Too many producers are over-reliant on generic or varietal success.
Ask anyone in the UK wine trade to name a success story of the last decade and the chances are that Prosecco and New Zealand Sauvignon Blanc would be close to the top of their list.
There is no doubt that both have made a significant impact. There is no arguing with their percentage growth in terms of volume or consumer awareness levels: they are both now major categories in the wine sector. In addition, New Zealand Sauvignon has established itself at well above average prices, whilst Prosecco has achieved a higher status than Cava and is regarded by many as an acceptable alternative to Champagne. No mean achievements.
What intrigues me, however, is whether producers in these regions regard themselves as successful in the UK. Producers, of course, define success in many different ways: one of the fascinations of the wine business being the extent of the variation in people’s success criteria. For example, it is far from being all about money. I entirely accept therefore that one has to be careful when discussing success to define what one means by the word.
However let us make the assumption for the purposes of this piece that financial return (long or short-term) is somewhere near the top of producers’ success criteria. This in turn implies that marketing success must be aligned largely with financial success. After all producers don’t (or at least shouldn’t) indulge in marketing activity which bears little relation to their success criteria. The whole point of marketing is for it to be integral to a producer’s efforts to create or add value, not be some kind of peripheral puff.
So do producers of Prosecco and NZ Sauvignon Blanc regard themselves as successful in the UK?
My question is not rhetorical. While I’m aware, for example, of the financial pressures on NZ producers caused by oversupply and the exchange rate, I have no information on whether Prosecco producers are achieving acceptable returns. However I don’t feel that, as a generality, producers in either category are realising their potential here.
If you were to ask regular consumers in the UK to name individual producer brands, the result would be, I would suggest, rather embarrassing. It would be less so for New Zealand Sauvignon Blanc than for Prosecco, but the list would still be disappointingly low. What this implies is that the marketing is out of balance.
This problem is hardly unique to these two sectors. It applies to a greater or lesser extent across the Old and New World. And it applies to most traditional regions as well as to categories such as Albarino and Argentinean Malbec, which have become niche successes in recent times.
Producers are over-reliant on regions and varietals
The consequences of this can be serious. If one takes Prosecco as an example, the lack of perceived differentiation implies that there is too little encouragement for the average consumer to trade up from the least expensive. Linked with this, I question whether the target consumer can really differentiate in taste terms between a Prosecco at £15 and one at £7. The chances are therefore that the epicentre of Brand Prosecco in price terms is at a lower level than producers would like it to be.
No doubt those of us in the wine business think we can differentiate between mainstream and premium Prosecco, but that isn’t the point. The target consumer is probably not engaged enough even to try. Prosecco is Prosecco. It is very appealing to a large number of consumers, but probably perceived as “one style, one brand”. So why wouldn’t consumers be drawn, as if by a magnet, towards the least expensive?
Maybe Prosecco producers are currently pretty content. After all they have made impressive strides in a very short space of time. Their brand is protected; there is plenty of potential for growth and a strong consumer franchise. However a missing ingredient in the recipe for long-term financial success is, at least in the UK market, individual brand development. They have arguably stolen a march on Cava in every regard but one: where is their equivalent of Freixenet and Codorniu? Or, setting their sights higher, where is their equivalent of Bollinger, Veuve Clicquot et al?
Maybe I’m being too harsh. Prosecco is at a fairly early stage in its journey; maybe serious brand efforts are just around the corner? I do hope so. All I would say, however, is that once brands become entrenched at a particular value it is very difficult to shift them upwards. Prosecco’s very success in consumer terms, and across the trade, as a generic brand may militate against the efforts of individual brands which appear relatively late on the scene at premium prices.
The lessons to be learnt
There is nothing wrong with individual producers working together in their regions to create generic brands, which then attempt to capture the imagination of consumers in international markets. In fact it’s a very good idea and there are plenty of examples of success as defined by consumers … and indeed a few which might possibly satisfy any success criteria one might care to mention.
In general, however, for producers to realise their full potential they need to stand on their own two feet. It is very risky to hide behind, or be largely reliant upon, generic or varietal success. Their particular brand needs to be differentiated so that it is not simply purchased because it is an example of an Argentinean Malbec or a New Zealand Sauvignon Blanc: it should ideally be purchased first and foremost because the consumer engages with it as an individual brand.
In this regard English sparkling wine producers tend to have Champagne as their role model rather than Prosecco, and not simply because it commands a higher price. Champagne has a hierarchy of well developed brands and a relatively powerful generic body which, as part of its function, protects and promotes the Champagne brand.
The complexity of the wine market implies that the overwhelming majority of wine drinkers are looking for navigational aids – and most of them are not prepared to spend nearly as much time searching for such aids as we like to imagine.
For all kinds of reasons regions or varietals often come across as more effective “lighthouses in the fog” than individual brands. This is the reality which we inhabit. However if individual producers simply accept this reality then it surely implies a lack of control over their own destiny. In effect, they are delegating control over their destiny to their region or varietal designation and, as history tells us, regional and varietal success can be transient.
If I was a producer, however proud of my region, I’d be pretty uncomfortable in that position. I’d be even more uncomfortable, indeed extremely frustrated, if I felt I’d been a part of a great success story, as judged by consumers and members of the trade, but had failed to come close to meeting my own success criteria.