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Premium Branding – At A Premium
d=”standfirst”>Before the London Wine Fair opened it doors, a group of drinks professionals gathered to thrash out the million-dollar question of what, exactly, constitutes a premium brand? Patrick Schmitt reports from The Drinks Business / Wolf Blass seminar
If one remark summed up the message from our seminar, “At a Premium”, it was the opening comment by Anthony Davie, Wolf Blass Wine Estates’ director for the UK and Ireland. “Premium is not so much marketing but what’s in the bottle,” he said, actually quoting fellow speaker and chief winemaker for Wolf Blass, Chris Hatcher. And although it may seem terribly obvious, each panellist – Davie and Hatcher, Budweiser Budvar’s John Harley, or Bruichladdich’s Gordon Wright – made it clear that key to a premium position is a premium product; you simply can’t have the former in the long-term without the latter, however much gold you put on the label.
But before analysing the range of examples to illustrate this point, it’s worth considering how big the premium market actually is. As Charlotte Hey, publisher of The Drinks Businessnoted at the event, as little as 2.5% of wine sales occur in the £6 to £7 sector and fewer than 1% over £8. Even if one defines premium as wines over £5, it accounts for only 8% of the market. But although the sector is small, it is growing, especially with the increased focus on the £5-plus price segment by generic organisations, as well as major producers, who are extending brands up the price ladder.
A prime example of just such a premium brand, one which has managed to position itself at ever higher price points, is Wolf Blass itself. For instance, in Australia, Canada, Ireland, Singapore and Hong Kong Wolf Blass is the number one brand by value share; in the US it is the fastest growing Australian wine brand over US$10, while in the UK it is the fifth largest brand by value in the Australian category and the fastest growing Australian brand. However, as Davie pointed out in the Imagination Gallery’s airy top-floor conference space, over three years ago “the brand stalled”. This sparked a quick and rigorous reaction by Wolf Blass. It repackaged the Eagle Hawk range, began television advertising and a clearly focused public relations campaign and launched the first vintage of the Platinum brand extension. By 2002 Wolf Blass had been named International Winemaker of the Year by the IWSC and the Platinum had been awarded 95 points by Wine Spectator. Further, the one million case mark was struck in Australia. As Hatcher commented, “Quality and imagery are key to getting a brand up and running.”
Continuing the reasons behind the Wolf Blass revival he added, “The wines are approachable when sold, but at the top end they will age. We are not looking for huge vintage variations but drinkability and structure. We are not about soft, sweet wines that are great today and terrible tomorrow, but genuine fruit flavours that go the distance.” Furthermore, Hatcher added on the subject of premium wines, “There are three things you need – great vineyards, a great winery and great winemakers, and there is no doubt the vineyard is the limiting factor. Terroir is critical to wine quality – the difference in the New World is that we use blending across regions to maintain consistency.”
It’s also worth noting that the whole range is under screwcap because “we couldn’t make a wine like this and put it under cork,” as Hatcher put it, “and every bottle is affected by cork – 2% to 5% have TCA but all are modified, the wine extracts flavours from the wood. Screwcap is a perfect, inert seal. Under screwcap we know the wines are not modified by something over which the winemaker has no control,” he added. But the point of this final part of the Wolf Blass story is that it further proves that premium is related to the product, as most consumers don’t associate screwcap with topend wines, in fact, quite the opposite.
Building Budvar
Moving our attention from wine, the seminar switched to beer, where premium, it seems, means something rather different. As John Harley, CEO of Budweiser Budvar UK commented, “The term ‘premium’ for most of you is a completely respectable word for a still worthy concept. Unfortunately, in the beer end of the wood things are a bit different. ‘Premium packaged lager’, for instance, now summons up in my mind a beer category that has turned from something rather elegant into something a little bit seedy.” This Harley blames on, “Big brewing over producing, under pricing and, as a result, degrading the category to a point where it becomes the First Division.” However, a “Premier League”, as he points out, has formed above it – “one of specialist imported beers”.
This he believes is connected to a beer renaissance, in which consumers are searching for the real and authentic. In fact, such a renaissance is not confined to beer, but part of a bigger movement. As he argued, “More and more people like to have their kitchens cratfsmen-built, they go for butcher’s sausages, organic vegetables, personal tailoring … the authentic beer idea is part and parcel of this.” Today, Budweiser Budvar is the UK’s number one imported Czech premium lager and the number three overall premium packaged lager, a position Harley puts down not to marketing – “We only have a measly £1.5m a year to spend on our marketing, advertising, pr and my bar bill” – but the fact that Budweiser Budvar is a “genuine imported premium lager,” and “brewed from natural ingredients and according to a traditional recipe”. Further, the lack of advertising has meant the beer has become a “discovery brand” preserving its “essential mystique”.
Also, it should be noted that Budweiser Budvar has caught the public imagination through its eternal trademark war – “casting us as David in the David v Goliath scenario … heightening the perception of being something special,” according to Harley.
But fundamentally, he argued, the success and premium nature of Budweiser Budvar comes back to the quality and authenticity of the product coupled with an increasing consumer demand for specialist imported beers as people tire of “dull, monolithic brands – Frankenstein-monster creations by number crunchers and marketing men” which bare “no relation to a real beer brewed in a real brewery with real ingredients and according to traditions handed down over centuries”.
Bruichladdich
If you want a tale of the resurgence of a near-forgotten brand with little in the way of funds, then Bruichladdich is a prime example. The Islay single malt was rescued from oblivion by a group of whisky fanatics in 2001. “The distillery was in a sad, dilapidated state, but five months after the purchase it was distilling again,” said Gordon Wright, marketing director for Bruichladdich. “The original Victorian machinery was lovingly renovated by the staff which we took on – many of whom had been laid off back in 1993 [when Bruichladdich was bought by Whyte and Mackay]. As we wanted to control every aspect of the production, warehousing and bottling, we built a bottling facility at the distillery, one of only three in Scotland,” Wright explained.
“Bruichladdich suffered from its perception of being a lightweight Islay against its beefier neighbours, Laphroaig, Lagavulin and Bowmore, whose big, peaty and smoky flavours were what people conceived Islay malts to be,” he went on. “We knew that Bruichladdich was a shining light hiding under the bushel and all we