Tag Archives: wine marketing

One billion bottles of Yellow Tail

yt.jpegOr more than 10 billion glasses, if you’d prefer.

Despite everything — the jeers from critics, the blame for sinking the Australian wine industry, its role as one of the first livestock wines — Yellow Tail has thrived. How about these numbers?

The company, despite its struggles with the pricey Aussie dollar, recorded its best year ever in fiscal 2013, with sales by quantity increasing 8 per cent. Meanwhile, some 11 1/2 million cases a year are sold in the U.S., making it the most popular foreign wine in the country. That’s impressive to begin with, and even more so for a brand that didn’t exist before the beginning of the 21st century.

In all of this, Yellow Tail helped change the way Americans drink wine, as important as Two-buck Chuck and the arrival of the multi-national wine companies. If nothing else, it was one of the first of the international style wines, fruity and easy to drink, and it was cheap.

Yellow Tail boss John Casella makes no apologies for this. I’ve met him twice, and each time I was part of a group made up of wine types much more highfalutin‘ than the Wine Curmudgeon. Casella just stared them down, politely, and his refrain was the same: “If consumers want a simple, fruity wine at a fair price, what’s wrong with giving it to them?”

Nothing, of course, which is why his company has produced 1 billion bottles. I’m not a Yellow Tail fan, and only one of the wines has been reviewed here in almost eight years. They are too fruity and too simple; I prefer wines that are more interesting, and there are many at the same price.

But lots of people don’t like those wines, or can’t find them, or even know they exist. And this has helped Casella build what may be the most successful wine company in Australia. That’s the thing to keep in mind when you read the other pieces about Yellow Tail’s milestone, articles that will almost certainly focus on the stuff in the second paragraph of this one. Yellow Tail’s success makes the company so easy to dislike that too many of us lose sight of why it is successful — and what that means for wine.

Winebits 303: Cupcake, dollar stores, Whole Foods

? Winemaker leaves Cupcake? Adam Richardson, the winemaker who helped Cupcake go from a startup to one of the most successful wine brands in the United States, has reportedly been hired by embattled Treasury Wine Estates. Shanken News Daily reported last week that Richardson will oversee winemaking for Treasury ?s U.S. labels, which include Beringer, Stags ? Leap Winery, Souverain, and Meridian. If true, this means Australian-based Treasury will likely keep its U.S. labels, which are rumored to be for sale, and will step up its turnaround plans for the U.S. brands. That I ?m writing this using business reporter jargon speaks to the changes in the U.S. wine industry over the past decade, with multi-nationals treating wine the same way they treat other consumer goods. It ?s just one more example how wine is becoming a commodity like detergent or running shoes, and how the business is becoming marketing- and price-driven in a way it never has before.

? More retailers want to sell wine: We ?ve covered this on the blog before, but this story from the Arizona Republic newspaper (behind a limited pay wall) offers insights in why dollar stores want to sell wine. ?We want to be a convenient store, ? said Manuel Becerra, district manager for 99 Cents Only. ?You come to the store and you find everything you need. ? Who would have thought that included wine? The other important thing to note is that these stores, since they specialize in less expensive merchandise, are selling cheap wine, usually not more than $3 or $4 ? yet another example of how the wine world is changing.

? Whole Foods and wine: How does the country ?s biggest natural foods grocer decide what wines to buy? ?I’m looking for wines that are unique, that deliver value and have a sense of place — to me that’s one of the most important things about a wine — but at the same time will sell in all of our stores. If I try something I like and I think customers will like it, I’ll buy the entire production. ? That ?s the word from Doug Bell, the retailer ?s global wine and beer buyer. Think about that ? if he thinks the chain can sell a wine, he ?ll buy the entire production. To paraphrase that well-known philosopher, Dorothy from the Wizard of Oz, the wine business ain ?t in Kansas anymore.

Winebits 302: Wine snobs, wine marketing, appellations

dougfrost
The great Doug Frost

? Enough already: Or so says the great Doug Frost, writing about a recent piece in the Wall Street Journal: “…this is the sort of seemingly contradictory advice that is all too common in wine, and that speaks to a dwindling and, I ?ll dare further, annoyingly precious sub-group of gourmands called wine snobs.” I have been lucky enough to judge with Doug and even appeared in an interview with him a couple of years ago, and the experience has always been terrific. When Doug Frost takes someone to task for being snotty, it’s time for the entire wine world to listen.

? Giving consumers what they want: A British supermarket chain and an Australian producer have signed a three-year deal for the latter to provide the former with wine. Why does this matter to U.S. consumers? Because, as one official involved in the deal said, “Gone are the days when a producer could get off a plane and go and see the likes of Tesco with its list of wines. You need to have a category plan and look at what customers want.” In other words, not making wine because you think you can sell it, but asking retailers what wines to make, in both style and varietal, based on what their customers want. This is revolutionary, part of the trend over the past five years that saw the growth of, among other things, sweet red wine and the increasing power of large retailers to set prices.

? Just say no: Not soon enough, apparently, as the debate over whether there are too many American Viticultural Areas, or appellations, in the United States, continues. The federal government approved four more AVAs last week, reports the British wine magazine Decanter, and it follows “criticism earlier this year that the proliferation of AVAs could confuse consumers as to the wine ?s origin. Historically, this has been a common complaint aimed at the appellation system in Old World countries, and particularly France.” Case in point: Sonoma will now have 16 sub-AVAs.”

The Treasury debacle, masstige wines, and what the consumer is trying to teach the wine business

Treasury debacleThe Wine Curmudgeon, despite his brilliance as a writer, is a lousy businessman. How else to explain that former Treasury Wine Estate CEO David Dearie earned A$2.4 million (about US$2.25 million) for running his company into the ground, while I have been giving away, for free, the wisdom that could have helped Treasury avoid this year’s 53 percent drop in profit?

One more time, for those who still aren’t paying attention: The U.S. consumer buys wine on price. The challenge for wine companies, whether multi-nationals like Treasury, Napa cult wineries, or the thousands of other producers around the word, is to add value so that the consumer gets more than their $10 worth. Some do it with cute labels and marketing; some do it with points and high scores; and the best do it by giving us $12 or $15 worth of wine for our $10. (Go here for almost seven years worth of examples of how the best do it.)

Treasury did none of those. Instead, it looks like it did the absolute worst possible thing — it charged us $12 or $15 or $18 for $10 wines, a technique called masstige that was part of its business plan. I spend some time on this in the Cheap Wine Book, though I didn’t realize what masstige was when I wrote it. Rather, I noted that wines that cost between $12 and $18 seem to offer the least value, “probably because producers don ?t improve the quality of the wine as much as they increase the price and gussy up the label.”

Think of masstige as a cross between mass market products like Two-buck Chuck and Barefoot and luxury labels like high-end Champagne. Masstige is apparently very common in cosmetics, where the added value comes from the prestige a product provides because it costs more money. This approach may still work in cosmetics, where the value difference between Revlon and Clinique remains well established even though the products are quite similar based on what’s in the jar. But in wine, the idea that expensive is always better (as noted here and elsewhere many times since 2008) is something that the consumer has rejected.

Interestingly, I’m not the only one who has realized this. An analyst, discussing Treasury’s problems, said “the underlying problem in the U.S. is not inventory, it’s the health of the brands, because of underinvestment in marketing.” Which, as mentioned above, is one of the three ways for producers to add value.

Want to make money in the wine business? Treat the consumer fairly, and the consumer will reward you. That’s the lesson the recession taught, and it’s really not any more complicated than that. Which is probably why I never thought I needed to charge for the advice.

Marketing foolishness, or ‘Yes, but what does the wine taste like?’

One of the most important developments in wine, and especially for consumers, is the upsurge in marketing. Yes, the business always marketed its product, but the approach usually focused on the wine.

No more. Today, it ?s almost all about wine as lifestyle product. If the following are any indication of what ?s to come, wine drinkers are in deep, deep trouble.

? From Trinchero Family Estates, one of the Big Six wine producers, for a new product called Fancy Pants: Fancy Pants has certainly struck a chord with consumers. It ?s a memorable brand name with a stunning package, but more than anything Fancy Pants is about bringing ?fun ? and ?fancy ? to any occasion. ?

? Also from Trinchero, for its best-selling Menage a Trois line: ?As a seductive wine, M nage Trois wines are a perfect fit to watch ?The White Queen ? series. STARZ urges viewers of ?The White Queen ? to ?choose your side, ? and at M nage a Trois, we offer our consumers the chance to ?choose your wine, ? with a portfolio that now includes 11 different varietals. ?

I was going to write something snarky about each blurb, but what ?s the point? Each is already snarky enough, and that certainly wasn ?t the intention. Sadly, the people who wrote these, like this person, probably figure they ?re award winners.

One day, perhaps, the Wine Curmudgeon will figure out why some producers treat wine drinkers like we ?re idiots. Because I sure don ?t understand it now.

How to market wine to people and actually teach them something

How sweet is Alsace rieslingThe graphic at left is from an Alsace riesling promotion, devised by Louise Jordan. Her goal? Show consumers that riesling doesn ?t always mean sweet.

?I kept seeing time and time again that in every infographic put out by consumers and wine professionals alike, that riesling was always in either the off-dry or sweet category, ? says Jordan, who works for the French wine region ?s marketing company, Teuwen Communications. ?Also, whenever we do large scale consumer Alsace tastings and serve riesling, people always assume they ?re sweet. And many times, even when we tell them the wine is bone dry, they still say it’s sweet. ?

Click here for a bigger version of the graphic, which will open in your browser. Comparing riesling ?s residual sugar to soft drinks and orange juice is brilliant, and I say that even if Louise wasn’t a friend of the blog. And noting that a Starbucks-style latte has eight times the sweetness of a riesling is brilliant. That more people don’t do more like this speaks volumes about what passes for wine marketing, including the all but useless descriptors on the back labels. Which do you think will help the consumer make a better decision?

This is just another example of how far behind wine is in sucessfully talking to its customers. If wine doesn’t believe in ingredient or nutritional labeling, I suppose it is too much to expect more like this.

Twitter tastings, wine marketing, and what comes next

image from www.vintagetexas.comThe Twitter tasting has revolutionized wine marketing, as anyone who cares about regional wine will happily attest. We have used it with great success at Drink Local Wine, and the monthly Texas wine tweet-off has been equally as successful. People from around the world can comment and taste wine at the same time, linked through nothing more than the cyber-ether.

That ?s why I wanted to participate in the recent Don and Son ?s pinot noir Twitter tasting. The format ? a live webcast combined with a Twitter tasting ? sounded like it could take virtual wine tasting to the next level.

The wine was well done, and reminded me that California can produce quality pinot noir. The Twitter/webcast part, though, didn ?t quite do what I hoped it would, which says more about the wine business than the technology. More, after the jump:

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