particularly interests me.
Are we on the horns of a dilemma?
During his travels through space, Arthur Dent, the central character in The Hitchhiker’s Guide to the Galaxy, comes across a planet that had just managed to get rid of those elements of the population considered useless. A story had been invented that the planet was about to be destroyed by a comet, and two very large spaceships had been built. The population was then divided into two. Those deemed surplus to requirements – which, as I recall, included hairdressers and marketing people – were fired off to an uninhabited planet some light years away.
A while later the hitchhiker happened upon this planet where he found some marketing people having their hair cut. They appeared to be thriving (and had great hair) but after a while he realised that he could see no evidence of the wheel. It was pointed out to him that they had developed the capability to build the wheel soon after landing, but the marketing people couldn’t decide what colour it should be.
Now Douglas Adams, the author of the HHGTTG, is hardly alone in believing that marketing can too often represent a triumph of style over substance. Indeed its not too difficult to think of examples in our own industry where this is the case.
Note : This piece first appeared as my column in Harpers.co.uk though I have added a postscript.
I have always been a firm supporter of generic marketing. I’ve chaired importer committees and worked on developing regional strategies. I know how difficult it is to secure an appropriate level of agreement, across the producer and distributor base, to plans with real cut through, and I know how powerful a well coordinated generic effort can be. I also appreciate that coming up with innovative plans is particularly difficult currently when budgets are severely constrained. Given all this and given that generic marketers have no direct control over the producers and wines they represent, I tend to believe that they have one of the most difficult roles in our industry. All this makes me loth to criticise any generic activity.
However, I have to say that increasingly I have a problem with generic tastings, not in principle but in terms of how they tend to be executed.
My problem was perfectly demonstrated at the Beautiful South tasting last week. I had applauded the lateral thinking at the root of this event, the idea of bringing together three competing southern hemisphere producing countries and I applauded the quality of the pre- publicity. It deserved every success.
Beer has come a long way in the last decade. Now it’s brimming with premium artisanal products, and wine marketers should take note
Back in 2007 I was asked to speak at a couple of UK brewers’ conferences and to discuss what the beer category might learn from wine. It sounded an interesting topic so I readily accepted but without, I admit, giving the subject too much thought. As the date grew closer, nothing obvious came to mind. It was very easy to list all that wine could learn from beer … but that was hardly the point.
It was only when I pondered why someone in the beer category might think it worth asking a wine person for advice that I got close to having anything useful to say. Anyone who had been in brewing for the last forty years, I realised, would have witnessed the metamorphosis of wine from a rather arcane and elitist category into one that had a larger “share of throat” (and of the retailer shelf) than beer. Crucially, it remained significantly more aspirational. Wine had gone mainstream but remained relatively upmarket, and had a price spectrum that most other categories would die for.
Yet at the same time they would also have seen no great evidence of consumer-oriented marketing, and certainly little evidence of branding as beer professionals would understand it. It would all appear, as a generalisation, extraordinarily haphazard, whimsical and no doubt rather perplexing.
Perhaps they assumed I might be able to let them into a secret: the reality behind this perception. Surely such great success must be the result of some extraordinarily cunning plan, or collection of plans, which I might be prepared to share?
The importance of self-regulation
In a recent Harpers (Sept 6th) Miles Beale, the CEO of the WSTA, set out “a series of fresh challenges to the drinks industry following the success of its campaign to prevent the introduction of minimum unit pricing on alcohol”. He urged the industry not to “rest on its laurels” and to be more “innovative and responsive” to the challenges we face. The industry must prepare itself, he added, for a ban on below-cost selling, at the rate of duty plus VAT, which is likely to be introduced by the government within the next year.
Not all wine can be fine wine – so our marketing shouldn’t pretend that it is
In a recent Harpers (July18) there is an interview with Adam Boita of Pernod Ricard on the recent launch of the limited edition Absolut Unique. He notes that this is probably “the first time a drinks manufacturer has ever been able to produce 4 million uniquely numbered individually artistic bottles on a production line”. Just think about that for a minute: 4 million uniquely packaged bottles.
As a wine man, I noticed something missing in the article. Not only was no mention made of the product within the beautifully designed bottles, but even the word “vodka” made no appearance in the 1,000-word piece. Now that is what I call an icon brand. We don’t need to be reminded that Absolut is a premium vodka, or indeed a vodka at all, because that is already our perception. More generally, the assumption is that the target market for Absolut is likely to be more engaged by investment in unique bottles than anyone banging on about how it is produced or tastes.
Now let’s turn to wine, and a piece in The Drinks Business (July 25) entitled “Liquid dreams: the Lafites of the future”. A quote from Lily Dimitriou of Tsantali Vineyards sets the scene. “Luxury brands combine craftsmanship, attention to detail, pedigree and paucity, allowing the buyer to become the owner of an exclusive experience”. Fair enough: yet tucked away in this statement we can observe a crucial difference between the marketing of many premium wines and that of spirits.
Would a free-for-all on vine planting within the EU allow European producers more scope to compete, or simply make the economics of wine even less attractive?
Amongst all the macro issues likely to affect the UK wine sector over the next 10 years or so, one of the most important could be the new EU planting regime that comes into effect in January 2016. In summary, countries within the EU will be allowed to increase their area under vine by up to 1% per year until 2030 when the regime will be reviewed.( On a parochial note I should point out that nothing will change for regions such as the UK which have less than 50k hectares of vineyard planted and are not currently subject to any restrictions ).
This brings to an end nearly 40 years of constraints on planting, culminating in a serious grubbing-up initiative, which took 160k hectares out of production between 2009 and 2012. To put this figure in context: although it represented only 4% of area under vine in the EU, it was the equivalent of ripping out all the vineyards in Australia.
The planting restrictions were designed to deal with the issue of chronic oversupply, which has bedevilled our industry for so long, and has been a major factor in keeping prices and profits below a sustainable level.
Sympathy for the “free traders”
Hence the importance of this change, which comes after several years of bitter debate. At one point it looked as if all restrictions on planting might be removed. The arguments for this were actually very strong. Outside the EU there are of course no real constraints. Anyone can plant what they like, and one’s own skills in production and marketing will determine one’s level of success. Thus, it was argued, abolishing restrictions would allow the EU to compete fairly with the rest of the world, while dynamic and successful producers would not be constrained from realising their potential.
The need for evolution, not revolution
In one of his novels, Robert Graves relates the moment the French first landed in what we now know as Canada. They came across a native who was fishing and asked him, in French of course, what the land was called. The response was “Canada”. It was only much later that they found out that “Canada”, in the local dialect, could be loosely translated as “bugger off, I’m fishing”.
This no doubt apocryphal tale came to mind as I caught up with the discussions around the recent article in The Observer entitled “Wine tasting: it’s junk science” and the research conducted by Laithwaites into the flowery language favoured by many wine writers.
There is no doubt that too many people in our business expect consumers to understand the “language of wine”. All too often we resemble the clichéd Englishman who, when he is not getting his message across to Johnny Foreigner, simply turns up the volume. The impression we can give is that the only consumers out there are those that are fascinated by wine speak. But to many consumers, the way we communicate about wine comes across as white noise – and, more importantly, as pretty dull.
( Note: This piece originally appeared as my first column on the new Harpers.co.uk website last week )
I’ve just read “ Antifragile”, Nassim Taleb’s thought provoking sequel to “ Black Swans “. At one point, in a diatribe against large corporations, he writes ‘ have you noticed that whilst corporations sell you junk drinks, artisans sell you cheese and wine’. He goes on to argue that large corporations cannot produce wine and puts forward Wine as the ‘ best argument in favour of the artisanal economy.’
I would suggest that this view would resonate across much of our industry and, indeed, with many consumers. The irony, however, is that his book is essentially about defining a more realistic economic and political doctrine. If he was to study the wine industry in more depth he might well be less convinced that our industry model is either ideal or sustainable.
To me it’s a question of balance. If we were to lose the artisanal flavour of our industry, if we fail to understand the difference between simplification and dumbing down and that the complexity and diversity of our category is not just excess baggage, then we might find that wine’s core appeal becomes significantly diminished.
On the other hand, we need to understand that Taleb is hardly the average consumer. A large number of consumers see wine simply as an alcoholic beverage. And with Beer, Cider, certain Spirits, and fusion drinks, in the ascendancy, the competition is intensifying. We need to understand the implications of being too highbrow and arcane to such consumers and the more general need to engage with different consumers in specific ways. Otherwise, while we may retain our soul, the prognosis for large swathes of our industry is arguably pretty dire.