The implications of valuing inconsistency
My previous post ( Black Tower, Riesling and bananas ) discussed the difficulties wine marketers face given that most consumers tend to view varietals as brands.
However, as some of the comments on that post emphasised, the varietal conundrum is hardly the only complication in the field of wine branding. The focus of this post is regional or appellation branding.
The regional brand conundrum
One definition of a brand I use in the WSET Diploma Marketing Course is by Professor Philip Kotler, “A brand is a name, term, symbol or design, or a combination of these, intended to identify the goods or services of one seller, or group of sellers, and to differentiate them from those of competitors”. The italics are mine.
I use this definition to point out that, where producers in a wine-producing region get together to protect their proposition in law and then to promote their wines, they are effectively operating as a collective brand owner. This is hardly a controversial claim. We talk widely about “Brand” Australia, Chile or New Zealand et al, and over the years have lauded the success of the bodies promoting Rioja, Cotes du Rhone and others. Generic, or regional, brand promotion is right at the heart of the wine category.
Most consumers see regions and appellations as brands. They represent names that are part of the intricate (and extraordinarily confusing ) mosaic of images, status symbols and promises of performance that make up the wine category in their minds. The role of this element of the brand mix therefore appears to be relatively straightforward.
But regional branding I view as a more complex issue than varietal branding and it is equally influential I believe in our failure to persuade enough consumers to trade up
Some argue that regional brands are not true brands. Certainly there is ownership (albeit collective); certainly there are generic promotional initiatives; and some regions have a very strong consumer franchise. But they all lack, to a greater or lesser extent, a key facet of true brands: consistency.
Any generic marketer has a fundamental problem. They have no real control over key elements of the marketing mix. They can’t control directly how “their” wines are presented, how they are priced or individually promoted and, crucially, they can’t control the quality of the wine. Thus the consumer proposition is inevitably inconsistent where it really matters – at the point of purchase.
The overall promotional theme may be creative and impactful (consider Cotes du Rhone as an example) but the “brand manager” has no control over the range that the consumer may then be persuaded to go out and buy. It’s highly unlikely that all Cotes du Rhones will live up to the expectations generated by the generic promotion. There will be significant variability in price, quality and even style.
All brand success, of course, is ultimately dependent on meeting the consumer expectations generated by their promotion. With all brands there is the risk that there will be a disconnect, but with a generic brand any disconnect is more complicated – particularly if the odd bad experience is coupled with a few good ones.
The level of potential disconnect varies significantly across wine regions and appellations. In fact to define inconsistency in a generic context risks over-simplifying. Some regions have a very broad proposition in terms of style of wine, yet there may be a fair level of consistency of quality at every level of segmentation (eg Australia or Chile). Other regions may have much tighter propositions but be far more inconsistent (eg Burgundy or Chianti).
It is an extraordinarily complex picture. As a generalisation, however, I would argue that there is much more inconsistency in Europe than elsewhere given the different structure of the industry. And this inconsistency is to some extent apparent across all price points and all styles of wine.
Inconsistency: a strength or a weakness?
There is, however, an added complication inherent in regional brands, which is where it gets really interesting. To the wine purist, and large elements of the trade, there is a strong link between inconsistency and perceived status. The opposite I believe is also often true; consistency (that key facet of a true brand) is seen to detract value as it smacks, consciously or subconsciously, of industrialisation or perhaps that the winemaker is under the control of the dreaded marketing person. This perception, this ‘warts and all’ love of the artisanal, continues to have a profound effect on our industry.
Clearly, inconsistency is only a problem if the target market finds it a problem. And in this regard we can divide the wine category very broadly into three categories.
At the top we have the wine trade and wine aficionados, who not only tend to accept inconsistency but often revel in it. No criticism is implied as I write this. It doesn’t mean they (or perhaps I should say “we”) enjoy the occasional duff wine or unpleasant surprise. It just means that we’re prepared to tolerate inconsistency as we explore the rich diversity of producers, styles and winemaking ethos. When you add terroir and vintage variation into the mix it is pretty clear that consistency in a marketing sense – ie a brand that tastes the same every time – can have no real place in this proposition. To this group, wine purchasing represents an unending quest for stand-out producers and new experiences.
At the other end of the spectrum are consumers who treat wine as an alcoholic beverage. Some may develop a desire to develop a deeper understanding of the product but we should not assume this is inevitable. This consumer demands consistency: it is a prerequisite of purchase. To them the wine category is a minefield. The way to get through to this group, as I’ve argued before, is to develop brands that specifically appeal to them; brands that may not even be labelled as wine (see ‘The lost consumers. Am I bothered? ‘ April 2013)
In between these two groups lies a segment that can be subdivided into countless subgroups. For the purposes of this piece, however, I am defining them as consumers who drink wine regularly, have at least a mild interest in wine, occasionally trade up and could be persuaded to do so far more often. It could easily be argued that they represent the future of the wine category, or at least its premium segment.
To risk the most sweeping of generalisations, for years wine tended to be promoted to this group as if we expected them to buy into its diversity and inconsistency whenever they sought to get beyond first base. It was like asking someone who had never holidayed outside Blackpool to spend their next summer climbing the Matterhorn.
Varietals: the package holidays of the wine category
And then along come the Australians in the 90s with the wine industry’s equivalent of package holidays in Spain or Greece: the varietal. At last, many consumers said, we not only have less complicated propositions and labels to get our heads around, but we have more consistency of product.
This trend has gathered momentum ever since. First there was Chardonnay and Shiraz, and then Pinot Grigio and Sauvignon Blanc. Now we have niche players such as Malbec and Albarino, while astute regions (such as New Zealand or Argentina) have latched on to, or helped create, varietal success to develop their own brands.
Yet, as I’ve noted, placing varietals at the centre of one’s marketing is a risky strategy for a region or producer. If there is a broad price spectrum ( which is generally the case ) or some producers need to discount ( as inevitably happens ), then consumers with no real reason to buy a particular brand will tend to trade down to the cheapest acceptable example of that varietal (as happened with NZ Sauvignon Blanc a few years ago).
Being on the horns of a dilemma
So as wine producers we are on the horns of a dilemma. The type of brand that to the consumer seems to best cut through the complexity and inconsistency of the category is the type of brand over which we have the least control – the varietal.
Conversely the type of brand that gives us the greatest control, our own brand, tends to be submerged in a varietal and regional quicksand. And this quicksand is proliferating at a remarkable rate. It’s fuelled by regional initiatives and exacerbated by the major retailers’ tendency to stamp their own brand on regional or varietal propositions: a tendency which makes perfect sense from their perspective but further emasculates individual brand owners.
So while we criticize such brand owners for their lack of inspirational marketing, for their lack of individualism in their branding, it is not exactly easy to swim against this tide. A tide that is gathering momentum.
The consumer, of course, is uncaring of these internal issues. The more confident ones indeed have never had it so good – more variety, better value . However one thing is certain: when most consumers do trade up they do so with far more trepidation than should be the case. Too many, however, are probably not bothering.
So the individual brand owner is caught between varietals and regions, the Scylla and Charybdis of the wine world in branding terms, and it’s a dangerous place to be. If they over-rely on a varietal designation they water down their individual franchise. And, if they over-rely on a regional designation, they are at the mercy of the reputation of that region and their neighbours. Either way they lose an element of control over their destiny. And steering a course down the middle, without relying on a regional or varietal crutch, is outside the comfort zone of most producers.
The way forward for regional brands
So what’s the solution in terms of regional branding? Well the idealist in me would put pressure on regions and appellations to clear out the dead wood and increase the quality hurdles. Certainly my advice for anyone involved in developing new appellations would be to reduce the level of potential inconsistency to a minimum and thereby achieve a competitive advantage.
Regions and appellations that add real value should be truly prized and ‘going regional’ makes perfect sense in principle as I argued in my post ‘ Going regional: why the New World should bother’ ( February 2013 ). Provenance, a sense of place, adds a relevant story, and therefore value, to many key consumers. Propositions which therefore combine stand-out individual branding with the halo effect of an esteemed and well promoted appellation or region can be very powerful indeed.
My concern however is that regions and appellations are being introduced without any real thought being given to how the ‘brand’ will be marketed. Producers in such regions may feel good temporarily, but unless such regions have a strong and clearly differentiated consumer proposition – and unless quality can be protected to reduce inconsistency – then all they are doing is adding depth to the quicksand.
excellent analysis as always. see at the IOD at 5pm. cheers. peter