MARKETING – BRAND STRATEGY: Steady as she grows

Aggressive discounting in the off-trade might produce an upward blip for a trendy wine brand, but this is not the Paternina way of doing things, says Ben Grant In the wine market of the 21st century there appears to be an incredibly zealous drive towards newness. Reinvention and adaptation are constant features of an industry that is firmly focused on meeting the immediate desires of a fickle and restless consumer base. But, as the continuing impressive performance of one of Spain’s most widely known and best-established brands attests, if correctly managed, a wine can still grow volume steadily and engage new consumers without either alienating its core consumers, undermining the values that are integral to its positioning or being forced to compromise on value.

Gradual growth
The brand in question is Paternina. Export director, Carlos Latas, explains that the company has eschewed the temptation to follow fads too closely. Instead, it has generated gradual growth
by making minor tweaks to the product range and supporting them with a more subtle marketing strategy.

The company made the decision some time ago to focus its UK effort on the on-trade because, according to Latas, “We wanted to place our wines in a sector in which Spanish wines are not highly represented.” He continues, “I look at the off-trade and it’s all about driving volume by squeezing margins, so it’s a difficult place to do business.”

For Paternina the on-trade represents a more appropriate arena to focus its business – but it requires a very different strategy to build a brand. As Latas explains, the positive mood of a consumer enjoying time in a restaurant or bar and, crucially, the interaction between sales staff and drinker represents an opportunity to promote the brand name and reinforce its credentials.

Some companies may invest their resources in big budget advertising strategies and various other consumer-facing marketing tools. But for Paternina the objective is to turn every waiter, sommelier or barman who works in a venue selling its products into a fully-fledged brand ambassador, enthused by the brand’s rich heritage and happy to communicate these values and qualities to their customers.

Constant education
In order to achieve this, the company has a dedicated focus on education, and invests a lot of time and resources ensuring that the trade is informed of the values that it seeks to extol. The principle technique adopted to impart this information is regular visits to Paternina’s winery, allowing key trade partners to see the home of the wines and, in so doing, “bring the brand to life”. Once they have this understanding of what the brand is all about, they are willing and able “to educate consumers on our behalf”, says Latas.

Group size of these trips is kept small, with between 10 and 14 guests attending each time, to ensure that each individual gets more from the experience. As well as a general introduction to the brand, Latas explains that “during the visits we hold tastings and dinners where we show how the wines match with certain foods.”

While such activity may not have the same immediate impact as a sudden burst of high-profile advertising, Latas stresses that such short-term gains play no part in Paternina’s strategy. “Every time we organise a winery visit it is a gradual step in building the brand, and when I look at our volume sales I know that we’re moving in the right direction.”

By contrast, Latas argues that those brands that are too focused on driving the bottom line up in the next year, particularly through aggressive off-trade discounting, will fall by the wayside long before Paternina. “Maybe I could knock on the door of the off-trade and sell a million bottles this year, but my brand will soon disappear. I think that some so-called modern wines are actually just ‘fashion wine’, and their consumers have much less loyalty than ours. There must be a reason why the Paternina brand is still alive after a hundred years,” with, he points out, steadily rising sales.

“When I look at the UK market I’m sure that there is definitely potential to build a strong brand in the on-trade,” he explains. “But we have plenty of time, there’s no need to rush and try to do it all too quickly.”

Steady reinvention
Like the wine itself, Latas believes that the key to creating a brand that combines quality and staying power is taking a steady, measured approach. However, this does not mean that he advocates standing still. Quite the contrary, in fact. “The reason that a company like Paternina has been in the market for over a century is because we have been updating the wines constantly; I like to say we are a classic upgraded winery,” says Latas. Some of the latest additions to the range are the limited-edition Clos Reserva and the Clisos Tempranillo.

This measured approach is not likely to catapult the Spanish brand to the top of the sales charts. But, of course, this is simply not the strategy. Through a measured technique of communicating the brand’s rich and colourful history to a gradually expanding group of customer-facing partners, Paternina will continue to steadily grow its business – in a sustainable way.

© db December 2006