Branding hits the bottle – Creating identity in a cluttered
wine market 15 December 2006

There are currently about 5 500 wines available from around 550 wine cellars in South Africa. There is a glut of wine locally, and much of the high end is being exported. In such a market, establishing a brand and connecting with consumers is a challenge. In an article in Brand magazine, Giles Griffin looks at current trends.

Local wine writer Tim James suggested a horrible marketing probability when he said on his website: “How people choose wines, I have no idea… Failing experience or trusted advice... the safest and most boring answer is to choose the big brand name, but the wines will generally be boring too, and probably overpriced to pay for all the advertising.”

If FMCGs and cellphone companies are at a loss as to how to cut through the clutter, how much more so for wines, which generally have a market that knows less about the product to start off with. Boutique wines also contradict a cardinal rule of brand-building: product availability cannot be guaranteed and accessibility is a problem.

How do you brand and market in these unique circumstances? While this may contribute to the mystique of the product, it still poses a problem for growing wine sales.

Traditional advertising for all but the biggest commoditized brands is the least effective way to go, largely because the budgets are too small, the labels too plentiful and the markets too niched to effectively use classic advertising.

Even the liquor giants spend relatively little above the line. Distell, with R6,7-billion annual revenue,¹ spent R42,8-million in the past 36 months.² They have 57 wine brands, including those for export only. The next biggest spender, Douglas Green Bellingham (DGB), spent just R6,4m. KWV spends R2,8m; Westcorp R1,9m and the Really Great Brand Company spends R1,1m.

The top four above-the-line (ATL) spenders are all Distell brands: Nederburg spent R13m over the same period and is spending another R9m on a new campaign; black/youth market champion JC le Roux spent R7,6m; Graca spent R6m and Chateau Libertas R2,4m. It is estimated that below-the-line (BTL) spend is three to four times that of ATL for most of these wines, with the highest BTL to ATL ratio at the top end of the market.

In the absence of convenient mass market segmentation and big budgets, the wine industry has been slow to experiment with relatively inexpensive, innovative alternative forms of marketing. This is particularly significant in the big companies, which have the most opportunity and which by and large have done nothing original to raise the profile and profitability of a local market whose wine consumption is in freefall.

This might be changing. Distell is making the belated move of linking wine to lifestyle at retail level. Next year, Nederburg will be offered for tasting in @Home stores around the country, creating what could be termed an “emotional” brand extension, Nederburg@Home. Clever, as long as there’s a wine store nearby to close on the experience. DGB has launched with a funky lifestyle label, The Beach House, and will be promoting it with stylish POS and summery merchandising such as beach umbrellas and slip-slops.

There are important signals, too, that the wine industry is waking up to the potential of the so-called Black Diamond market, most of which is based in Gauteng, far from the Western Cape wine source, and most of whom have not grown up with wine. The second Soweto Wine & Brandy Festival in September helped confirm that the wine industry is making moves in the right direction. Once again, the key insight into the direction that wine marketing in South Africa must go was the appropriate linking of wine and lifestyle. It was a fest of food and jazz, wine and brandy.

Back at the regional ranch of the Western Cape, year-round awareness has to build on the big wine events, and some of the smaller brands have caught on to the PR value of a striking name and label. One international study rates these as jointly having 65% of the influence in a sale. Good quality wines with arresting names appeal to a market previously intimidated by the elitist attitude of wine makers, marketers and drinkers. The trend for irreverent wine names incorporates the principle on which word-of-mouth marketing functions. People talk about wines, and engaging names give them more to talk about.

Good examples include Fairview’s tongue-in-cheek Goats do Roam range (a play on the French Côtes du Rhône); the Grape Minds group of wine brands whose wine names are never dull (The Wallflower, A Month of Sundays); and Fat Bastard wines.

Export examples confirm the value of unusual names. If the producer of some of the best red wines in the country – Boekenhoutskloof – can produce equally good sub-brands with memorable labels and names to match, and sell them for between $10 and $50 dollars in the US like hot cakes, they must be getting something right. They have names like Chocolate Block, Porcupine Ridge and Wolftrap, and each wine has a genuine story, which creates an emotional bond with the consumer.

Those companies open to experimentation and emotion will win the brand battle. A brave attitude is manifest in the solely blog-marketed Stormhoek. Technology has become a way to overcome the problem of accessibility for small operations, with the opportunity to market on-line. Strange, then, that viral marketing hasn’t been harnessed.

Wine marketers are also waking up to experiential marketing that is more ambitious than the traditional wine routes and annual expos. The wine routes are of course the primary marketing mechanism for the bigger estates, but the value of creating an event, with its PR opportunities, does not appear to have been exploited with much verve.

A good example of experiential marketing is the Darling Wine Experience. This small collection of five wine farms focuses hard on a sense of place and the matching of excellent food with equally excellent wines. It creates a community of interest catchment in which one-to-one selling is very successful.

The point here is that a fine wine coupled with a fine experience will reinforce the bond with the brand in question. There is an essential difference in marketing established wine with estate experience opportunities, and lifestyle brands, which often don’t have cellars at all and for which, therefore, smart labelling and POS is critical.

However, the tiny Barefoot Wine Co – now officially BWC – based in the Western Cape in Agter Paarl, with no permanent vineyards or cellar, combines experiential marketing with art labels and its quirky name. Each year they host a foot-stomping party. This has been private, but there is talk of opening it to the public. One could argue that this is the oldest experience in the world of wine: the Italian village turning out to press the grapes with their feet. The more things change, the more they stay the same.

In terms of modern brand building and marketing, however, this kind of exercise is getting closer to the universal principles of brand building. The basic product is the starting point, but to stand out from the clutter of other brands and potential brands, you must develop and promote a recognizable personality with reliable service.

Finally, winemakers in the domestic market might profit from taking the longer view of world trends and get in on the bottom rung. Wines of South Africa (WOSA) has adopted “Variety is in our nature” as its positioning. WOSA CEO Su Birch believes it is ahead of what will be a long-term game in terms of its espousal of a growing global trend towards a biodiverse, sustainable and ultimately organic approach to agricultural produce (which wine, for all its mystique, ultimately is).

Budget may be forcing the wine market to find alternative ways to brand and promote themselves, and that may be a blessing in disguise. Advertising? Well, what if that was banned…?

Notes
1. Source: Distell Group press release August 29 2006
2. AIS AC Nielsen figures: January 2004 to June 2006.

• This article was run in the November 2006 issue of Brand, a leading business magazine in the SA advertising and marketing industry. Republished here with permission