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FAQ's:
Frequently Asked Questions

Every client is unique, and the marketplace changes from year to year. One-size-fits-all solutions almost always fail. While not formulas for success, the following insights show how I treat wine brands as business assets.

FAQ's

What is brand equity? Doesn't it take many years to generate recognition and demand in the market?

Brand equity ("valor de marca" in Spanish) is a marketing term that refers to a brand's value. This value is mostly determined by consumer perceptions and experiences, which do include attributes like reputation, consumer awareness and loyalty that take years to develop. However, brand equity is also amplified through more immediate qualities and consumer perceptions. For example, brand relevance, brand differentiation and brand energy all strongly appeal to wine consumers, and can effectively be built into the brand propositions of both new and existing brands by means of a disciplined and comprehensive planning exercise. 

Brand equity makes sense for Apple and Coca-Cola, but how can a wine brand hope to stand out among so many thousands of other wines and labels, especially if it's new and/or has a niche image?

Most wine brands cannot aim for mass market recognition because wine itself is such a niche product. Only about one-third of American adult consumers drink wine at all. For any wine brand to stand out on the retail shelf it must first make it onto the shelf. This means the perceptions of retail and distributor decision-makers will be a critical part of the equation. In effect they are also wine consumers. 

Strategies for creating brands with strong brand equity integrate myriad factors, including wine style, cost of production, country and region of origin, history and heritage, emotional values, objective wine quality, terroir, quality standards in the winery, and many other attributes of the product and the winegrower.  

Given these attributes, possible strategies must then determine the optimal target consumer segment. Many studies have been published on segmentation models of wine consumers. In general, premium-priced wines tend to attract a narrower segment of knowledgeable consumers, sometimes called wine enthusiasts. By contrast, lower-priced wines may consider a broader and much more fragmented range of potential target consumer segments based on age, income, usage behavior and lifestyle.

With the question of target audience resolved, the critical task is to create a brand identity that is unique, authentic, relevant, and compelling to consumers who value the benefits offered. This step is key to ensuring a niche wine brand will stand out among thousands of other labels.

The above brief description of what planning and developing wine brands entails only scratches the surface of the essential considerations in any effective and sustainable branding strategy for wine producers.

Why do wine brands require a collaborative approach that draws on different departments other than marketing?

Wine is a very expensive agricultural product. Newly planted vines do not produce commercially viable fruit for at least several years. The approximate style and quality of the wine will have mostly been determined prior to planting the vineyards, but production strategies can still change over time due to shifting market demand and other strategic factors. Consequently, communication between the oenology leadership and the marketing and sales teams is essential to ensure that production and commercial strategies are in alignment. 

The financial area plays an important role as well, by providing information on costs of grapes, dry goods and finished wine, and by setting pricing guidelines to ensure adequate profit margins for all brands and SKU's. Consequently, brand teams must engage with all of these critical business areas inside the company. 

The brand team also uses various forms of external and internal market data to have a sense of category trends and competitive landscape. It looks to Sales for feedback on market trends, customer preferences, brand programs, channel opportunities, pricing standards and a range of other issues, reactions and problems. It looks to the winemaking team for news of exceptional or experimental products, and for the quality stories, terroir factors and numerous other data points related to specific brands and wines. 

From time to time the brand team may recognize opportunities to recalibrate existing brands or develop new brands in response to market preferences. This can take the form of a significant brand re-stage or relaunch, minor label updates, or an innovation exercise that results in a completely new brand. Such high-impact branding projects require a maximum level of plan integration and inter-department collaboration to ensure that wine quality, wine style, product/varietal mix, brand image, price positioning, target consumer and commercial strategy are all in alignment.

What factors are considered essential in building a solid brand plan?

An effective brand plan for any wine brand will include the overall strategic assumptions, issues, objectives and market-drivers. The plan should also include brand identity and positioning strategies, product mix and portfolio architecture, packaging strategy, pricing standards, category strategy, competitive set analysis and USP (unique selling proposition), trade and consumer communications strategy (including web and online), PR and media relations strategies, and a high-level distribution strategy by geographic region and channel.

More comprehensive and professional brand plans will also include long-range and annual sales plans, an expense budget (especially funding for price-promotion), and a financial plan by item and by sales region that includes COGs, FOBs, case volume, gross revenue, gross margin, marketing and/or sales expenses, net revenue and net margin.

What steps should be taken during the strategic planning process for a given brand?

  1. Conduct internal and external research and analysis.

  2. Define preliminary assumptions and key issues, usually including a SWOT analysis.

  3. Articulate brand positioning, brand pyramid, empathy mapping, etc. (i.e. determine brand identity).

  4. Develop a preliminary total brand plan (a "straw man" plan) for consensus and troubleshooting.

  5. Manage the packaging design process based on the final consensus regarding brand identity.

  6. Conduct planning meetings with key stakeholders to fine-tune strategic and tactical details.

  7. Present the final brand plan to senior management for adjustment and approval.

  8. Communicate and implement the plan with all internal and external stakeholders.

Isn't marketing primarily designing pretty labels and spending money on expensive things like advertising?

Professional marketing provides the brand strategies and creative briefs that designers and agencies must adhere to in creating new labels or advertisements. When the discipline of strategic marketing is not a priority for the company's leadership team, high-level branding projects often tend to overlook or undervalue important considerations. This in turn almost always results in avoidable and costly adjustments during the subsequent months and years. I have witnessed situations in which clients had invested more than $20.000 in having an agency create label designs, only to find their new brand could not be launched in many key markets due to trademark problems.

Strategic marketing also makes sure that all initiatives and investments consistently align with the core brand strategy and stay focused on the strategic priorities and market-drivers specified in the brand plan. Image advertising is rare for most wine brands, but other valuable wine marketing activities include the ongoing creation and dissemination of content, brand storytelling and corporate communications, as well as oversight of brand assets like websites, photography, media accolades, sales presentation tools, media relations, market-specific programs, and numerous other ad hoc marketing needs that "grease the wheels" in trade channels.   

What I really need is more sales volume. Do you ever work on commission? Otherwise, why should I hire someone like you?

I do not work on commission, but it does sometimes make sense for me to get directly involved with sales meetings and initiatives that make use of my experience, relationships and market intelligence in the US and other major wine markets.

Not every winery or wine business needs the services I provide on a regular basis. However, for independent wineries and small wine companies that cannot afford a full-time, senior-level marketing manager on staff, my services offer a cost-effective solution. My fee structure is scalable and flexible, and can be adapted to match the needs and budget of almost any company. For smaller companies, twenty hours per month of my focus and experience can make a big difference, ensuring that other sales and marketing investments are appropriate, identifying previously hidden opportunity costs, and generally optimizing ROI for all products and brands.   

How can I find an importer in the United States and start selling my wines there? 

There is no simple solution to establishing a route to market in the United States. Large importers and distributors have demanding requirements for any prospective supplier, and turn most away. Wineries should not be naive in this regard. Moreover, major national distributors like RNDC or Souther-Glazers are contractually obligated to meet the distribution and sales goals of their largest suppliers. Otherwise they are forced to pay substantial penalties. This results in more limited focus on independent wineries and small to medium-sized wine exporters.

Whatever your specific route-to-market strategy, your sales efforts and investments will be wasted if the brands presented are not fully prepared beforehand for presentation and market launch. This brand preparation includes a competent English-language website, professional packaging, a coherent brand presentation that explains your goals, brand assets and key strategies, and an appropriate marketing budget, including support dollars for the initial brand launch and market activation. ​

Viable alternatives for certain wine suppliers in the US market may include non-traditional route-to-market strategies that are more entrepreneurial in nature. For example, direct sales to regional and national retail chains or group distribution partnerships may provide opportunities for suppliers with compelling brands and/or innovative wine styles. 

​Importers, distributors and retailers in the United States, regardless of size, will always carefully assess any prospective new supplier to determine whether they are likely to be a trustworthy, pragmatic and reliable business partner. Packaging, websites, media accolades and other brand assets will all be scrutinized with this concern in mind. The US wine market is uber-competitive. Suppliers and brands must prove that they will be a smart investment for prospective new distribution partners, and deliver more profit margin with less unnecessary overhead costs than dozens of other brands that are also competing to be chosen.

My brand is already distributed in a number of countries but we need to increase export sales volume to keep pace with production. How would you approach this challenge?

Suppliers in situations that require incremental sales volume often make the mistake of permitting more aggressive price promotion, which effectively weakens their price position and perceived value/image in the market. Price erosion is very difficult to reverse. Heavy discounting trades the healthy profit margins you enjoy today for the possibility of future incremental volume weakens brand equity. 

Approaches based on marketing-driven strategies can be equally effective in increasing sales volumes, but without damaging brand image. Some of these include:

  1. Create new brand levels, sub-brands or line extensions

  2. Open new markets

  3. Create and introduce a new brand and/or new products that appeal to different consumer segments and trade channels than the existing portfolio

  4. Hold meetings with your most important customers to identify any brand weaknesses or market opportunities that can be addressed.

  5. Develop customized value-added programs that offer business or consumer benefits without excessive price discounts.

  6. Avoid "cannibalizing" sales of brands or wines that are already in distribution.​

Is social media the future of wine marketing?

Social media is a powerful marketing tool that has become even more import as a consequence of changes in consumer behavior during the Covid epidemic. Online wine purchasing is no longer viewed as unusual or risky. Also, as Millennial and Gen Z consumers grow older and consume more wine, this so-called "digital generation" is becoming more important for all wine suppliers. Here are a few additional thoughts on social media: 

  1. The online retailer channel bypasses pricing standards of the three-tier system and gives retailers enormous influence over the valuable consumer databases they develop, providing opportunities to suppliers who are willing to accept exclusive arrangements for certain brands and sub-brands.

  2. Content creation through storytelling and visual brand assets is a critical component of any effective social media marketing initiative.

  3. Strong brand equity is no less important for digital sales and marketing than it is in brick-and-mortar channels: brands must be as compelling on the "digital shelf" as they are in the physical retail environment.

  4. Commercial promotions that try to push consumer behavior often fail in social media platforms. Brands must explore ways of attracting and engaging consumers through social media by inviting them to enter into brand relationships based on shared values and compelling brand promises.

  5. Social media marketing almost always overlaps with traditional trade and communication channels, pointing to the need for integrated marketing programs that increase impact in target consumer segments through coordinated activities.

  6. Suppliers should not overlook B2B social media opportunities like LinkedIn as well as online communities specifically geared to the wine industry.​

My winery sells a high percentage of our wine in bulk. How can we convert this to more sales of bottled and branded wine?

The two main options to consider are (1) private label sales and (2) brand innovation.

(1) Private Labels — Although many private labels are owned by importers and retailers, nothing prevents suppliers from creating their own robust menu of private labels designed to accommodate the needs of various markets, channels and consumer segments. Other than the legal due diligence required to protect regional trademarks, private labels cost relatively little since they do not require dry goods purchases, label printing, bottling or inventory management until firm sales commitments have been made.

(2) Brand Innovation — The difference between a brand and a label relates to strategic integration. A brand is based on an integrated concept that aligns the specific, credible quality proposition and product profile with the brand's image, consumer promises and storytelling. When brand innovation is done well, it forms the foundation for more sustainable growth of brand equity and profit margin in future years. Bulk wine suppliers often combine individual batches from numerous sources , which results in a relatively generic selection of wine types and grades. Creating a viable new brand proposition may require changing procedures to give more terroir specificity to a new brand, or alternatively, the development of unique, well-differentiated wine styles and blends that satisfy demand in a given consumer segment.

My brand is my family name and I am proud of it. Should we throw this away and start over? 

Family and winery heritage are powerful assets that must be leveraged as part of a compelling overall brand identity. Unless the brand name has been damaged in some way due to past problems in the marketplace, it usually has great value based on whatever positive recognition has been accumulated over time. All logo elements like graphic icons, font styles and taglines that are connected with the brand name also can carry a high value. That said, a reality check my be useful regarding issues that brands named after families or individuals frequently encounter.

  • Often the family name may fail to be linked with a strong sense of purpose or shared values that resonate with target consumers. These values must be defined, reinforced and made memorable by means of consistent marketing communications and initiatives.

  • The brand image must align with the intended brand identity. For example, sometimes a brand's personality as projected through visual imagery and written communications does not complement the core values and market positioning on which the brand was established.

  • Even healthy brands need to be updated and refreshed over the years to stay relevant. These investments reenergize loyal customers and reach out to new potential audiences. Brand re-stages and packaging upgrades must try to build upon positive attributes, mitigate vulnerabilities, and reframe core consumer promises. Changes can either be conservative and "evolutionary", or bold and "revolutionary"...or someplace in between. Decisions on when and how to refresh your branding must be based on a range of strategic needs, including price increases, activity by competitors, changes in quality or product mix, or underperforming sales that cannot be blamed on any other specific problem.

How can I attract more young consumers? They don't seem to care about wine or respect our traditions.

Substantial data and perspective is available online related to the different lifestyles, attitudes and motivations of younger wine drinkers vs. their parents' generation. You may also wish to review my own article on the subject, published in 2021:  Post-Covid Innovation Trends in the US Wine Market

The following are some important trends among younger wine consumers:

  • Increased engagement with socio-cultural issues

  • Bias towards diversity, acceptance and inclusivity

  • Lower discretionary income 

  • Migration towards non-traditional categories, such as sweet red wine, low alcohol, fruit blends, seltzers, etc.

  • Seeing wine as a "social drink": entertaining and attractive

  • Open to unconventional usage occasions and package formats

Younger consumers actually do appreciate the authenticity and richness of wine cultures in Europe and South America. However, an over-reliance on tradition by wine suppliers can be a double-edged sword when engaging younger audiences, especially in the United States.

Our FOB prices are too low to make a reasonable profit, but customers say sales will be lost if we raise the price. What can we do? 

I have never met an importer or distributor manager who told me my prices were too low. Sales professionals in particular tend to be change-averse, sometimes for very good reasons. It is true that price increases almost always result in lost sales volume. However, a careful price elasticity analysis can more precisely estimate lost sales by giving a sense of the percentage and duration of declining sales before brand growth is likely to rebound to its previous trend line. Remember, due to higher margins per case, total net revenue often rises following a price increase, even though sales volumes may temporarily lower.

Another way to increase price is by creating new brands, sub-brands, or brand tiers with higher price positioning than your current offerings. In this way, wineries may be able to sidestep a more direct price increase that places ongoing business at risk.   

How much do you charge? New equipment and additional sales staff seem like more essential priorities for my business.

Questions of operational budgets are not black and white. Without a doubt, needs in the winery, vineyard or sales department are often critical in nature, and sometimes urgent. However, in my experience there is always some acquisition or investment that seems more important than strengthening brands. Ironically, stronger brands contribute more robust margins with lower promotional expenses, which in turn makes additional revenue available to fund other business priorities.

Oversight of marketing activities by a seasoned professional also tends to protect and optimize other investments in sales and marketing, including staffing, external services, printing costs and other market-related programs. 

My standard rate is €60,00 per hour based on minimum retainer agreements of 20 hours per month for six months. To date, most of my past clients have migrated to full-year arrangements with a work schedule of 10-20 hours per week.

I would be delighted to answer any questions you may have about wine brands, export markets, the planning and creative processes, or other strategic marketing issues in the global wine sector today.

Just send me a note using the Contact page.

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