Just read an interesting article in the July 23rd issue of the International Herald Tribune titled: France driven to (gasp) market wine, and I think it merits comment....
In the article, author Eric Pfanner begins by citing that although vintage French chateaux wines are commanding record places in the marketplace, the average French winemakers are encountering ever-increasing competition from winegrowers all over the world, and slumping sales as a result.
Not only are French wines having to go head to head with wines from California, but from upstarts Australia and Chile, among a slew of other lately-come nationals. The demand for Italian wines is growing with added exposure to the American market, as well, with the likes of American restaurateurs Mario Batali and Joe Bastianich leading the charge.
The article states that French wines now account for 3% of total wine sales, down from 10%, and that their sales are also sliding in other markets -- Great Britain among them.
The response to the slow down in French wine sales is quite interesting. For one thing, the European Commission wants to eliminate vineyards to reduce production, and cut winegrower subsidies. For another, the French have had to think about embracing a new approach to marketing their wines, an anathema to a people who have prided themselves on long-held traditions and business practices, but one that is necessary for survival.
Pierre Courbon, international marketing director of French firm OVS (formed for the sole purpose of marketing a new wine brand dubbed Chamarré) was quoted in the article as saying: "Wine increasingly is becoming a consumer good (read: commodity item), not a cultural exception. Beer, spirits vegetables, dairy products and even bread is branded. Why not wine?"
This is a radical departure in thinking for the French. Wines have traditionally been marketed by region, vineyard and producer in accordance with French law. The nuances and attributes of each growing region have long held sway, and the specific characteristics of each brand have been downplayed.
Until now. With consumers preferring to choose wines by brand and variety in the U.S. and world markets, and slumping sales, the French have begun to reorient their thinking.
Marketer Pierre Courbon's Chamarré wine has been labeled with more focus on its brand name on the label, followed by region and varietal blend, very much like competitors' wines from California and Australia. Furthermore, with financing from the French government and private banks, OVS has planned a broad-based marketing campaign, earmarking $10 million for advertising and consumer promotions for a three-year launch and support in the United States alone.
With U.S. growers and Australian growers, in particular, pointing the way to successful branding initiatives for wine, and incorporating memorable art work that ties the brand name to specific imagery that is both regional and memorable, the French have a blueprint to follow.
And follow they must if they are going to stabilize and continue to build on the brand heritage they have built for centuries around their quality wines. As the article rightfully points out: ". . .France, a country synonymous with wine. . ."
Interestingly, both American wine producer Gallo and Australian Southcorp have begun selling and marketing French wines, capitalizing on their branding know-how and exploiting French heritage and the beautiful rural imagery of the country. Apparently, analysts feel that this signals the beginning of a new trend; that many other large purveyors of wine and alcohol will be developing their own French wine labels. This cross pollination of French wines and multi-national marketing aplomb may yield great fruit (no pun intended).
And as Richard Halstead of London research company Wine Intelligence is quoted as saying in the article: "You've got a supply crisis in France which is never going to be dealt with through the existing distribution and marketing infrastructure. As long as that exists, there's going to be a willingness to try new things."
Moral of story: Nothing, no product or service, is immune from competition and the dreaded issue of commoditization with globalization.
Only a commitment to developing a unique brand identity and consistency in brand management will allow a product line to rise above the fray in the marketplace. Slowly-diminishing sales usually signal that the brand is ailing.
Better not to wait to address these problems or to be forced to do so when competition has diminished market share to alarming new lows. However, having said that, better late than never.
Technorati tags: wine marketing commoditization France
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