The importance of branding.
( The following appeared as an Opinion piece in Harpers last month and was followed up by some thoughts on the art of branding which I shall post in the next few days )
A recurring theme of most marketing orientated articles in Harpers is the need for wine producers to develop, and then promote effectively, their individuality: to communicate to the trade and the consumer, hopefully in an inspiring way, what makes them special and separates them from their competition.
This process can be summed up in one word, ‘branding’: a word that can still send shivers of irritation up the spine of too many in our industry. To them the word tends to smack of big corporations or of style over substance, concepts which seem at odds with the artisanal nature of the world of wine.
Few producers of course have the resources to communicate with consumers in the style of sophisticated brand led companies in other sectors, but that is to miss the point. Branding on one level is just about getting the basics right : to define and take note of the competition, to link a product to a target market, to develop a presentation that is likely to appeal to them and to link this to a communication approach that brings one’s wine to life in an exciting and relevant way to the proposed audience.
Why bother ?
When producers suggest to me that if they make ‘good ‘ wine people will find out about it, I respond by questioning why they would take the risk that they might not. Why go to all that trouble in the vineyard and winery to produce a wine that you are proud of and then fail to tell people it exists in a way that makes them want to try it, and then hopefully buy it for the price that you feel it should command? At a fundamental level that is all branding is.
What good branding does is to give you a better chance of securing a higher price than if you had not bothered. The correct price of anything is the price somebody is prepared to pay not what a producer thinks something is worth. Consumers ( and indeed the trade ) need to be persuaded, to be seduced, to have their emotions appealed to. Few of us make rational choices in any category and in a category such as wine, which is hardly a necessity, and where the offering is so diverse, our choices are likely to be even more whimsical.
Branding in essence implies taking control of one’s destiny and, as noted, all producers can do this at a basic level. A wine with an appealing label, with a style relative to the target market and communicated in an engaging way is clearly going to sell more successfully and at a higher price than one which has none of these attributes. There surely can be no argument about that.
Generic or regional branding
However one area no producer has any control over is the activity of their competitors. Linked to this, while individual producers can become involved in developing and protecting the reputation and quality levels of their particular region, how that region is perceived by the wine trade and consumer is inevitably largely outside their control.
The implications of this are often significant. The majority of consumers have little interest in, or real awareness of, regional characteristics but some consumers, particularly those drinking premium wine, will have biases for or against certain regional designations which will affect the fortunes of individual producers. The same is true of the trade. However much buyers may attempt to reward ‘quality’ with appropriate pricing the latter will be affected by the status of the wine’s regional provenance.
As an example, a dynamic producer of Pinot Noir in Bulgaria is unlikely to find it as easy to secure as high a price for their wine as a similar producer in Burgundy even if they come up with a good brand and the wine is judged as of exceptional quality. The reality is that ‘Brand Burgundy’ is stronger than ‘ Brand Bulgaria’
What this all implies, therefore, is that good producers in some regions are at a disadvantage because their national or regional designation is subtracting, as opposed to adding, value. It may be associated in too many minds, rationally or irrationally, with lower quality wine or wine of the ‘wrong’ style for reasons that may, as an example, be due to over-promotion of inexpensive wines at some point in the past ( eg Bulgaria, Beaujolais or even Germany ).
In such cases a producer can of course decide to do nothing and just focus on swimming strongly against the tide relying on force of personality, wine quality and great branding to achieve their objectives. One alternative, or additional option, however,is to work with a few like minded souls to develop a regional identity which if successful distances you from the problem and creates a ‘halo’ effect for your own brand building efforts. This is hardly an easy task and the more producers involved the more difficult it will be to gain a consensus that doesn’t represent too much of a compromise. This is particularly the case given the need for a regional brand to protect its quality and not simply be a guarantee of provenance.
Equally importantly, however, it is pointless going to all this trouble if you then don’t communicate to the trade and the relevant consumer why they should buy into your ‘association’. Which of course comes back to branding. The process may be more complex for regions, given effective branding by committee is never easy, but the thought process or principle is exactly the same as it is for an individual producer
Everything in fact comes back to branding. As an individual producer or as a region in an increasingly crowded and diverse market the trade and the consumer need to be constantly reminded that not only do you exist but that they should purchase your wine as opposed to somebody else’s, and at a profitable price.
Only effective branding, linked to effective production techniques and other basic business skills such as financial and selling expertise, can give a producer or a region the feeling of having at least some control of their own destiny. And its the branding skills which are too often in the wine industry the missing piece of the jigsaw . Without brands a producer is effectively a commodity trader, entirely subject to the vicissitudes of fortune and the broader marketplace in whichever categories they are involved . And in the highly fragmented, extraordinarily competitive and structurally low margin wine industry that is surely a very uncomfortable place to be.
We just had a couple of post graduate students do a full on branding investigation of us for their dissertations. If we get the report Iâll pass it on, but they phoned a large sample of our customers and all sorts. Sam had more to do with it than I did, but I think it says it all, when, by the end, they wanted to get married here!
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That’s great Bob….that’s what’s called getting really engaged with the brand! I look forward to seeing the report.
Hi Mike. Superb post. I’m sharing it through my networks wishing more wineries understand this simple yet critical perspective on wine branding. “Without brands a producer is effectively a commodity trader”.
Thank you Andre, much appreciated. The danger is that on this blog I am preaching to the converted like yourself. The key point is that branding ( or marketing in general ) is not something arcane or mysterious, at least in principle. Actually developing brands with real cut through is of course not easy. Its a skill just like winemaking, or viticulture, but as a producer you have to first of all see the need to acquire skills ( or bring them in from outside ) and too many wineries don’t see to have reached that stage where marketing is concerned. That is the first hurdle that needs to be jumped.
Intellectually your argument has been valid since your and my first days in the wine trade. But you don’t touch on the vital ingredients necessary to creating and building a brand – any brand whether wine, spirits or indeed any consumer product. The one thing I have noticed is that successful brands have invariably been built by people with real passion for their brand, with huge energy to devote to the brand, with a commitment to do anything and everything that it takes to build that brand and an ability to put the brand ahead of their own personal interests. So how many unselfish, passionate, committed and energetic people can you think of in the wine trade just now…???
Thank you Peter…you are most definitely a convert. I agree with what you say ( and appreciate the passion with which you say it ! ), Certainly passion and commitment are vital ingredients of a brand plan. In this post however I’m really arguing an even more basic point, that branding is an essential component of any company wanting to sell to the consumer and make adequate returns. I don’t go into how they should go about it. In my follow up post tomorrow I start on that and your comment could easily be added to my list of maxims
Hi Mike, great post! I think the Douro Boys are a great example where winemakers joined forces to promote their regional wines.
Thanks Eugene. They also appear to be a good example of how to have fun while you are going about it!
Thanks for focussing the spotlight on the basics Mike. This has reminded me to include your (duly attributed) comments in my lectures and presentations.
Hi Philip and thank you. One would think by now that one would not need to cover the basics but I am regularly reminded that it is very necessary. As Sir John Hegarty said, and in a much more forceful way, at the WSTA conference recently there is still such a suspicion of marketing.
Hi Mike. A good, thoughtful piece as ever. I’ll be brief here because I’m writing a post on the same subject that will go online in the next few days. All I would add is to say that the essential problem from which all other problems stem lies in the way that wine is treated as a ‘special subject’ that is immune to the rules that apply to everything else we spend our money on.
People ‘get’ brands, but they are often confused over what is and isn’t a brand. JP Chenet and Blossom Hill and Rioja and Bordeaux Superieur all compete for the same corner of the consumer’s brain. The only difference is that the style, quality, pricing and general strategy of the first two of these are controlled by Grands Chais de France and Diageo respectively, while a producer relying on any but the rarest, most starry regional appellation is even weaker and less influential than an individual player in a football squad. If your team is doing poorly (your comment about Bulgaria being a weak ‘brand’), but you’ve scored a few great goals (establishing your own, more valuable brand) you stand a chance of being bought by a more successful club and becoming part of their brand. No such escape is on offer for a Plovdiv Pinot Noir, however easily it may outclass a run-of-the-mill Pommard.
The Douro Boys are, revealingly, NOT a regional appellation by the way; they’re a club of like-minded individuals. Compare them and their success with the comparative failure of the nearby Ribera del Duero denomination whose wines can be be bought in Spanish supermarkets for less than €3 a bottle.
And yes, Peter, passion does matter, but let’s not get over-romantic about it. I see lots of passion in the wine world – and lots of unrequited love… The real successes are the ones where the passion is matched with a sense of reality. P&G and Unilever have done a great job of channeling the passion of their brand-building teams for a wide range of products. Having recently spent time with the Helfrichs of Grands Chais, they too have seem to have enough passion to spread among a wide range of products, from JP Chenet to ‘Ice’ fizz and single-estate organic Minervois. What they all understand is the need to excite, if not true passion, at least some affection on the part of the consumer.
Thanks Robert. I think we are in agreement. Certainly if a producer has the choice to either promote\develop their own brand or put their focus\money behind a regional or group brand then there is in my view only one answer…you should put yourself first. After all branding is about seeking to control one’s own destiny. Being involved in a group can however create a very positive ‘halo effect’ and where it works is the perfect definition of synergy on a strategic or a tactical level…eg English sparkling wine brands taking a stand at Prowein. Developing strategic synergy is much more complex of course and what seems to happen too often however is that producers over rely, or become over reliant, on their regional brand….it becomes too important in the mix. It becomes in effect a crutch not a halo ( And its not often that one uses those two words in the same sentence ! ).
Ref your comment ref passion, Id assumed that Peter meant marketing passion..as opposed to going through the motions ( the marketing equivalent of painting by numbers ).. which is important. In large companies, in my experience, the Brand Manager is supposed to live and breathe the brand while any reality checks are handled at a higher level. In smaller companies its more complex than that. Actually that’s quite a good subject for a future post. Ultimately, what we can all probably agree on, to take your point Robert, is that branding or consumer marketing must be at the heart of a company’s culture….and that’s rare in the wine business