Why Wine is a Marketing Triumph

Posted by Owen Matson, Ph.D. on January 16
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Few Industries create a product that commands a premium like wine.  

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Wine sells for many times the price of beer, which suffers from price-pressure and widely accepted minimally viable product in the plethora of Coors Light, Miller Light, Bud Light options that force downward price pressure on the category. Yes, craft beer people have done a nice job trying to do what wine does, BUT, could you imagine a six pack costing $200?Wine does that no problem. But how?

Wine has completely escaped commoditization and thoroughly educated buyers on its premium differentiators.

 Marketing Wine: Telling the story and making sure it gets heard  

The success of the wine industry lies in effective marketing: Communicating and educating consumers about key differentiators—what makes each wine unique and thus valuable.  They key to this success depends on two imperatives:

  1. Effective, engaging stories that educate consumers about differentiators and lead to valuable experiences.
  2. Effective strategies for making sure these stories are heard.

 Wine’s success reflects the power of “origin stories.”

Wine’s value lies in the stories that inform how consumers perceive and experience the product.  That’s what these stories do.  But how do they do it is another matter.  And much of the power of these stories lies in their capacity to leverage proprietary elements of the wine-making process. While they come in many forms and emphasize different elements of the this process, stories about wine all effectively tell a tale about where a wine comes from. 

The 4 Elements that Differentiate Wines

The details of wine’s origin story become yet more important when defending differentiators of varieties that are so subtle that they can seem, in many ways, arbitrary.  The key to appreciating these differences generally lies in understanding a wine’s regional identity.  To appreciate regional identity, winemakers must educate consumers about the 4 primary influences on any vintage: The variety of grape, “terroir” (local, natural differences), the grape grower, and the winemaker’s vision of the winemaking process

 The Case of Bordeaux reds vs California Cabernet

Consider how the differentiators of regional identity inform the distinction between Bordeaux reds and California Cabernet.  Both come from essentially the same group of varietals.  They are based on the Cabernet Sauvignon grape and blended with Merlot and Cabernet Franc.  The more similar they are, the greater the pressure to differentiate.  And, apparently, with the effects of global warming, the two wines are becoming more alike than ever before.

 “Terroir” refers to all the natural factors that impact the character of a vineyard in a particular location: Soil, longitude/latitude, climate, sun, wind, rain, temperature, and so on. Growers, the farmers who cultivate the grapes, employ proprietary methods to highlight certain elements of a grape’s flavor, while winemakers employ unique processes to highlight these features.

The role of effective marketing cannot be underestimated here.  For many, the need to differentiate Bordeaux reds vs California Cabernet has developed into a regional identity crisis. 

The problem began back in 1976, when Robert Mondavi held a series of blind taste tests (the Pepsi challenge of wine).  California wines beat out French Bordeaux across the board. 

According to some, the competition was rigged: Riper, more fruit driven wines, exactly what California does naturally, have an advantage in taste comparisons.  Understanding the differences, Mondavi leveraged this advantage to increase sales. 

In response, French winemakers, concerned over the perception of Californian superiority, employed new technologies to create artificially modified flavors produced specifically to win awards at competitions—awards that would then serve as “proof” of French wine’s enduring place as the world capital of great wines. 

Yet, in developing wines to win awards, many argued that makers of Bordeaux reds were effacing the unique qualities of terroir that gave these wine’s their unique regional identity.  Instead of marketing wine, wine was made for the marketing.  Instead of wine that reflected a tasted of place, competitions gave birth to an “international style”: Wines with no sense of place or varietal identity that won competitions and impressed the critics.

Critics now insist that these competitions created a false comparison: Bordeaux reds and California Cabernets are like apples and oranges, completely different wines that cannot be judged by the same criteria.  Others add that appreciating these differences will require a strong education campaign aimed not only at the consumer but also at the “misinformed wine critic.” Once clearly defined, consumers will again accept the unique value of the wines produced in both Bordeaux and Napa, but on their own terms.  Communicating these differences effectively will, again, depend on an effective regime of marketing strategies.

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