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FEATURE: AWARDS – Eyes on the prize

27 October 2006 By db staff writer

Winning a high-profile award will get your wine flying off the shelves. Fionnuala Synnott examines the UK’s fixation with medals and wonders if it’s any different to the US obsession with Parker points

It’s that time of year again, when you cannot seem to move for awards ceremonies. With the Decanter World Wine Awards, the International Wine Challenge and the International Wine and Spirit Competition all announcing their results in quick succession, members of the drinks industry and consumers will be inundated with information from prize-winning producers between now and Christmas. We all enjoy an excuse for a party and these competitions are always surrounded by a certain amount of pomp and glamour, but just how commercially significant are they? In an industry where profit margins are squeezed more and more each year, members of the drinks trade may wonder whether it is worthwhile spending part of their precious marketing budget on entering these numerous competitions.

It seems logical to assume that if so many companies invest time and money entering these awards it is because a win will significantly increase sales of their products, in the way that winning a high-profile literary prize guarantees a slot on bestseller lists. However, few brand managers seem able to demonstrate exactly how much uplift can be expected from winning a medal or a trophy and evidence is largely anecdotal.

Rich rewards?
George Fistonich, founder and MD of the Villa Maria Estate, says, “Whether an award increases sales or not is dependent on the amount of publicity generated by the show organisers. The uplift can therefore vary from a minimal increase to quite a large one, depending on the competition.”

Yet most members of the trade are convinced that a gold medal or trophy win can be the decisive factor for a consumer bewildered by too much choice. Jane Hunter, marketing director for Western Europe at E&J Gallo Winery, says, “Wine is enjoyable but daunting for many consumers, so it is important to give guidance on style and quality whenever possible. If a wine has won a medal or received an accolade, it provides valuable quality assurance and the consumer is more likely to buy it.” Julian Baker, owner of Julian Baker Fine Wines, agrees: “There’s no doubt that consumers look for quality reassurance when buying wine and a medal from a competition can definitely contribute to the decision-making process. They also make members of the trade more interested in the wines.”

Although sales increases are difficult to predict, the results of these competitions can have a tangible commercial effect. Awards are central in some retailers’ strategies as they add stature to their ranges. Winning an accolade can, therefore, be important when it comes to securing a listing or increasing distribution. Guy Young, managing director of HwCg, says, “We succeeded in getting a promotion in Tesco after Blason de Bourgogne Montagny Vieilles Vignes won the IWC French Chardonnay and International Chardonnay trophies. When we won the trophies, we had the volume to promote the wine and were able to get the bottles relabelled and turn them around quickly.”

>Brand boosters
Companies enter these competitions because they feel that a win will be beneficial to their brand, both in the short and the long-term. Jo Maclean, marketing manager at Codorníu UK, which won the most medals for a non-Champagne sparkling wine at this year’s IWC, explains, “This accolade will not only have a direct effect on our sales but will be good for the long-term image of the brand and will raise awareness of Codorníu within the trade. It will also be good for the cava category, which has been blighted by discounting and needs to have value added to it.”

In fact, competitions can be excellent for raising awareness of different wine categories or even grape varieties. Raúl Katz, commercial manager for Viña La Rosa, says, “The Chilean Trophy won by La Capitana Carmenère 2005 in this year’s IWC was exciting because a Carmenère scooped the highest prize. This is interesting for us since Carmenère is Chile’s signature grape. The trophy has helped the Chilean category as a whole and has reminded consumers that our terroir, Peumo, in the Cachapoal Valley, is once again providing the world with very unique wines.”

According to Katz, an award can only boost sales if you do your homework correctly and take the steps needed to communicate the value and differentiation that your product offers to your customers and consumers. He adds, “A gold medal will help you boost sales if you are proactive and communicate the message to the market.”

Shout about it
Regardless of whether you think these awards are worth entering, one thing is clear, if nobody knows your wine is a gold medallist then participating in a competition really will have been a waste of time. From internal newsletters to clients, media releases that target consumer or trade journalists, shelf barkers at prominent sales points or advertisements in specialised media, there are many ways of communicating your competition win.

Some of these methods can be expensive, however. For instance, very few wine producers can afford to advertise. But there are other, less expensive ways of alerting the trade to your win than advertising. Maclean says, “In order
to optimise our win we will be telling every Matthew Clark [exclusive agent for NV Cordoníu Penedès Brut Anna de Codorníu] sales person about it.”

Relabelling your wines in order to put a medal on the bottle may incur some cost but, according to Lorne Gray, marketing controller, wines at John E Fells, the UK agent for Torres, it is worth doing. He explains, “The point of sale is the most important area to target. Medals on the labels, and shelf barkers or collarettes are the most effective ways of promoting your win. In the case of a shelf barker, you could be looking at an uplift of 300% or more – it depends on the wine. Retailers are also becoming more creative and are putting together award-winning boxes.”

In fact, retailers are often prepared to spend money promoting the award-winning wines in their range. Jonathan Evans, MD at Summit, the UK promotions agency for the Conseil Interprofessionnel du Vin de Bordeaux, says, “All retailers use medals from the better wine awards in their communications with consumers, often at some cost to themselves. Shelf communications for a medium-sized retail chain, for example, can cost as much as £2,000-3,000.” According to Evans, this investment on behalf of the retailer proves how important these competitions can be commercially.

Size matters
Obviously, the more wine you have to sell, the more cost-effective the competition process will be. Codorníu’s Maclean says, “You have to be strategic when entering these competitions and enter wines that are either in good distribution or are winery icons.” Young at HwCg agrees, saying, “This is an investment I wouldn’t choose to make if I only had 40 cases of back vintage to sell.” It is important to bear the vintage in mind when entering a competition because, by the time the results are announced, that particular vintage rotation may be coming to an end.

But Evans still thinks it’s worth entering even if you have only small volumes of the wine available. He says, “If you only have 1,000 cases to sell per year, the only factors that can affect the commercial outcome of your business are the rate of sale and the price at which you sell your wine. If you win a medal, your wine is less likely to be discounted and consumer confidence, and therefore the rate of sale, will be higher.”

Although it makes sense to select the right wine for the right competition, making wines with the sole intention of winning a competition may be a step too far. Trophy hunters tend to make blockbuster wines with high alcohol and high tannins that are not always suitable for everyday drinking. Evans says, “The market has to come first, not the competition. The style should suit the UK palate in the first instance.” Villa Maria’s Fistonich says, “There is no direct relationship between our winemaking objectives and competitions. We believe that if winemakers and viticulturists strive to make good wine for the consumer the accolades will follow.”

Market matters
Just as different markets react differently to wine reviews, they also react differently to medals and prizes. A medal is therefore more of an advantage in some markets than in others. Other factors that decide the importance of the win include the type of medal won, the contest in which it was awarded, the wine that received it and the market where the wine is sold.

Viña la Rosa’s Katz comments, “Our trophy did make a difference in the UK and the Netherlands, countries where consumers tend to consider wine contest results in their purchase decisions. Although it was also perceived as a plus in the US market, it wasn’t as decisive as in Europe.”

In fact, consumers in the US tend to be more points-oriented than competition-focused and will buy wines that have been given over 90 points by a handful of respected wine critics such as Robert Parker, James Molesworth from the Wine Spectator or Michael Schachner from the Wine Enthusiast. Katz adds, “In the US, instead of a gold medal, it is the score that counts. The higher the score, the greater the effect it will have on the consumer and the higher the impact on your sales.”

Global appeal
As the UK is one of the main hubs of the wine world, its competitions transcend regionality and have resonance across the world. However, it is also important to enter other national or regional competitions. Maclean at Codorníu says, “We’re selling in 30 or 40 different markets and will enter any big regional or national competitions in those markets in order to build our presence there.” Meanwhile, Hunter thinks that internationally recognised competitions are valuable because of the global platform they provide. “But local success is also very important as consumers naturally identify with medals that they recognise from their home country,” she adds.

With the number of competitions on the increase, some members of the drinks industry are concerned that too many competitions will erode the prestige of winning an award. Italian producer Fratelli Martini, for instance, only enters the main international and national competitions, or those that are universally recognised and whose juries are composed of judges with international standing because there are too many competitions in their export markets to enter them all. Lorne Gray at John E Fells says, “You have to make sure that you don’t dilute the reason for having the awards and keep them as a quality statement. Three competitions is more than enough for one market.”

Judgement call
But for Maclean proliferation is not so much an issue as the way the competition is run. She says, “In order for the results to be credible, the competition has to be well-organised. For instance, this year, the IWC re-tasted a lot more wines and these wines were reinstated by the co-chairman if he felt that they were medal-worthy.” The IWC is aware of the importance of maintaining its credibility. Mike Florence, one of the organisers of the IWC, says, “Transparency is absolutely vital and has been a key focus since William Reed took over last year.” He adds, “Before this year’s competition, we analysed our panel of tasters and promoted and demoted them where necessary. Consequently, the standard of the medals was higher this year.”

When Decanter launched its World Wine Awards three years ago, it was aware of the need to get its judging process absolutely right as people were already jaded by the number of wine competitions in the market. Catherine Woods, marketing manager at Decanter, explains, “We wanted to do something different by reflecting where wine comes from. Because we assess wines by region, it means that the wines are judged on a level playing field and a light, delicate wine is not compared to a New World fruit bomb.” The Decanter judging panel is made up of regional experts, who are not only able to make a quality assessment about a particular wine but are also able to judge whether it reflects the style of the region. The awards are also judged by price bracket, which makes them a useful reference tool for consumers. Transparency and organisation are crucial. “In our system, absolutely everything is tracked. We are happy for everyone to see their tasting notes if they don’t win a medal”, adds Woods.

Added benefits

Although the main motivation for entering these awards is commercial, there are other fringe benefits. These competitions serve as a snapshot of the wine world and an overview of the quality and styles of wine available in the market. If this information can be distilled, the feedback may be helpful to producers.

Maclean says, “These competitions end up amassing a huge amount of data. The IWC judges over 9,000 wines this year, which means that the organisers can collate a mass of information on technical issues such as TCA.” At the time of going to press, the IWC was about to publish Sam Harrop MW’s findings on closure-related and chemical-related faults as well as those related to uncontrolled microbiological activity (Harrop will take over as chairman of the IWC next year). The IWC’s Florence says, “If we can help the trade to have a better understanding of wine faults then so much the better.”

Awards and accolades are not just for selling wines. They underline to the industry the winery’s overall commitment to quality and provide feedback to winemakers and the company as a whole on how the wines are being received. Fistonich says, “Our cost of entering wine shows is divided between our marketing and winemaking budgets. We know that the knowledge gained by our viticulturists and winemakers through participation and exposure to wine shows has a beneficial effect in continually raising wine quality and standards for both the New Zealand wine industry and Villa Maria.”

Meanwhile, Hunter sees these awards as a useful opportunity to benchmark E&J’s portfolio against other producers’ and to understand which styles of wines are popular within a specific region.

The IWC, the Decanter World Wine Awards and the IWSC are clearly taken seriously by the industry. A spokesperson for Fratelli Martini, whose Canti Chardonnay Pinot Grigio won the IWC Great Value White Wine of the Year award in 2005, comments, “An award becomes part of the institutional advertisement of a wine, which makes it gain in prestige and distinguishes it from other wines on the market.”

Although the commercial significance of the results is difficult to quantify, anecdotal evidence indicates that the right medal in the right market can make a difference, both to wine producers and retailers. As long as these competitions maintain their credibility it is likely that the number of entrants will grow each year, making a medal or trophy win even more prestigious.