Origin: the word might have a broad meaning in the wine world, from the actual vineyard to winery to the winemaker themselves. The most common is vineyard, with savvy consumers recognizing established properties in all major grape-growing regions. But in all senses, origin is the most significant wine marketing angle, providing a “reason to buy” for all consumers world-wide. Origin, meaning the vineyard source for the wine, is the single most important aspect of wine in establishing pricing, positioning, and promotion for wines in all sales channels throughout world markets.
Origin establishes pricing from grape to table. Grapes from a vineyard with a good reputation will sell for more than ones from a less-desirable appellation. Napa Valley Cabernet Sauvignon grapes sell for two to three times more than similar Cabernet Sauvignon grapes from Sonoma County. Likewise, Premier Cru vineyard grapes will sell for more than Village tonnes to a negotiant like Louis Latour in Burgundy.
But this is the first layer in establishing pricing, the raw product itself. What about the resulting bottles of wine? Origin pre-categorizes pricing for both on and off-sale consumers. In retail, the wine origin can move up the perceived value of the product from the fighting varietals category to premium or ultra-premium. For example, in the Australian cleanskin market, a Shiraz from South Eastern Australia will be on shelf at a lower price than one from Langhorne Creek. Both have no branding or position attempted through a label – the difference in price is solely based on the origin of the wine.
In restaurants, wine mark-ups can be partially established based on appellation (as well as based on the original case price, rarity, and age). At the French Laundry in Yountville, Napa Valley Cabernet Sauvignons are marked-up a larger multiple than their equivalent counterparts from Bordeaux—their consumers prefer/understand more the regional wines than those from outside California. A similar situation presents itself in London’s Michelin-rated restaurants like Capital, with Australian wines priced at lower multiples than equivalent French products.
Before a restaurant can price a wine on its list, it needs a reason to put the wine on their list in the first place. One way is through a recognizable brand, the other through appellation. Origin initializes a wine brand’s positioning, potentially setting both the restaurant buyer and diner at ease. Knowing something about where the wine comes from, even without having heard about the wine brand, the consumer will more likely take risks in purchasing a bottle they have never seen before. This phenomenon is evident in the emerging Chinese market, both on and off premise, where French wine sales outstrip their US and Australian competitors based primarily on the reputation of French wines. The French wine appellation alone lowers the barrier for purchase in this market where wine knowledge is limited.
Other examples of retail positioning based on origin occur in the US. Today, there is a private label brand created and sourced exclusively for Super Valu/Albertsons grocery chain called “Origin,” a top ten brand in sales volume according to AC Nielson. The entire brand image is focused on the appellation of the wine, from Mosel Riesling to Barossa Valley Shiraz. Only the logo and label colors have any other influence on the consumer, as the wines are placed in the grocery sets next to their domestic or imported wine brethren. When R.H. Phillips launched their wine line made from grapes from the Dunnigan Hills in the 1980’s, they used a dramatic native bird found in the vineyard on posters and point-of-sale materials. Their creative graphics branded the vineyard and familiarized consumers with the appellation. By building up the origin of the wine, they successfully launched a new wine brand and winery.
And the posters being pretty and striking, they were used as promotional pieces as well, with retailers and restaurants hanging them as art. Promotion, the next piece of successful marketing, centers on origin as well. While the most commonly thought of promotional pieces might be logoed hats and T-shirts, the most globally far-reaching means of promotion is through appellation-based associations and public relations groups. For instance InterRhone, the advocacy group from France’s Rhone Valley, spends millions of euros promoting their region both locally (in France) and world-wide. Their slogan, “Think Red – Think Cotes-du-Rhone,” can be found in print advertising in wine publications such as Decanter and Wine Spectator. They even employ “Ladies in Red” to tour wine shops, bars and expos worldwide, getting the word out about Rhone Valley wines and their quality. And, on top of that, they host quarterly trips for major worldwide buyers to visit the vineyards and to get a sense of place.
It’s that sense of place, the origin of the wine, which is the beginning for all things marketing. And while wine salesmen might be good at their jobs, it is wine marketing that builds brands worldwide. And today, with the barrage of advertising based on an animal logo, a winemaker, or a celebrity owner that confronts consumers, it is origin on which they rely on the most when making a purchase.
By Elaine Marshall.