Should wine writers put a well-aimed boot in when necessary?
Back in 2006 I wrote a piece in Off Licence News following the publication of The Complete Polysyllabic Spree, a book by Nick Hornby on books and reading. In it he expressed his concern that too many people are put off reading because it is promoted as something you should do to improve yourself rather than as something to enjoy.
He criticised promoters of books for perpetuating the perceived divide in many people’s minds between “trashy” and “worthwhile”, which simply discourages the readers of so-called trash from broadening their choice. The task within the book industry he saw as making “worthwhile” books more accessible by promoting the pleasure they can bring.
There are clear parallels with wine in the above, but I focused on what was possibly Hornby’s most controversial suggestion. This was that book critics should not criticise books: they should either say something positive or say nothing at all.
This came to mind as I read Tim Atkin’s recent column in OLN (April 5th), “We must not pull our punches”, in which he reviews the role of the wine journalist in the UK market. He concludes that “most wine journalism is uncontroversial stuff” and that “the relationship between wine writers on the one hand and producers, importers and retailers on the other is too cosy”. He goes on to argue that “real wine writing should do more than simply review bottles. To put it bluntly, it should inform, engage, enthuse and, on occasion, upset.”
The dynamics of running the UK subsidiary of an international producer .
Sometime in the late 1500s the Duke of Alba, who was attempting to govern the Netherlands on behalf of Spain, wrote in frustration: “If death came in an order from Madrid, we would all be immortal”. Read any book on the development of the British Empire and what may come as a surprise is how so many key decisions – many of which still have repercussions today – were made in the absence of any grand plan from “head office”.
Well, I would suggest that most of those running companies which are subsidiaries of international wine producers are more likely to complain about too much direction as opposed to too little. But either way it is not easy for a parent company (or indeed a central government) to get the balance right.
Too much control from the centre and there is a risk that the subsidiary loses the flexibility it requires to realise its full potential in the market. Too little control, and one loses the synergies, and puts at risk the global strategy.
One of the key reasons that producers set up subsidiaries is to control the approach to a particular market, so it stands to reason that they will err on the side of too much control rather than too little. But in my experience at IDV (now Diageo), Southcorp and Vincor there is a remarkable variation in the philosophies of international companies when it comes to how much flexibility is given to the regional team.
Why wine based beverages could solve several problems at once for the wine category.
In a recent edition of Off Licence News (8th March) Steve Barton of Brand Phoenix predicts that the UK wine market will fall by a further 9 million cases over the next three years, implying a continuation of the trend of the last couple of years. He believes that consumers will continue to be driven out of the market as the average price in the off-trade moves to £5 and above. He may well be right. The key question is, should we care?
How many wine producers make an acceptable return by selling wine to the UK off-trade to hit a price point of £5? With duty and VAT taking out not far short of £3 a bottle, and retailers accounting for close to £1.50, it’s hardly an attractive proposition.
Producers can look to make cost savings by moving bottling around, or by changing sourcing. But the inexorable rise in duty – and, no doubt, retailer margins, as well as general cost increases – suggests that this is hardly a long-term solution.
There is surely no question that the under-£5 segment, which currently accounts for around 50% of the off-trade, is close to becoming non-viable for suppliers with a standard wine portfolio. The only possible exceptions are large producers with substantial economies of scale, or those producers with radically different success criteria.
Ask yourself the question: if this market didn’t exist currently, would producers and distributors be targeting it if it suddenly emerged? Are consumers who are not prepared to pay £5 for a bottle of wine worth bothering with? On the face of it, the answer would appear to be “no”. However I would suggest it’s a much more complex issue than that.
The search for the elusive sweet spot
Much consumer research into wine purchasing patterns notes that the majority of consumers find the experience of buying wine in supermarkets quite stressful, unless they know exactly what they are intending to purchase. There are constant references to “the wall of wine”.
Yet any experiment to date by the supermarkets which has involved reducing their range below, say, 100 lines, has failed. Not only were sales lost, but the operators found their credibility as wine retailers was threatened. This implies that on some level consumers are attracted to the very cause of their apprehension. Hence the paradox.
This paradox is not unique to wine, but given the relative complexity of our category it probably implies that the process of discovering the sweet spot – that point on the spectrum positioned perfectly between losing significant credibility and having too many lines – is more complex than most other categories.
I say probably, because I really don’t know. My experience in wine retailing was very brief and not exactly successful (viz the Destination Wine Company). I soon retreated to the dark side.