Innovation and wine sales

Wine consumption in Europe is falling, and wine companies need to find innovative ways to market their wine. For publication in the week starting 23 July 2018.

Global wine production last year dropped to its lowest level in 60 years, according to figures from the International Organisation of Vine and Wine (OIV). The OIV said wine production was 250 million hectolitres (mhl). Of that 243 mhl of that was consumed.

The previous lowest production level was in 1957, when volume was 173.8 mhl, the OIV said. Consumption in European countries that historically embrace wine – France, Italy and Spain – continued to decline.

Given that wine is mostly a luxury product, this week’s column proposes innovative and creative ways to market wine. It offers a synthesis of interesting and worthwhile ideas this columnist has encountered over the past few years.

Many traditional marketing methods are safe, but boring. This column offers new ideas and possibilities, though it should be noted these are random thoughts and are not presented in any order of priority or importance.

Many benefits occur from having your wine or wine region associated with something or somebody in what I call the “fame” business. Probably the best-known examples in recent years are the impact of the movie Sideways on pinot noir sales in California, or the influence the film Judgement of Paris had in making people aware of wines from that state.

Another aspect of fame is getting endorsements from well-known individuals. This does not need to be through advertising, such as the way George Clooney promotes a certain kind of coffee capsule. It can simply be the way that wines can be associated with certain famous individuals. Rosé in Provence has benefitted from movie actors who have bought estates in the region and this style of wine has flourished through association.

The wines of Gerard Bertrand Wines in the Languedoc region of southern France have certainly been helped by the fact that Bertrand is a former captain of the French rugby team.

It would be safe to say that the wine business has been slow in embracing the power of digital technologies. These include e-commerce, social media and mobile phones. In China, the e-commerce site YesMyWIne.com regularly sells an average of 125,000 bottles a day, and upwards of 500,000 bottles a day in the lead-up to holidays like Chinese New Year. They know how to use the power of e-commerce.

Elsewhere in China, one in four of all bottles of wine sold in the country go through Tmall, part of the huge Alibaba Group. In China 500 million people buy online, and 61 per cent of those sales are via the mobile phone.

In Australia, Treasury Wine Estates has used augmented reality (AR) to market the 19 Crimes label. The project is believed to be a world first in the application of AR for wine marketing. After downloading the app people point their mobile’s camera at the label. The face of a convict on the label comes to life and tells a story.

The Better Retailing site reported late last year that the brand had grown 60 per cent in volume sales and 70 per cent in value in the previous year. More than one million cases were sold last year in the United States, after the app launched there six months earlier.

Wine marketers especially need to think also about the power of the mobile phone.

Technology can be used to generate creative ways to use traditional media such as magazines to market wine. In France some companies are exploring links with new technologies like “sniff” tags on bottles that allow consumers to smell the contents inside.

It is a truism in advertising that sex sells. But we also need to appreciate the influence of authority figures in certain cultures. Using sex requires us to be discreet and subtle. With authority figures it is vital to design things like labels for the appropriate audience.

In China, a company in Ningbo experimented with selling the same wine in the same shop with two different labels. One wine sold five times as many as the other. Why? Because it had an “authority figure” on the label – in this case it was the head of a Pope on an Italian red.

Another factor to consider is the audience to whom you are selling. Some consumers want to be associated with wines that have a reputation for helping the planet. Numerous research studies show that the Millennial generation – those born between the early 1980s and the early 2000s – will buy products they believe help humanity.

If this is the case with your estate, think about things like corporate social responsibility. Lots of examples can be found in South Africa where vineyards are leading the world in sustainability. Backsberg Estate was the first carbon-neutral vineyard in South Africa. Carbon neutral means the total amount of carbon dioxide or carbon compounds the estate releases into the atmosphere is either reduced to zero or balanced by actions to reduce those emissions.

Owner Michael Back instigated the carbon neutral project in 2006. He received recognition for sustainable winemaking at the annual Green Awards organised by the drinks business magazine in 2015, which greatly enhanced the estate’s reputation.

The Simonsig Estate, in the Stellenbosch winelands about 45km east of Cape Town, has embraced a unique form of corporate responsibility, though it does not publicise this action. Simonsig has built a crèche and school on the estate for farm workers’ children, as well as providing houses for 260 staff.

In South Africa two thirds of vineyard workers are seasonal, and permanent accommodation is rare. About two thirds of the Simonsig workforce live permanently on the farm, and Simonsig employs five teachers at the crèche and school.

Another way to entice people to buy your wine is via creative ways to generate a sense of uniqueness and desire. Perhaps partner with Italian painter Elisabetta Rogai who paints with wine instead of conventional colours and has made a range of Tuscan wines world famous.

The key question to ask is how to make your wine unique, or what is unique about your wine. What is its unique selling point? An example would be the way the world’s most northerly vineyard, Lerkekåsa Vineyard near Gvarv in Norway, has become successful through a combination of innovation, a unique site and good wines. It attracts visitors to sleep in the large barrels in its vineyard. They had a waiting list of more than a year when I visited in 2016.

We live in an increasingly visual world, and wine companies need to explore the power of images and video. Imagine the power of a video showing the beauty of your vineyard from the skies, using drone footage. Get your message to the world on your web site via video interviews instead of text. Promote your labels with powerful images.

Words: 1,050

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