NB : This is a slightly extended version of a piece which appeared recently on Harpers.co.uk. This is linked to my previous post on regional branding.
At the recent International Sparkling Wine Symposium held at Denbighs I was facilitating a session on the way forward for English fizz and made a throwaway comment that for all its success producers should be wary of seeing Prosecco as a role model. I noted that, while it has certainly captured the imagination of a large swathe of the wine market, I doubted that many consumers can name individual brands or are aware of the difference between DOC and DOCG Prosecco. This implies that they will tend to be drawn to the cheapest Prosecco that they find acceptable. It would be fair to say that my comment was not universally popular with Prosecco producers in the room.
Subsequent to the conference Prosecco sales have soared to new heights with various major retailers reporting astronomic growth over Christmas. So remarkable is the success that some commentators believe that the sparkling wine sector in the UK will never be the same again: a critical mass of consumers have moved on from Champagne and won’t be looking back.
They may well be right but either way I still hold by my concern. Because the consumer is not being given enough encouragement to trade up, returns may well be disappointingly low for too many producers and certainly not commensurate with the success of the category
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For those producers of DOC Prosecco the lack of branding initiatives imply that the consumer will tend to buy whichever brand a retailer is promoting or perhaps an exclusive retailer brand, while for those attempting to sell DOCG Prosecco the issue is even more critical. Unless they are satisfied with very small volumes they are unlikely to be able to recoup the higher costs of production in their selling prices.
More broadly than that I would wager that research would reveal that the majority of consumers are unaware that Prosecco is a protected region and certainly unaware that the word can not be used for pink fizz. If I’m correct then this implies that Prosecco is fast becoming a generic name for Italian fizz of a certain style, whether pink or white. This confusion is likely to be compounded by the increasing promotion of look- a- like wines from both inside and outside the DOC area.
The lessons for other regions and appellations
All this implies to me that there two lessons English sparkling wine producers in particular, and other emerging wine regions in general, should learn from the Prosecco phenomenon
The first is that, in order to realise their full potential, regions and appellations need generic promotion and individual producer brand promotion to be in balance, while the majority of brands should command a clear premium over exclusive retailer labels. Champagne would therefore be a better role model in this regard. I’m a great believer in the development of generic visions and effective generic promotion but this is not nearly enough on its own.
For individual producers controlling one’s own destiny makes sense from all points of view but particularly relevant in this case is that producers who over-rely on regional promotion are inevitably at the mercy of the consumer image of their regional brand. This may in some cases not be a problem but, particularly where there is a broad spectrum of pricing or, at some stage, an excess of supply over demand,which leads to discounting, regional brands risk becoming commoditised. Individual producers need the strength therefore to increase their chances of being sucked into the quicksand.
Secondly, regions will not realise their full potential if, having gone to all the trouble of getting producers together to define and then ‘trademark’ a region, they fail to engage not only the trade but enough relevant consumers in what they are doing. Without doing so their chances of securing the price premium, or other competitive advantages, that their wines may well deserve, are slim. How many consumers understand the added value inherent in the term DOCG, or indeed any other premium acronyms around the world ? The answer is certainly; not nearly enough.
It would surely make sense therefore that when defining regions or appellations in the first place that there was some marketing input. I accept that there must be a winemaking or viticultural raison d’etre at their core : the last thing we need is appellations that come straight out of a marketing brainstorm. But it is surely a question of balance, of considering things holistically, which does not come naturally in a production oriented category such as wine.
For a start it could be useful to have marketing input into how to minimise potential confusion in the trade when an appellation is launched, because if the trade doesn’t clearly understand the proposition then the consumer has no chance. However, it is not enough just to get the trade on your side, even though that is a prerequisite of success: the target consumer must also be engaged. Will they understand the new appellation ? How is it different from anything else on the market ? What is it offering that excites them and might persuade them to pay the prices required ? Is the ‘added value’ that producers perceive relevant to the target consumer ? And, if so, how might it be communicated effectively ?
So I’m afraid I stand by my throwaway line. I applaud Prosecco producers as a collective for their vision, the extraordinary effort involved in protecting their brand and for creating a revolution in the sparkling wine sector. However I would be surprised if very many individual producers, particularly at the premium end, feel either in control of their own destiny or that, currently at least, they are getting appropriate rewards for all their collective effort. And ultimately its how producers feel and perform as individuals that really counts.
PS : As an aside, for anyone interested in working for an English Wine producer I occasionally get asked if I know of people suitable for sales or marketing positions, full or part-time. Just last week I had two such requests. My email address is mikeakpaul@yahoo.co.uk should anyone wish to make contact ( in confidence of course).
the mike paul blog 
Depends on your version of what is “not good” Prosecco… for example – Mionetto Prosecco (now available via Robin Copestick) in the UK – sells for $14 off promo and $10.99 on promo in a large US supermarket. The packaging is fantastic (looks a little like VClicquot with its colours) and for $10 or even $14 it’s fresh, bright, crisp, well made and no-one can complain about it… Again the trade needs to understand that it’s not people going back from Champagne and down… it’s actually people buying sparkly more often as it’s now accessible and wouldn’t we rather they spend 9.99 on a bottle of wine (Prosecco or not) than 5.49 GBP on a bottle of PG???
There needs to be wine at accessible prices for the different consumer groups – some who just want some bubbles to throw a strawberry into a chat with the girls, to the ones who want something like Cremant, up to the Champers peeps…
Thanks Catherine. I’m not making judgements on what is or isn’t ‘good’ Prosecco. I’m saying that if consumers don’t perceive any hierarchy they will be drawn to the cheapest they find acceptable….and acceptable in this context implies a combination of the style and quality of the product itself and the packaging\branding. If you have a look at Proseccos on the shelf those that are higher priced are not necessarily packaged better or, as a general rule, giving the consumer any real reason why they should pay more.
I quite agree that the trade can no doubt make more return on a £10 Prosecco than a £5 Pinot Grigio….Im full of praise for Prosecco generically as I noted. It has shaken up the fizz sector in a positive way and ( as you say ) fuelled the trend towards bubbles.
My concern is simply for individual producers of Prosecco who want to sell at a premium. If you ‘launch’ wines from a specific region within which there are grades of quality ( as perceived by producers at least ), and these grades are reflected in higher production costs, then if you want to recoup these higher production costs you will need to explain to the consumer why they should pay more for the wines at the higher grades. This can be done by developing individual brands and\or by marketing the DOCG.The longer the delay before either happens in a more effective way than currently ( at least in the UK market ) the more difficult it will become. Prosecco as a category assuredly will go from strength to strength: it has so much going for it…that is not my issue.
Imagine if English fizz was available now in large enough quantities for UK retailers to promote it and imagine that brands such as Nyetimber, Camel Valley, Ridgeview and Chapel Down didn’t exist, The retail price positioning would be £19 at best with promotion well below that. Great for the consumer but not for producers with aspirations to do better than that.
Mike, Cava tried to do the things you’re talking about. There are strong brands – Codorniu, Freixenet etc and some v premium-priced examples. In Spain. Has that impinged on UK market? Not at all.
I’d compare Prosecco with NZ Sauvignon: reasonably consistent stylistically. Few real disappointments. Hitting a premium price compared to alternatives (Cava). And cheap to produce.
I find it hard to fault, quite frankly. Yes, most Brits, because they’re cheapskates, want to buy Prosecco at £5, but £15 Prosecco is far more conceivable to a Brit than £15 (or even £12) Cava.
grammar = apologies: “for a chat with the girls”
Thanks Robert. My point in summary is not that Prosecco isn’t successful but that it hasn’t realised its potential. Cava as a category is not as successful as Prosecco but it has major brands which command premiums over secondary brands and own labels. If you could add that element of the mix into Prosecco then the Prosecco category would be healthier in marketing terms. No doubt there are many producers in the DOC Prosecco area who are doing fine while many other producers of ‘Prosecco’ look a likes are also cashing in on the boom but that’s not my point. What about the DOCG producers who have significant volumes to sell and higher costs ? How many people are paying the prices they need?
As someone who works with English Wine producers my generic question is this. Is the average price of English fizz currently acceptable in terms of the return and the image it portrays ? The answer would probably be yes. There are number of reasons for that but a key one is that the scarce resource implies that the main brands have been able to set the prices without interference from retailer exclusive brands. As supply builds the key challenge will be to at the very least maintain that price positioning. With Prosecco, in the UK at least, the pricing has, as a generalisation, been set by retailer exclusive brands which is not surely the healthiest way to build a category. Its great for consumers ( as Catherine argues ) and great for the trade ( booming sales and good margins ) but the danger is that the average price positioning and the relative lack of brand activity does not give those producers of premium Prosecco either the return they need or the return which their collective efforts deserve. Hence my point that English fizz producers should be careful of using Prosecco as a role model. As a general rule categories that kick off with relatively strong producer brands tend to be healthier in the long term than those that don’t ….good essay question that ! Strong brands can of course come along later.. perhaps they will from Prosecco but once a category is a ‘known value item’ and that known value perhaps doesn’t allow margin for appropriate investment in brand building its difficult to establish premium. brands at a later date.
The other point, Mike, which Catherine might comment on, is that you’re in danger of looking at this from a very UK-centric viewpoint. You could equally say that Pinot Grigio is unbranded – and it is in the UK, but not in the US where Sta Margherita is huge. That brand has chosen not to play in the UK because it doesn’t want or need to hit UK price points. Sta Margherita sells a lot of Prosecco in the US at a very respectable $19. Zonin doesn’t do much in the UK but is successful – at $14 – in the US, compared to Cordon Negro and Codorniu Brut at $9. Bisol is pretty invisible in the UK too. In the US, it ‘s big and has labels selling at $30+ A look at the 449 – count ’em – Proseccos in the Wine Enthusiast Buyers Guide (http://buyingguide.winemag.com/varietals/sparkling/prosecco) provides a useful illustration of the growing gap between what is available in the UK and the US – and the dangers, if I may say so, of making any judgements or pronouncements about any wine region from the increasingly irrelevant viewpoint of the British Isl
es.
Robert, my whole piece is based on the position of Prosecco in the UK. It is entirely parochial as I hoped was clear. As you say Prosecco, and many other sectors of the wine market, are in very different, and generally more branded & profitable, positions in the USA. And assuredly some producers are turning away from the UK market but for English sparkling wine producers this is obviously their core market ( however much they may get into export ).Thus the question I’m addressing is whether Prosecco in the UK should be a role model for them.
I’m also making the much more general point that when sub regions or appellations are defined ( as may happen within the UK) it is crucial to consider the consumer proposition as part of the process. I’m suggesting, as an example, that the differences between DOC and DOCG Prosecco are not understood by most consumers in the UK…though I would hazard a guess that the lack of awareness goes wider than that. And this lack of understanding is not confined to these two acronyms of course.
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Mike, I think we should talk about the UK, but at the same time today what was interesting for me was this English gentleman – very well respected in the trade was saying oh well, what do we do about price… and it dawned on us (from our side then and there) how we DON’T make it about price… and so that’s the tack we are going on… we need to stop thinking about the UK in isolation… things can be changed if we change the way we view them and we take different steps and different directions to appeal to, engage with, convert consumers…
I totally agree that we need to work at changing our culture and mind sets through learning from other markets and categories. I would hope that that is a theme running through many of my posts. We shouldn’t just accept that the UK market will always tend to be fixated on price. That’s one of the reasons I like working with English producers. They have established their position at a premium ….Brand England is in quite a special place. The challenge now is to maintain\develop that premium as supply and competition builds. It is about treating English fizz as a luxury brand, as you imply with your Chanel example. Next week Im in Eastern Europe to see producers who have already decided that they are not interested in competing in the mainstream sector of our market…but are wanting to sell here. So the discussion will be around building a proposition that is not price dependent.
A consultant attended a skype conference with me this morning – about a direct to wine website to consumer. The meeting and it’s content was irrelevant, but one thing stood out significantly (he is non wine): he said: “Consumers need to connect with the wine/brand. The winemaker, instead of trying to convince everyone that he is God or that his wines are amazing, should be trying to convince Rob, the consumer, that HE is cool, because HE is drinking that winemaker’s wine. I understand your point Mike, but again it’s going from the trade out…. let the winemakers convince the consumer to buy their products – showing them that their product has added value…. instead of complaining from within and acting from without. If a lady buys a jacket from Chanel, it’s because she feels certain things by doing that and by being seen/associated with it rather than a jacket from Asda own label clothing dept… we really need to start improving that aspect in the wine business.
My whole argument Catherine is saying that regions\appellations need to consider the consumer proposition and not assume consumers will understand terms such as DOC and DOCG and other terminology that producers may think adds value but doesn’t to enough consumers. If we want consumers to trade up we must give them reasons to do so, reasons they can relate to…that’s the whole point of my piece. Otherwise, if they cant see any difference between a less expensive wine and a premium wine they will buy the less expensive one. As an example here, English sparkling wine producers as supply builds will need to ensure that the price differential between their brands and retailer own labels, as they develop, is maintained at an acceptable level by adding value in ways relevant to the consumer
Can we stop using the words trade up and rather talk about adding value…. maybe we should stop “pimping” wine so hard and talk about things people are more interested in and let wine just fall within.
Added value is much more positive I agree…people will only trade up if value has really been added. And I take the ‘pimping’ point too..
The Chinese whom we deride as simple copiers have much to teach us. They are developing wine shops that are – in a Chinese way – like wine versions of Nespresso cafes: experiential places where it’s good to hang out. And they’re working with brand owners in other fields. Wine tastings/fashion shows are apparently more frequent there than in the west.
If I were to be asked for ways to market English wine, I wouldn’t bother with appellations and hierarchies. I’d see how I could collaborate with Burberry and Bentley etc: existing examples of British greatness. But we don’t do {nearly enough of) that kind of thing. We prefer to bang on about chalky soil.
agreed Catherine.
Robert, I very much agree with this and I think you’d be pleasantly surprised by the views of many English producers too. Only last week Camel Valley announced a link up with Terry de Haviland shoes and from what I’m hearing that won’t be the last. Links with high status GB brands in other categories are a key way forward both for domestic and international marketing. What will happen probably will be a combination of both: Camel, for example, have also created a PDO for a single vineyard in Cornwall. This can work, Bob Lindo said recently that wines from there command a noticeable premium, but as you imply quite rightly a great deal of thought must go into the consumer proposition rather than relying on points of difference that only the trade understand or find interesting. And that is the challenge …..and really the sub text of my piece
Robert Joseph, you are not properly informed by saying Zonin doesn’t do much in UK. The turnover of Zonin UK LTD of 2013 was over 21 milion pounds. 70 per cent was regarding Prosecco Doc. Zonin will sell over 8 milion Prosecco bottles in UK this year. I disagree also regarding your compairing Prosecco with NZ Sauvignon. Prosecco should be compaired with products like Espresso, Cappuccino, Pizza…Prosecco is a Habit, a concept. Not a wine…
Thank you Luigi. I stand corrected. As you know I’m a big fan of your company and what it has achieved (I am featuring it in the marketing book I’m writing), but I would still maintain that UK consumer awareness of Prosecco brands – including yours – is poor. (As it is of most wine brands).I also like your suggestion that Prosecco not be treated as a wine, but I wonder how much that has to do with it containing bubbles. You could equally say that Champagne is a habit. My comparison with NZ Sauvignon – or indeed Pinot Grigio – has to do with the reliablility and consistency of these styles: consumers have a fairly clear idea of what they are going to get for their money. This is good for a sector, but not always good for players within that sector because it is too easy to substitute one brand for another when prompted by an attractive discount.
I’d love to discuss this all further with you some day.
Grazie Robert,
Historically Italians have never been good in marketing their products in food and wine sector. I am not expecting we change now. Everybody is producing products generated in Italy like pasta, pizza, mozzarella…and the Prosecco style will probably ends like these other successfull products. Anyway there will remains a few excellent Prosecco producers that will be difficult to copy.