Second label, bulk wine or new brand?

by Eve Resnick on April 18, 2008

in General

I just read an article in the North Bay Business Journal that raised a very interesting question: is it better for a winery to create a second label or to sell the wine in bulk when you have too much of a lower quality wine for your main brand? This discussion happened during the Business Journal’s 2008 Wine Industry Conference on April 9. Some said that their “winery had considered a second label but determined selling the excess wine in bulk was better than risking diluting the brand.” Others argued that “a second label can help a winery with distributors, but it should have a different name,” and be tied to the main brand at least on the back label.

The debate is still going on in the trade anyway. I can think of a few successful examples I know in the French wine industry. In 1998, the famed Château Palmer, a classified Growth of Margaux, near Bordeaux, launched a new brand called Alter Ego de Palmer. It’s not a second wine but a full new brand, clearly linked to the main brand but different in its positioning: the wine can be drunk young with all the qualities of a great Margaux wine, finesse and elegance. It is not confusing for the consumer and very reliable for the distributors.

An even more recent example is “Clarence”, the second wine of Château Haut-Brion, one of the five First Classified Growths. For many years, the second wine of Château Haut-Brion was named Château Bahans Haut-Brion after the plot on which the vines were planted. The name was difficult to remember and to pronounce, even for French people. A few weeks ago, Domaine Clarence Dillon, owner of Château Haut-Brion, officially announced the new name of the second wine: Clarence. “In 2009, stated the press release, Domaine Clarence Dillon will be celebrating the 75th anniversary of the first visit of Clarence Dillon to Chateau Haut-Brion. This milestone will enable us to write a new page in the modern history of our second wine. In recognition of three quarters of a century of presence of the Dillon family at Chateau Haut-Brion, Domaine Clarence Dillon has decided to mark the occasion by renaming our second wine “Le Clarence de Haut-Brion” and by bottling our second wine in the elegant “Haut-Brion” bottle, specially engraved with the mention:“Clarence”. It was Clarence Dillon himself who fifty years ago brought this now iconic bottle design to Chateau Haut-Brion and first began using this elegant form for the 1958 vintage.”

Second label and second wine are common business practice in the French wine industry. This practice is considered as a reinforcement of the primary brand instead of a dilution.

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