My friend Rémy Charest has been reporting on events from the London Wine Fair over at PalatePress.com, and one of his recent reports really struck a chord with me.
What stood out for me was the concept of “infinite substitution” introduced to Rémy during one of the conversations that he had at the Fair. To the tape (emphasis mine):
Dan Jago, category director at Tesco, the supermarket chain that is also the largest retailer of wine in the United Kingdom, pointed out that in the wine world, a major difficulty is what he called “infinite substitution”. “There is always another product that will do the trick, in any shop. And if you do anything new, there are 45 others that will jump in and do the same thing”, he summed up, pointing out how most customers in supermarkets or large wine stores pick bottles rapidly, to get a price point and taste profile.
This stood out for me because Jago effectively summed up the vast majority of wine brands available right now in the U.S. For a sense of the volume we’re talking about here, Rémy mentioned a conversation he had with another friend of mine (damn, this wine world really is small!), Nomacorc’s Jeff Slater, who told him “there are something like 700 different wines in an average US supermarket.”
It sums up the vast majority of the 1200 or so bottles of wine samples that have overtaken my basement, and if they’re any indication of the U.S. wine market at large (and I’d certainly argue that they are), then the average wine consumer has learned something very important about how to shop for wine, something retailers have picked up on and have already factored into their stocking approach:
Most wine brands, within certain flavor profiles, taste the same and are priced the same; and so they are effectively interchangeable. And that is bad news for a lot of wine brands….
Now, if you’re a wine producer who is making a cheap wine that tastes like everyone else’s similar cheap wine made from the same variety and hailing from the same region, you might be tempted to think that through consumer outreach you will create more demand by building relationships with your customers, who will go to bat for you at the supermarket if your brand gets substituted.
But chances are really good that will not happen.
Because most consumers do not have relationships with brands, and they do not really want to interact with you when you have nothing unique to offer.
Being unique is not the same as being cheap and good. Being cheap and good might you get copied, so it only works in your favor if you’re the first one in your marketplace for your category (in which case, you have a lot less to worry about). Most people do not buy anything because of brands. The wine biz is full of people who think that the average Joe or Josette is as deeply passionate about their wine brand as they are, but recent data from researchers strongly suggests that view is mistaken. Most people buy wine based on price (and often in a serious hurry), fewer actually buy based on taste, and the ones who care enough to buy based on more than those criteria can still be swayed to move to another brand, unless you can give them a compelling reason not to do so.
If you want an example of how all of this can go totally pear-shaped, think about the recent fate of entry-level Australian Shiraz in the U.S. (and having just gotten back from a two week stint in Oz, I can tell you that they are keenly aware of the impact that cheap, clean, uninteresting Aussie Shiraz has had on their export market, and they’re predicting similar crashes for New Zealand Sauvingon Blanc, Argentine Malbec, and Chilean everything).
All of which is a long way of saying that if you’re not unique, then you’re product is akin to someone holding a job that can be outsourced overseas as soon as another region can do it more cheaply, which in a global marketplace is always going to happen sooner or later.
Yes, some producers are enormous and have products across several ranges, theoretically protecting them from some of this – but no one is too big to fail anymore (seen Constellation’s performance lately? Net down 63%…).
The method to counteract some of this, according to research firm The Source (who looked specifically at this issue), is for a wine brand to “focus less on itself and more on the customer” (now… where have we heard that one before…?). Focusing on customer and consumer engagement is a long haul play, with long haul payoffs, but when you’re in the wine game – particularly the fine wine game – then you’d better be set for a long haul anyway because you may not even see a profit for something like fifteen years.
I do think that communicating with the people who actually buy your wine will minimize this effect. But if a wine producer who thinks that you’re good at communicating with consumers, chances are very good that you’re wrong. You can either take my word for it, or you can take Jago’s word for it (I’m willing to bet that Tesco sees more everyday wine consumer interaction than most wine brands do… by a factor of, like, a few thousand).
The take-away for wine brands is that it’s now a smarter play than ever to not only reach out to consumers, but to actually listen to them; and then, when the opportunity is right, articulate to them clearly what makes you uniquely you.
17 thoughts on “Infinite Substitution Means That Without A Unique Wine Brand Message, You’re Screwed”
"Most wine brands, within certain flavor profiles, taste the same and are priced the same; and so they are effectively interchangeable." Gotta disagree here, Joe. Customers come in wine stores and demand, say, Menage a Trois or Apothic Red. That's what they want; and though there are wines that are interchangeable with them, customers still want what they want. When customers come with a list, they want the wines on that list, not something else similar that you show them.
smart reply, winedofus. while i agree that many customers are looking for specific brands, the one mantra i've adopted when discussing brands is that, "there's a lot of great wine out there". which basically means that if you're charging $50 or even $20 for a bottle of wine, you better offer something besides quality of product. because there is a ton of quality wine, and a lot of it is really cheap. so if you want to sell wine, you have to have something unique to offer. i think that is what joe was saying, and i think that is why customers come looking for specific brands.
Thanks, all. Gabe is right, that is what I was aiming for here. If customers are coming in asking for a wine brand, then I think that likely means that brand has already succeeded in making a unique mark on that customer.
Unless you have a monopoly over certain marketing ploys
Control – that would also constitute uniqueness. Might not be achieved on a level playing field, but potentially unique all the same.
Nice article Joe. Rémy's article struck a chord with me too and very specifically that infinite substitution comment. In doing what I'm doing now, helping French wineries enter the US market (and hopefully stay here) I see many hurdles they need to jump over. This kind of infinite substitution is a huge problem. How to stand out and make an impression in an ocean of wine. Throw in the complexities of the AOC/AOP system and you run into even more issues. I think that the concept of really reaching the consumer is not just for the big "wine brands" but equally, and possibly even moreso, for the small, independent wineries. Cheers Joe!
Thanks, Raelinn – Totally agree that small wine brands have a huge opportunity to stand out right now! Just wish that more of them seized that opportunity…
I'm with you on the infinite substitution angle.
And the issue might be cork dorks vs casual consumers.
The dorks are already in the game, but casual consumers just see an ocean of wine, and it all looks pretty much the same — especially to the people who get their wines at grocery stores. If you're venturing to a wine shop you're already differentiating.
I've found that under-estimating grocery wine buyers is a losing proposition. So many of us bloggers reach grocery wine buyers – that's why they love bloggers who are not snobs. That's the whole point for me as a wine writer actually.
Alana – totally get what you're saying. That's how I feel about Costco buyers; it's the butt of jokes but that drives a HUGE amount of fine wine sales.
WH – well, I'm a nerd with wine and I get overwhelmed in grocery wine aisles a lot of times, so I think it's not just casual buyers who find the wine shopping confusing :) mi suppose the ironic thing is that so much of it could taste the same that we are better off not worrying and picking randomly :).
You'll be able to write this article again in five years, and five years after that. Evaluating winery behavior for wines that are stocked in a supermarket is indeed looking at a huge amount of wine sold but those people plucking up a Barefoot or Layer Cake are not looking to engage with those companies. They might want a cute story to hang their purchase on but it will always be about price and a safe bet. I think you're on target with "be different" for that crowd but for the "Start Listening" mantra, I really think this is advice for small to medium producers making wines in the higher price bracket. People buying these wines do want to know about the story and process behind a wine. I think the wineries that need to hear your message for the most part already have and are doing that legwork now. I was at a packed session his morning about customer service and wine and trust me, the message is the same: listen, engage, be fast, give them more than expected… It might look like not much is happening because you're looking at what the big guys are doing vs what us little guys are doing.
Alan Baker, Cartograph Wines
Alan – well put! And I fear you're right about the five year repeat…
Timely post. We've been discussing this a bit at the shop, seeing as many of the larger retailers are going/have gone to a set in their stores with the conscious tactic that 40-70% of the products in their store are private labels. It's huge. the whole aspect of branding has been blown up. But other consumer items have been dealing with this for a long time, i.e. canned goods, detergent, you name it, band-aids ( I mean bandages).
What a brick and mortar winery has is their social value in that however they can connect with the world at large they had better do so and quick. Jordan and King Estate are excellent examples of transitioning to that platform and making good success of the move.
Five year? how about 18 months?
thanks for the thoughtful word you put into this post, we all realize it took time away from your guitar playing ;)
Alfonso – and time away from playing dinosaurs with my daughter! :) Jordan is a great example, thanks for bringing that one up. A big example of the brand / SKU explosion for wine is Chile: a lot of big producers have deals with importers where they create new brands for them, rather than seeing those importers include other Chilean producers' products, when the need arises for a particular wine style. I think that is playing right into this “sameness” trap…
Joe, Indeed the world is small and I enjoyed meeting Remy.
I had the pleasure of sitting on the panel with Dan Jago from Tesco, Jamie Goode (the well-known UK wine writer) and Alex Myers from Manifest who represents Brew Dog. The panel topic on wine marketing was sparked by my fascination with DIFFERENT a great marketing book by Youngme Moon. Jamie and I spent some time discussing how little focus there is on wine marketing at conferences like London Wine- thus the panel. For readers who are interested to learn about this great book and some interesting lessons from wine marketers, you can read my review here. http://momentslater.blogspot.com/2011/12/differen…
Also, my review of the panel and conference key ideas are here for wine marketing geeks like me: http://www.momentslater.blogspot.com/2012/05/lond…
One thing Dan Jago said that has really resonated with me is that the typical shopper in a Tesco wine aisle has about 75 seconds to make a choice (out of 1000 SKUs). Good luck building a brand if everything blends together.
Thanks, Jeff!! Great hearing from you. Damn, that's one sobering statistic!
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