Marketing wine is not for the faint-hearted, or stupid
As a guy with more than a little interest in the marketing side of the wine biz, I’ve always been fascinated by how an unknown winery becomes famous–how a famous winery stays famous–and how, and whether, a winery that’s lost its glitter can regain it.
The best way for an unknown winery to get famous is for wildfire to strike. That’s the metaphor Heidi Barrett once used in explaining to me Screaming Eagle’s vault to stardom. It just kind of happened, a combination of word of mouth, good reviews and mysterious luck. That’s very rare, of course, so lately I’ve seen wineries using all sorts of tricks to become known: donating a portion to charity, appealing to mommies, unusual packaging, hiring celebrity consultants, ownership by some washed up athlete or rock star, etc. etc. blah blah. (Not saying that a winery that donates to charity is necessarily doing so to get famous. But it can’t hurt.) However, no matter what the approach, it’s very hard to go from nowhere to the top. I’d say one in a thousand new brands can do it.
How a famous winery stays famous may be the easiest question to answer. It’s simple: continue to out-do yourself in quality. No tricks, no shortcuts, no smoke and mirrors. Shafer and Williams Selyem (to name a few) stay on top year after year, because they take nothing for granted, and spare no expense. On the other hand, a brand like Gary Farrell (sadly) seems to be content to drift along on past laurels. It may work for a while, but not forever. Only long enough for people to catch on.
Which brings us to the final challenge: How can a winery that’s lost its glitter ever regain it? Is it even possible? Here, we venture into the realm of metaphysics. The short answer is that it’s next to impossible. I can think of very few brands that were up, then down, then went back up again. Davis Bynum may be trying to resurrect itself, in its Tom Klein era, after a long period of obscurity following its glory days. We’ll see how Bill Foley’s properties–Chalk Hill, Sebastiani, Firestone–fare, and the answer will provide insight into Foley’s real motive: whether he’s interested in boosting quality, or just stringing these brands along while he can. (As far as I’m concerned, the jury’s still out.) There are a number of interesting properties that were never famous to begin with, but were well-regarded, and who haven’t exactly slipped, but just never really shined. Turnbull Wine Cellars is one: they’ve been in a twlight zone for years, neither culty nor roadkill. I keep waiting for them to make a move.
I was thinking about all this yesterday due to an article, “Sometimes a brand isn’t worth saving. Here’s how to tell,” that appeared in the interesting daily business blog, Fast Company. Although it’s not about wine companies, but more about consumer goods brands like Dove, K-Y Jelly and Sierra Mist, its conclusions are applicable to wineries as well. The author asks five questions whose answers provide hints to a company’s viability.
1. Can its value proposition be redefined? For a winery, this means making the product relevant to the greatest number of people possible. If a winery already is doing this, all it has to do is remain relevant (cf. my remark above about continuing to out-do quality.) Relevance in wine these days means either affordability or a high price-quality ratio (e.g., Williams Selyem Pinot Noirs are not particularly affordable, but they give huge quality and pleasure for the price, so people are willing to pay it). But unfortunately, from where I sit, most wineries seem unable to define their value proposition. They don’t know what they stand for. There’s a lot of whistling past the graveyard.
2. Is the category growing, or does it demonstrate growth potential? The author used the example of K-Y Jelly, which started as a surgical lubricant, then hit the big time when manufacturer Johnson & Johnson realized people were using it for a sexual lubricant. Sex being a “growing category,” J&J hitched their wagon to an ascending star. What wine categories are growing? There’s that silly Moscato thing, but unless you were already onto it, it’s too late now. What’s growing is what’s always grown: Chardonnay and Cabernet Sauvignon (in California). Only they have to be affordable. That’s still where the action is. Pinot Noir is growing, but there’s no such thing as affordable, good Pinot Noir–a contradiction in terms. I wouldn’t enter this Pinot Noir market unless I knew I could get 100 points from Heimoff.
3. Is it [the brand] on trend? Hummer is so off trend, it’s not even funny. So is fur, although it’s trying to make a comeback. Luxury brands in general seem off trend–not in tune with today’s penchant for value and modesty. “Natural” is on trend, but I don’t think “natural” is enough to sell a wine. There may be enough consumers into “natural” for Sierra Mist, or some natural form of cosmetic, to make it, but there aren’t enough wine consumers who will buy on a “natural” basis alone. What’s “trendy” in wine is wine itself: drinking it, serving it at dinner parties. So overall, wine is a good business to get into. But the winery needs a solid plan.
4. Is its revenue sizable? This means that a brand that’s doing well should attempt to do even better, using its revenues as leverage. Gallo does this better than anyone. They have the smartest product development team in the business; if there’s an unmet niche out there, they’ll fill it–and if someone beats them to it, they’ll do it better, for less money. Of course, regular wineries can’t do that. But what a regular winery can do is make their product so vital to the consumer that the consumer believes he or she can’t do without it. Two Buck Chuck did that. It’s doable and replicable for other wineries–I don’t mean retailing a bottle for $2, but finding something special and being the first one out there to do it.
5. Is it [the product] strategically useful for developing the company’s competencies? This is a lot harder for a wine company to accomplish than for, say, Procter & Gamble, which moved into health and beauty products based on Oil of Olay’s succcess. But what a winery can do is identify its most successful product, then figure out a way to spin something else off from it. Robert Mondavi famously did this with Mondavi Woodbridge. Before you say that was a failure, let me remind you that Woodbridge was not a failure: the collapse of RMW was due to going public, which in turn drove the Board to make many other mistakes, chiefly an unsupportable expansion. Woodbridge was actually a success. I don’t think it caused product confusion with the parent winery. So piggybacking on a proven commodity can be a good tactic, provided it’s done right.
However, as the author says, “As it turns out, not all brands are worth reinventing.” There are an awful lot of wine brands in California alone that don’t seem to have what it takes to stand the test of time. I wish them well–but I believe in five years we’ll see dozens of brands, extant today, that will be non-existing in the year 2016, and deserve to be.