Trying to make any concrete predictions about the types of wines we’ll be drinking in a year’s time, never mind three or five years down the line, is a dangerous exercise. Who would have predicted five years ago that Pinot Grigio or Prosecco would turn the wine world on its head?
Wine tastes and trends are not dreamt up in the brand development rooms of multi-national drink companies. If they were, these companies would be making their fortune telling us which grape variety is going to be selling like Coca-Cola in the next two years. But they’re not.
That does not mean wineries can’t move, adapt and position themselves to take advantage of future wine trends. To do so they need to stop looking inside the wine industry for inspiration, and look at what trends are dictating changes to consumer behaviour in general. That is where the solutions of tomorrow exist and where potential new wine drinkers might be coming from, says Mark Hely, export director of Australia’s McWilliam’s Wines. “Wine reflects and follows what is going on. It does not lead,” says Hely.
Three strategies
Wine producers face the same challenges as any mass consumer brand, be it a newspaper, a television channel, a supermarket or an FMCG grocery brand. They all want to know what makes the customer tick. Drill down into how the leading players in each of these fields are positioning themselves for the future and you come up with three key defining strategies: personalisation, community and data analysis.
Take a look at what is happening in publishing, for example. “Gone are the days when big publishers could simply create content and throw it out to the public,” says Steve Sobel, global director of media solutions at US consultants Salesforce, speaking at last year’s Monetising Media event in London. For it to be effective it needs “to personalise and engage deeply with their consumers,” he adds.
Replace ‘publisher’ with ‘producer’ and it’s easy to see how it relates to wine. Consumers are simply overwhelmed with choice. Whether they realise it or not, they now have a “longing for products”, or services they can identify with, says Sobel.
Bela Szabo, innovation and strategy director at global advertising agency DDB, says consumers increasingly want to buy brands that have a personal meaning and resonance in their lives. “They want to share and enjoy experiences with their friends and family and will gravitate to brands and services that either provide those opportunities or make their life easier or simpler in some way,” he says. “They want to relate to brands that matter, that make them feel influential by using or sharing them.”
Stuart Whitwell, joint managing director at Intangible Business, which offers brand valuation and strategy for a number of drinks companies, says what a brand stands for is particularly important for younger millennial consumers. “Younger consumers are looking for products that have genuine cultural values. That are handmade,” he explains. “So in drinks that means they are looking for small batch and craft products.”
“There is a big opportunity for a wine brand that can crack that,” adds Szabo.
E&J Gallo’s brand Barefoot Wine, for example, has become the bestselling wine in the US, with yearly sales to May 2015 of $619m. The brand positions itself as campaigning for cleaner beaches and a tag line that says: “there’s no point in doing well if you’re not doing any good”.
Made with personality
Innovation in wine, and drinks in general, is now as much about the story of how the product is made and by whom as it is the actual product. This shows up in the proliferation of custom crush facilities in the US, where winemakers can come and share costs and facilities of a central winery, or in projects like London Cru, which sources and brings grapes from vineyards across Europe to a central London site to crush and make wine. It is a fresh approach to winemaking that resonates perfectly with what young consumers are looking for.
Fairtrade wineries potentially have a huge opportunity, says Bernard Fontannaz, founder of South African Fairtrade producer Origin Wine. Consumers are able to connect directly with the fact the wine they are buying is having a strong, positive effect on local communities in deprived areas of the world, he explains.
Going direct, going social
The successful brands of the future will be the ones that can take that clear, authentic message and use it to genuinely engage with their target consumer groups, says Intangible Business’s Whitwell. There is no better way to do that than through social media, he adds, where not only can you target your exact audience, but the impact is immediate and the message can spread incredibly quickly. “There is no limit to what you can do if you get it right,” says Whitwell.
Szabo agrees: “We are going to see brands start to have real conversations and a one-to-one connection through social media. Millennial consumers are going to expect it. The first wine brand that can do this well will smash it.”
One brand trying to do that is Most Wanted, the new UK varietal-led range from Off-Piste Wines. On the one hand it wants to push the varietal-driven consumer up the price ladder to £8.00 to £10.00 ($11.50 to $14.40). On the other hand, it’s looking to build a community through an ‘Insiders’ section of its website. Here the brand can communicate, and most importantly listen to how their target consumers talk and engage about wine, says brand creator Rachel Archer. She explains: "Each month we'll ask our Insiders for help and input about what we do, and plan to do. In return, we'll treat them like a bonafide wine VIP, with sneak previews, and exclusive rewards. It's the cherry-on-the-cake stuff that might help them enjoy our wines more."
It is all about making a real effort to understand how your target consumer thinks, says Szabo. “To really connect with consumers you have to look at the trigger points that are changing their behaviour and create brands that become part of that change. You can become part of that culture,” he says.
Lifestyle brands
Major global wine players are finally catching up with FMCG marketing principles, by looking at potential target consumer groups and then working backwards to create wine brands that might appeal to them.
Accolade Wines’ Echo Falls Fruit Fusion brand was a direct attempt to win over drinkers who are happy drinking sweet, flavoured ciders, using branding and imagery aimed at the same core drinker, says Ted Popov, Accolade’s general manager for Europe, Middle East, South America and Africa.
Such so-called ‘lifestyle brands’ aimed at different target age groups, be it for men, women or both, are going to be the norm, says Hely at McWilliam’s which has developed a number of brands under its Essentials range, like Evans & Tate Butterball, or its Inheritance and Balance wines. In America there is a whole raft of lifestyle brands climbing up the top seller lists specifically aimed at women including Cupcake, Skinnygirl, Mommy’s Time Out or Party Girl pink rosé.
Get connected
To get close to the consumer, producers need to understand the direct impact new technology is having on how people behave, both as individuals and consumers, particularly when it comes to the widespread use and functionality of smartphones.
Consumers will soon expect their smartphones and tablets to perform almost every daily task imaginable, from catching up on the news, to sharing important business reports, to putting the oven on for dinner on the train back from work.
Douglas McCabe, chief executive of media consultants Enders Analysis, says the widespread use of connected devices will be the main disruptive force behind future changes in consumer behaviour.
The technology already exists, for example, to allow smart home appliances to communicate with each other and predict the behaviour of their owners and automatically switch themselves on and off. This means consumers will eventually become discrete data banks full of valuable information about their behaviour and personal likes and dislikes. It’s this kind of information that successful brands would love to get their hands on, says Mark Challinor, chief executive of Media Futures. It’s possible that consumers might be willing to share that personal data in return for more tailored and special offers based on their personal needs, he adds.
And this dependence on smartphones is only going to get more acute. Enders Analysis predicts that by 2018, 75% of all online activity in the UK will be through a mobile phone. This means that wine companies will need to create a strategy around mobile and data, with customer experience at the centre. In-depth consumer data allows you to do that and is now the cost of entry for brands looking to succeed, particularly online, says Sobel.
Making it happen
This is all a long way removed from planting a few more hectares of Pinot Grigio. But don’t panic – wine is particularly well placed to connect with this switched-on, smart consumer. In the US alone, 99% of wine consumers have access to the Internet, according to Sonoma State University.
How wine companies choose to talk to those consumers online will be the key. Connecting with them may mean employing new kinds of people. It will involve investing in customer relationship management (CRM) and enterprise software tools that give businesses access to real-time analysis of key data, like margin and inventory levels, in their supply chain.
Finding an effective, relevant way for producers to tell their story online will be critical – perhaps as important as the quality and style of wines they make.
Producers are going to have to invest in quality shareable content if they are going to be seen online, never mind heard.
If they don’t they simply won’t exist.
