Second label, bulk wine or new brand?

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 75^th 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.

Brand positioning by video and TV on line

Videos are more and more present on the Net. Community sites, like YouTube, are the perfect example of this new trend. The wine business could use this new technological trend to promote wine makers, producers, wines and all the industry-related products and/or services. Marketers and communications people should use it as one of the best PR tool.

Let's be clear: I'm not talking about videos done by a journalist or an interview - this is PR, it's not brand positioning. Brand positioning by video relies on a video written and conceived for your brand, your winery, or your store by a professional. There are a scenario, a text, a music. Why? There are four communication elements, as Jerry Bader explained on his article for brandchannel.com, "Brand Positioning Using Web-Video":

• the scenario, telling your brand story or the story of your business,
• the sight which provides the visual context and reference,
• the sound providing, through human voice, "focus, emphasis, familiarity and personality, all of which are necessary in the creation of a meaningful, memorable experience",
• the "score: Music, Emotion and Focus" - a musical score creates an appropriate emotional atmosphere providing audio cues that direct attention and re-enforce memory recall".

To illustrate his theory, Jerry Bader created a video presented in 3 versions: visual only, visual+speech, visual+speech+visual. It shows very clearly how the combination of the 3 elements makes the video very efficient.

Is there any interesting brand positioning videos on the Net? I can think of a few - some very sophisticated as the videos of Château Haut-Brion or more practical as those of Gary Vaynerchuk and Olivier Magny. Château Haut-Brion took the trouble to shoot very professional videos with a scenario, narration, beautiful pictures and music. The budget required by this type of brand positioning is, of course, out of reach for a lot of companies. That's why it is interesting to look how smaller and younger companies promote their brands.

As our friend from OpenWine Consortium said last night during our Internet live broadcast, thenewwineconsumer.com, Gary Vaynerchuk promotes his wine store, Wine Library in New Jersey, almost only on the Internet by his videos. The brick and mortar store doesn't even have a window on the street. His model is strictly a "click and mortar" store: his videos made Gary an international star of the wine business and his store is largely known on the Net, certainly increasing his on line sales.

Olivier Magny also owns a store in Paris, O Chateau. He promotes himself and his store through the videos of his blog, winerendezvous.com, like his funny Pinot Noir video on Place de la Concorde. On his blog roll, we can see several of our OWC friends, Petrogasm and Catavino, for example. A man of taste!

Do Gary and Olivier answer the criteria set by Jerry Bader? Almost: they provide a scenario, a text, a funny presentation full of humor and young energy - but no music. Which is also the case - weirdly enough - of a very professional endeavor: WineTasteTV.com. Their videos are introduced by a music theme but there is no sound - besides the interview or the speech - during the presentation. The music doesn't come in support of the content. As stated in their press release, "The channel is aimed at upscale consumers -- from Boomers to Millennials -- seeking relevant features to enhance their wine knowledge or discover new wine brands and regions. WineTasteTV.com enters the market as wine continues to grow in popularity among a wide range of adults, and is the first effort to bring an original, broad-based on-demand Internet channel to millions of consumers through multimedia storytelling and information."

Even missing an element, the videos of Gary Vaynerchuck, Olivier Magny or WineTasteTV.com are good branding positioning tools. The image carried on the Net is clean, professional and diverse, as well as driving consumers to the brands.

Clarendelle in China

It seems to be my "brand" week. I read carefully the thread started by Hoke Harden on Open Wine Consortium on the subject and all the comments he inspired. Too many brands? Of course, in the US only, there are over 7,000 wine brands on the market. Overwhelmed? Of course, I'm overwhelmed: I usually buy my wine after consulting my friends or my wine retailers. I never buy wine in a supermarket because I can't get any advice. Need to educate the consumer? Of course, but it's an impossible task. The debate is still open and I'll add to the confusion with a little post on one of my favorite brands, Clarendelle.

Clarendelle is the brand created by Robert of Luxembourg, the VP of Château Haut-Brion in Bordeaux and one of the owners. Clarendelle wants to be the answer of the Old World to the New World wines. A good thread for the group on the European Community in Open Wine Consortium! What does it mean? Haut-Brion is one of the oldest wine estate in Bordeaux, the smallest and the oldest of the First Classified Growths (along with Margaux, Laffite, Latour and Mouton). It has a tradition of excellence. Robert launched Clarendelle as an expression of the best of Bordeaux but easily drinkable and at a very fair price. The wine is available in red, white and pink and tastes wonderful.

Classical but contemporary, Clarendelle is considered a super premium wine. As such it is very much in demand in China where the tastes are evolving. As Cynthia Sin-Yi Cheng stated in her CondeNastPortfolio.com article, "Shanghai is leading Chinese tastes in wine":

"The wine scene here is abuzz with excitement and possibility. The number of premium-wine importers has jumped from three in 1999 to more than a hundred today. Two years ago, there was nary a shop offering tastings; now a dozen retailers hold such events. New wine bars abound. As of 2006, there was a Shanghai chapter of the highbrow Commanderie de Bordeaux, and the mostly trade-and-expat Shanghai Wine Society was founded in 2005."

Because of this continued interest in wine among the most fortunate Shanghai inhabitants and expatriates, new comers on the professional wine scene invent new events, new venues and create new excitement. The former chief sommelier of Jean Georges Shanghai, Yvonne Chiong, is working on a wine-buying program for Wang Hui Ming, a restaurant group with more than 20 establishments in Shanghai. Chiong is now pairing local cuisine with premium, imported wines—roasted pigeon, say, with a 2003 Clarendelle! Q.E.D.!

Eric Asimov, Sichuanese food and China

Today, for the first time ever, I posted a comment on the blog of the famous journalist Eric Asimov. I'm still a little amazed by my own audacity and wonder if I won't get some problems because of my silly comments.

Whatever... What was it about? It is the Chinese New year and Asimov had some Chinese food to celebrate and suggested some wines to accompany the food. It happens I just had dinner at a wonderful Sichuanese restaurant in Bordeaux, France, "Au Bonheur du Palais", owned by Tommy Shan and his family. If you want to read my post, go to Eric Asimov's blog. I'd like to move ahead on some thing more related to my usual topic and obsession, wine brands.

In China, consumers are not used to drink wine with their food: it is a western habit. Luckily for France, the Chinese still think that French wines are the best. That is why importers of the Classified Growths and all the luxury wines are selling their wines with no problem – sometimes even more expensively than in Europe or in the US! Wine is definitively on its way in China!

An anecdote tells it all. On April 18^th, 2007, in Beijing, some very happy Chinese tasted Chateau Haut-Brion blanc and Chateau Haut-Brion rouge: “it tastes better than rice wine or beer, and it’s better for your health”, said one of the lucky participants. Those words are milk and honey to the ears of many importers and owners of wine estates. Prince Robert of Luxembourg, whose family owns Chateau Haut-Brion, is aware of the growing interest of Chinese executives for luxury wines: “I think people are starting to understand the notion of quality brands. The luxury brand has ignited interest in the Chinese market. There's been a lot of work done by a lot of these luxury groups -- they're very visible here. I think the timing is right for us.”

Of course the market is still very small, but it is expanding dramatically. In 2005, China jumped into the world's top-10 wine-consuming countries. In 2006 Chinese wine imports doubled over the previous year, from 1.15 million cases to 2.2 million, and with annual consumption at a mere 0.7 liters per person, there is plenty of room for growth. No wonder wine-market analysts foresee a 36 percent increase in Chinese wine imports by 2010.

Wine, a luxury brand?

I read today on the decanter.com Newsletter that Dom Perignon opened a bar in the famous Harrods store in London and offers a glass of 1975 Oenetheque vintage of Dom Perignon for £250. If you have some financial problems, you can settle for the 1995 Vintage of Oenotheque for the mere sum of £60. If you are lucky, you might meet Claudia Schiffer at the bar since she was the advertising icon of the Karl Lagerfeld video on Oenotheque Champagne.

We all know that Champagne aimed at making its wines a luxury product. Question for luxury buffs: do you sell a luxury wine by the glass? Do you need "people" to make it great or expensive? NO! Why sell a very expensive and luxurious champagne by the glass? It is the same strategy as all those branded cheap Dior products for 50 or 100 € you see all over. Does it blur the image of the brand? YES! A luxury brand exists only through the phenomenon of scarcity: a glass is not as scarce as a bottle. Would you sell a bottle of perfume by small bottles?

Why is it bothering me so much to see a wonderful champagne sold its image to the crowd? Because I see everyday in the wine business how luxury wines protect and develop their fragile image without compromising it. Think Château Haut-Brion, think Château Palmer: all those brands create a very emotional and affective link between them and their consumers without selling a glass of their precious nectar in a department store, as elegant as it could be. Wine is not a coffee shop or department store product. Before being a commercial endeavor, wine is about taste, pleasure, people and places. It is about tradition, emotion, history --past and present. Indeed the contemporary brands might become the wines of our children and grandchildren. They will tell the next generations what our life was about.