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Brand New?
“standfirst”>It takes time and patience to cultivate a ‘true’ brand. In fact, the classics mature rather like fine wine – which is kind of ironic when you consider the wine trade’s unique difficulty in grasping the concept. Roger Brownlie reports
Brand is a divisive word in the wine industry. Few even agree what a brand is, while some doubt if the industry is even capable of producing a “true” brand. Indeed, the largest brand has only about 5% market share. Compared to Apple i-Pod which has 90% of its global market share or Heinz ketchup which has 70%, our brands just aren’t the same. Is this an unfair comparison or is wine branding just a case of wishful thinking?
“I feel there is some way to go yet before brands reach their maximum potential as new users are drawn into the market through brands,” says Lynne Whitaker of Winebrand, a marketing consultancy to the wine industry. “It’s true there are no really dominant brands as there are in other consumer sectors, but this is partly because consumers enjoy experimenting with different wines. Wine brands may be part of the weekly shop these days, but the consumer is unlikely to buy the same each week, as he or she might purchase the same brand of coffee, for instance,” she says. Low brand penetration may be a victory for diversity or a misunderstanding of brand potential but, the question remains whether the industry is even structured properly to exploit the possibilities of big brands. Dominant brands are usually the product of developed, consolidated and consumer-led industry. Does that describe the wine industry? Arguably not.
“I think there is a lack of understanding about what a brand is,” adds Whitaker, “and often an unwillingess or even an inability to make the long-term investment and commitment required for it to succeed.”
Paul Sullivan, marketing manager at Western Wines confides, “The cynic in me has to ask what the definition of a brand is, and how many does the wine trade actually have? Brands sell well but the biggest pitfall is to slap on a label with a nice name and discount it a bit and say, ‘Look, it’s a brand’. This is a mistake.”
As Sullivan says, brands do sell well and there have been some undoubted successes where lessons can be learnt.
“The development of Kumala has been our most successful brand creation,” continues Sullivan. “Kumala has 24% market share of the South African wine category and a 2.7% share of the total offtrade. This has all happened in the last 10 years whereas a number of other brands have been on the market somewhat longer. The decision to start was probably the most critical decision. South Africa wasn’t exactly an attractive offering at the time, having just come out of trade embargo and with shipping, quality and consistency a challenge. The other decision was to produce a ‘brand’ that didn’t follow the mainstream of wine branding, ie named after a person or a place – Blossom Hill, Jacob’s Creek, Hardys, – see a pattern? This has given Kumala the freedom to create its own relationship with consumers and change as the need arises.”
Mind the Gap
Sarah Chilton, marketing manager for Thierry’s Wine Services has two recent launches, Cape Grace, its South African brand, and El Prado, a new Spanish brand about to be launched in Tesco. Behind the labels there is an extensive strategy. “Is there a consumer need, is there a gap in the market and is anyone else fulfilling this need currently?” asks Chilton. “Does the brand match the trade strategy and the needs of the trade? More importantly does the brand that you are creating fulfil this gap, or are we trying to create a consumer need? You must identify both the consumer need and the gap in the marketplace, as the product has to get past the gatekeeper – the buyer – first. With all of our brands that we launch we put them through a rigorous process which enables us to create a strong commercial argument against the background of strong consumer need.”
The objective then, surely, is not to create a brand but to create a commercial outcome usually around building sales, customer loyalty, profit margin or a combination thereof. A brand is the vehicle, merely a means to an end. And these can be based on gaps in the market and evidence of demand. Sounds simple.
“Branding in the wine category is horrendously difficult,” says Sullivan. “Points of difference are hard to come by and many of those that exist require a lot of explanation to the consumer – terroir, etc. Mass market brands also have to have the hygiene factors of reliability, acceptable quality and consistency, but these are not differentiators in the main – variation can be a differentiator in a niche market. A brand needs to have something that adds equity over and above being a bottle of wine – even if it means just an increased propensity to purchase.”
Differentiation has always been an issue for French wines, particularly when there is limited understanding of the vast range of wines coming out of that country. Helen Munday, marketing and PR director, HwCg was faced with this problem. “Blason de Bourgogne has to be up there as one of our best brand developments,” she says. “The brand continues to grow and appears to have successfully filled a gap in the market. Over the last three years, the range has had a marked effect upon the UK Burgundy market. Success can be attributed to a number of different elements, but most important was the research that was put in before and during the brand development. HwCg researched the category, the people shopping the category and the gatekeepers buying for the category.
“One of the criticisms of the Burgundy sector was that it was incomprehensible to the consumer; they didn’t understand the appellations and didn’t have cues to help them explore the wines. By doing something as simple as putting the word ‘Burgundy’ on all the labels Blason created a cue that was understandable and offered assurance. In addition, adding grape varieties to some of the labels allowed consumers to feel they understood what was in the bottle. The use of bronze, silver and gold on the labels also helped to reinforce the ladder system of quality within the range giving consumers a simple visual guide to quality and price.
“Ensuring that you launch the brand at the right price point is vital. It’s necessary to build brand equity before price promoting and if you promote too much you will devalue the brand. Blason sells about 80% off promotion and this, we believe, is one of the reasons why it has been so successful in building brand loyalty.
“We have found that it’s necessary to keep testing the brand through the development stages; focus groups are essential, and you need to listen to what you are being told. If two people tell you the packaging looks cheap it probably does. Ploughing on regardless to meet a deadline will only mean the end result isn’t right.”
Similarly, for Jerry Lockspeiser, managing director of Bottle Green, the critical point in the development of French Connection was analysing why French wines were becoming less popular in relation to New World wines with consumers. “We had to create a French wine brand whose logic appealed to both trade buyers and consumers and ensure that we had understood the problem facing the trade buyer and show that our proposition would solve their own French category problems – which is critical, because if they don’t put it on the shelf, consumers will never see it.”
Power of emotion
One brand that has already proved itself as a phenomenal success story is Yellow Tail, as Libby Nutt, export marketing director, Casella Wines explains. “Yellow Tail developed new benefits that changed both its function and emotional appeal simultaneously. When formulating our strategy we thought first and foremost about the consumer. We set out to make a wine for the consumer, to make it non-elitist and available for a large proportion of people to drink. We have tried to demystify wine.”
Sally Warmington, marketing controller at Allied Domecq Wines UK, has just been through the R&D launch process. “Our latest and extremely exciting new brand launch is Gran Campo Viejo Cava; this is due in-store from end July. The success of this initiative has been based on leveraging market insight and understanding our consumers. This was highlighted while the sparkling market was buoyant – Cava propositions were not succeeding to trade people up within the sector. Our ‘bubbles’ research, however, showed that sparkling wine consumers are relatively price insensitive, and would be comfortable to pay more for a proposition with more aspirational cues that they could trust and connect with.
Image evolution
“Also, over recent years we have seen a trend where strong still wine brands have transferred their franchises into the sparkling sector, but thus far this has not happened within Cava. Campo Viejo translates its strong brand reassurance cues into the sparkling sector. During the development of the product we focused on ensuring that it reflects the core parent brand values; so the front label uses the signature orange colour from our Reserva proposition, along with the brand font, while the back label text talks in the brand tonality and language.”
Launching a brand is one thing but relaunching can be more problematic; balancing the loyalties of existing consumers with demands of the new requires a lighter touch. Liz Stich, export director for Europe and overseas, Reh Kendermann, explains: “Black Tower is a highly successful example of how a brand icon has evolved to meet changing consumer trends and needs. It is the number one new wave German wine brand, having taken third position in the German sector, both in volume and value. Investment in pack design and the creation of innovative wine styles at strategic stages in both brands’ evolution has played a crucial part in ensuring their continued relevance to their individual, clearly defined target consumers.
“The perceived value of a brand is also extremely important. German brands for many years were looked upon as wines that should be cheaper. By over-delivering on wine quality and packaging Kendermann has managed to successfully overcome the hurdle of the £4 barrier. A major pitfall is wine packaging not correctly addressing the right consumer for the wine in the bottle.”
Of the more mature brands, Martin Watts, managing director of Cellar Trends, has worked on the Faustino brand in the UK since 1980, a brand that was not created in the modern marketing sense but evolved out of a traditional family company set-up.
“It is usually a team effort between the sales and marketing teams of the distributor and the marketeers and winemakers of the producer,” he says. “We understand what is physically possible in the winery and we communicate consumer trends to the winemakers there. In 25 years there have been consistent themes in the development of Faustino into one of the few icon wine brands to emerge from Spain.
“Wines marketed under the Faustino label always overdeliver in quality and that quality will be consistent vintage to vintage. The consumers, who recognise the Faustino packaging instantly through its distinctive frosted bottles, yellow labels and portraits, know they can rely on the brand. As such they will pay a premium for it. Faustino has consistently been supported at the consumer level. Initially, it was based on created gift packaging but in recent years, through consumer advertising, we have been working on closely associating Faustino with various foods.”
What classic dominant brands in other industries have in common – Heinz, Apple, Ford, Coca-Cola – is their age. Like wine, ironically, they mature with age, as long as you look after them properly (and as long as about 50% of their smaller competitors somehow go out of business).
Simon Halliday, managing director of Raisin Social, says, “Brand building needs a long-term strategy and a methodical, pragmatic approach. You have to go through a lot of trial and error and sometimes a certain amount of pain. It’s also important to remember that a brand that is successful in one business channel may be completely wrong for another; you really need to know your customers. Research and development are crucial.”
“It takes time to build consumer loyalty,” advises Martin Watts. “For brand recognition, make sure the packaging is both distinctive and memorable. Taste – make sure your product’s quality is consistently high and find ways to get the consumer to taste it and experience it. Support – consistently support the brand at a consumer level.”
So does it come down to support, or in other words, the marketing budget?
“One of most common pitfalls is to ‘launch and leave’ a brand,” warns Sally Warmington. “That is to not fully consider the support package required to make a brand sell once on the market.”
“Marketing spend is always a contentious issue in the wine trade and a battleground between sales and marketing,” says Paul Sullivan. “But neither Rome, nor brands, were built in a day. Look at the attitude, style and single-minded approach that a brand you admire takes in its market, and the way it communicates, and then think about how much they spend.”
“Ensure that the brand has been thoroughly researched against its competitive set, as in the current climate in the wine business there is no room for ‘me too’ products,” says Sarah Chilton. “Ensure also that the brand-to-be has budget available, as without it the brand will be going nowhere.”
Lynne Whitaker’s 10 steps
“One pitfall is not doing your research, especially on the packaging. You do start to develop an instinct for what will work and what won’t, but consumer research is also invaluable in helping to ensure that everything about the offer is right for its target market.”
1. Analyse your market
2. Analyse your own capabilities and aspirations
3. Identify a realistic business strategy
4. Prepare a creative brief
5. Select and brief the right designer for the project
6. Evaluate and develop creative proposals
7. Research the options – with trade and consumer
8. Refine the proposition
9. Develop a launch plan
10. Implement