Why Burgundy is in many ways a role model for wine marketers.
In the late 90s, Penfolds launched Yattarna, the “white Grange”, which was a Chardonnay positioned at over £30 a bottle. I was running Southcorp’s European operation at the time and decided to send samples to key buyers for their feedback.
One such buyer set up a comparative tasting and sent me the results. Yattarna had performed acceptably, but I was intrigued by his view of its competitive set, and asked him why it was composed only of New World Chardonnays. He said that consumers saw white Burgundies as a separate proposition, with many not realising they were Chardonnays at all.
I remembered this story as I read Matt Kramer’s recent piece in the Wine Spectator (March 5th), The Seven Habits of Ineffective Wine People. It is a very good read and I empathised with virtually all his criticisms, but I would take issue with his view that Burgundian producers should acknowledge somewhere on the label that a Bourgogne blanc is a Chardonnay.
I accept that there is a material difference between placing Chardonnay prominently on the front label and making an oblique reference on the back, but I can understand the reluctance of many Burgundians to acknowledge the varietal at all.
Why we need a cultural change in the UK Wine Trade.
Some years ago now, a group of Australian cattle farmers became increasingly concerned about declining sales of beef. After some discussion, they decided to employ a swanky advertising agency, and the “Sydney suits” duly arrived in the outback to receive the brief.
But it didn’t take long for the farmers to become frustrated by all the talk about long-term image building, the development of a clear brand positioning statement and all that related marketing “guff”, as they no doubt put it, though almost certainly less politely.
So the suits were sent back to Sydney without the contract, and the farmers decided to come up with a campaign themselves. Not long afterwards, the following strapline was seen on billboards, T-shirts and car stickers: “Eat More Beef You Bastards”.
The story may well be apocryphal, but either way I somehow doubt that the campaign would have paid off. It certainly gets full marks as a call to action, but zero out of ten for giving consumers any reason to increase consumption.
Should wine producers bypass trade customers and sell direct to consumers?
Whilst running Percy Fox, way back in the 1980s, one of our main agencies was Domaine de la Romanée-Conti. Suffice it to say it wasn’t exactly a hard sell. Our task consisted of liaising with the wine press, and allocating the wine to those customers who were likely to position it appropriately – and who were prepared to buy across the range. I can remember wondering at the time why DRC did not simply sell it all from Burgundy, direct to consumers, thereby cutting out two tiers of middlemen: the agents and the fine wine merchants.
This came to mind as I read about Diageo establishing Alexander & James. This is a direct-to-consumer operation for certain of their super premium spirits, which offers, as their spokesman put it, “a white glove end-to-end luxury brand experience”.
Why the pressure is on the leading distributors.
There’s a seminal moment in the film Manhattan when Woody Allen turns to his girlfriend and says: “Relationships are like sharks: they have to move forwards in order to survive. And what we have on our hands, my dear, is a dead shark.”
Well, I’ve always thought that businesses and sharks are pretty similar too in that respect and this came to mind as I read Chris Losh’s recent piece (Just Drinks, February 5 ): The UK: Land of … What’s the Opposite of Plenty. He concludes that a combination of government policy, “buyer parsimony” in the trade, and a consumer who has in effect been trained to buy wine on which there is no profit, means that the middlemen in the UK trade – our distributors and wholesalers – are under so much pressure that the sector could well be “about to enter a tailspin”.
As Chris admits, it’s a familiar refrain, and certainly the doom-merchants in our business have been saying that we have had dead shark syndrome since the turn of the century. He argues, however, that the unrelenting recession – and, more recently the shortage of wine, implying cost increases that many might not be able to pass on – could well represent the tipping point for many such companies. Linked with this, he believes that the trickle of producers reducing their focus on the UK will become a flood.
Let’s assume he his right, and I accept he may be. How do we turn things around? What are the options?