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Flair + Discipline = Success
d=”standfirst”>France has been badly bruised by New World wine producers, but it is very far from broken. Branded initiatives are becoming increasingly sophisticated, while the UK consumer still has a soft spot for its wine-producing neighbour, says Patrick Schmitt. The English even have a word for it, ‘Bouncebackability’
ACNIELSEN may measure the market, but it gives no accurate indication of the vibe. The figures clambering from their cage-like spreadsheets may exhibit a long-term decline for France, and the natural inference is that consumers are turning their backs on the country as a whole, but talk to the trade, and it appears the enthusiasm for France is very much alive. In fact, the current situation for the buyer and accomplished wine supplier represents an opportunity, not a battle lost. This is because wine drinkers have not taken against France, merely their attention has been drawn in other directions, and by countries and brands with their own problems. France may have been somewhat forgotten, but more importantly, there is no ill feeling.
So yes, France’s share of the UK market has fallen – down to 17.5% in volume and 18.2% in value, according to Hatch Mansfield’s marketing manager, Lynn Murray, “and it carries on, year on year, losing a couple of points”, but the country also represents, “the biggest opportunity of all,” Steve Barton of Brand Phoenix believes. For Barton, the potential lies in French brands, traditionally a key weakness, and one ripe for exploiting. For others, France still offers plenty of possibilities when it comes to more specialist wines. Simon Thorpe of Waitrose records huge growth in French wine sales through the supermarket by not going down the branded route, and he says that Waitrose is refocusing on France and the Old World, because “there lies really interesting small, niche, good quality wine from places people want to discover.”
Nevertheless, the decrease in sales of French wine is widely apparent, and the reasons are many. These include the country’s fragmented supply base, often-limiting wine laws, insufficient marketing efforts and lack of brands, as well as some ongoing quality problems. But these are not the biggest handicaps, Dan Jago of Bibendum says: “France could be the best and most exciting wine producer in the world, but if Australia was doing 50% off that week then France’s sales would look pretty poor. And what is happening is that Australia is doing 50% off every week, one way or another.”
However, Australia’s reliance on price promotion to shift some of its high volume brands has provided a pretty shaky foundation for long-term sustainable and profitgenerating growth, a weakness other countries, including France, could exploit. Here France is in a strong position because it suffers no Common Customs Tariff on its wine, while its proximity to the UK market offers many natural economic advantages. In fact, Barton believes France has a 60p or 70p a case advantage on New World wines.
France also has the advantage of what Murray refers to as subbrands, the regions such as Bordeaux or Chablis that are widely recognised, whatever their reputation. However, the diversity of the country can complicate France’s attempts to promote itself as a single wineproducing entity, and Thorpe believes “it is really important for France to be cohesive in the way it promotes itself. Wine drinkers think, ‘France, Italy or Spain’, they don’t think, ‘I like wines from the north of the Rhône, but not the south’.” As for France’s image as a whole, Brand Phoenix found that the reaction from all focus groups, male and female, was that France equals great wine and great food – “which is a great place to be when you are trying to launch a brand.”
On the other hand, French wine has struggled at the entry level because “it always lacked consistency,” Barton says, “and the one thing all the big brands have got in their armoury is consistency. Blossom Hill is the best example. It sells about 2.5m cases and they are very consistent, year in, year out, and France has never achieved that.” Arguably, too, France has poured too much of its wine into own-label offerings. Barton says: “Australia sells 16m cases in the off-trade and 2m of those are own-label, which means 14m are designated brands – and most of those are controlled by three companies. The result is, the branded offering is very strong and ownlabel is subdued. France, on the other hand, shifted 14.8m cases in 2004 but 45% of those – or 6m to 8m cases – were ownlabel. If you add in exclusive brands, that goes up to almost 60%. Beyond this there’s Piat d’Or, then Chenet, let’s ignore Stowells, so third is French Connection, which does around 280,000 cases. The sixth largest Australian brand, Hardy’s VR, does 1.6m cases a year, it is five times larger [than France’s third largest brand].”
Average prices are also telling. Some 85% of French wine sold in 2004 was below £5, which accounts for 12.1m cases, with 4.5m of those sold between £3 and £4, and 3.6m sold at £3. But Barton, for one, is not pessimistic. In fact, his reading of France’s situation is that “there is a very powerful gap in the market for a French brand”. Hence, last October, Brand Phoenix launched the Renaissance vin de table brand, which has already sold 200,000 cases. Other success stories include Chenet, which has leapt up the brand charts, because, Tim North, UK director of Grands Chais de France says, “the bottle is distinctive. We’ve worked hard to get good commercial blends and we have established a team in the UK to focus on the brand as well.” Furthermore, a new panFrench brand called Charmant is being launched by HwCg, while Waverley is launching Ropiteau, which you can read more about here.
Hew Dalrymple at Waverley says: “In the past 12 to 18 months, several distributors – and it’s mainly driven from the UK – are saying to French suppliers, ‘You’ve got to get your act together’. HwCg have done great stuff with Blason, and No 2 and No 4; Bottle Green have done French Connection; Diageo, in quite a low-key way, have taken on Barton & Guestier, and we have found in Boisset a very flexible French partner. And who has made progress for France in the US? Gallo with Red Bicyclette. The only one really driven from France is Chenet.”
All the same, there are plenty of French wine producers bucking the market trend through a mixture of innovation, consistency and quality-driven products. The UK agent Stratfords has only one Old World client, Domaines Paul Mas from southern France. For Stratfords, the New World is not a geographic definition but an attitude, a spirit of doing business, and Mas, according to Louise Hill at Stratfords, “is trying to make very French wines; ones that are characteristic of the region, but also ones with a palate profile that is appealing for the consumer buying wines between £4.99 and £6.99.”
Louis Jadot is another producer making “interesting distribution gains” according to Murray of Hatch Mansfield, and while Burgundy sales are down in the UK, “we still saw growth in the Jadot brand, because consumers feel it’s a reliable name and Jadot does try to demystify Burgundy a bit.” Also from Burgundy, Louis Latour has done well, Alexander Nall, its managing director, says, “because the way we’ve presented our wines hasn’t changed, while the Ardeche operation has seen us through some bad times. We are also developing an operation in Var, south-east Provence, where we are producing Pinot Noir. It is essential we get that up and running because appellation rules regarding Pinot Noir and Bourgogne Rouge on the same label might change.”
Most UK observers believe that overall, France cannot reverse the decline, and some expect the fall to continue before the situation stabilises. North says: “The market has grown and France has lost sales. I think France can stabilise its share but it’s not going to get up to the amount it had 10 years ago.” Dalrymple says: “Even if France gets its act together tomorrow these are long-term trends and, whatever happens, France’s share in the on and off-trade will go back several percentage points.”
Nevertheless, France does need a cohesive promotion for the country as a whole and there are certainly some valiant attempts being made by the like of Onivins and Sopexa. For example, Sopexa has organised trade campaigns such as the Absolutely Cracking Wines Press tasting and the French Wines Match on-trade competition, as well as the French Wines Awards of Excellence. For consumers, Sopexa organised a strong presence at the Taste of London show in June, while there has been what a spokesman for the generic organisation calls “an exceptional campaign of promotions set up in partnership with the main UK multiples.” This last approach is probably a result of Inter-Rhône’s success with in-store promotions last year, where the generic regional body paid for promotional slots on gondola ends in Britain’s major retailers. Meanwhile, Sopexa has also announced there will be a major consumer campaign taking place in October this year.