The European press - whether on line or off line - on the wine business in Europe gives the readers very mixed signals on the state of the industry. I'd like to try - "try" being the key word - to sort out what I read lately and what it means in comparison with the "New World" wine industry.
First of all, today is the opening day of the famous "Futures" week in Bordeaux. Journalists and wine professionals gathered to taste the 2007 vintage still in barrels and that will be on the market at the end of 2009. This tasting will allow importers and buyers to set a price for those expensive and luxury bottles of wine - usually between 30 to a few hundreds euros for the most famous names (Haut-Brion, Palmer, Petrus and other Yquem). Those estates represent hardly 5% of the Bordeaux wine market: there are thousands of other properties whose wines will be sold between 2 to 10 euros for the luckiest.
Surfing on the wave of those luxury wines are a few upscale on line wine stores, such as 1855.com introduced on the Paris stock exchange and vins-fins.com (fine-wines.com). Both companies just released their new projects: expanding their business by opening their catalog to international fine wines. They might very well succeed because the wines they sell are the very symbol of a lifestyle full of elegance and classicism.
At the same time, France, Italy and Great Britain are campaigning against alcohol consumption. "Alcohol" is the key word. There is a strong confusion, in the mind of the law makers, between wine, beers and spirits, all labeled "alcohol" and demonized. In France, the "Evin" law prohibits advertising on any kind of alcohol, including wine, in the press and on TV. The law is used by a very strong and active network of anti-alcohol lobbyists, subsidized by... the French government. This lobby won two court cases lately: one against Heineken that had to close its French site (by so, making all French wine sites and blogs illegal) and an other one, against a newspaper who published an article recommending a few Champagne brands before the holidays (what about freedom of the press and freedom of speech?). At the same time, Champagne wines are so much in demand that a law included more villages in the Champagne "Controlled Appellation" area. In Italy, a law against wine (this link was provided by my friend of OpenWineConsorsortium, Ronald) might be passed by the Parliament. In Great Britain, one of the most important markets for imported wines, a campaign against drinking was recently launched to prevent "binge drinking" and female consumption. "Binge drinking" is a real and true concern for everybody since it affects mostly young people: they get badly drunk in the evening - so much as they can't stand on their feet anymore or are getting very violent. Women are a totally different case: they are the buyers of wine and food for the family and as such are very much targeted by marketers, producers and retailers. They are also - except for a few of very young women who sometimes join the "binge drinking" crowd - moderate drinkers. Unfortunately recent medical studies, in UK and in the US, linked alcohol consumption to breast cancer: more than one glass of alcohol a day could increase the risk of breast cancer. Worse, in England, Dr. Janet Treasure identified a new female drinking pattern, the drinkoresia: women are drinking without eating to compensate the calories taken with the alcoholic beverage. The damages done to the stomach are very fast and deep, which is a subject of concern for public health.
After the worries and the horror stories, the dream: Spain made wine a part of their patrimonial history and just allowed 32 millions of euros to support the export of Spanish wines. Spain wants to become the n.1 exporter in the world. By doing so, Spain joins the club of "proactive" countries, such as Australia or California - wine producing areas giving themselves the financial and human means to develop their wine industry.
What kind of logic can we find in this contradictory information coming from wine producing or loving countries? There is a confusion between wine and spirits: wine is not as strong as spirits in alcohol contents (even in warmer countries); it is part of a lifestyle and a cultural subject. Young men and women are not getting drunk on wine in bars and night clubs but on hard liquors and cocktails. Law makers should be educated about what wine is about: when we educate our young people, we should also educate our legislators and other people who think they know about wine better than the professionals. Those countries need a strong wine lobby to protect its interests.
On the other hand, those countries are also producing the most exclusive and expensive wines: the most famous brands are from France and Italy (as well as Spain). Those brands won't have any problem to keep selling but by promoting repressive policies, France and Italy are badly hurting the lesser brands and producers. Whether expensive or cheaper, good wines are the ambassadors of their country of origin. Do our governments really want to destroy part of our history and culture? I bet they don't but they don't really know what they're talking about. Without lessening the dangers of overdrinking, they should consider wine as a beautiful story shared all over the world by millions of amateurs.
Showing posts with label luxury. Show all posts
Showing posts with label luxury. Show all posts
Monday, March 31, 2008
Friday, February 22, 2008
Wealthy Chinese prefer French wine brands
China is one of the emerging markets for the wine business. I already mentioned on that blog that Chinese people are fond of wine and especially French wines.
A recent study conducted by VisaCard Worldwide and based on a survey of 1,800 respondents with an annual income exceeding $16,000 in Beijing, Shanghai and Guangzhou, identified the top brands of affluent consumers in key spending categories, such as automobiles, wine, consumer electronics and fashion.
This study confirmed the taste of wealthy Chinese people for French wines over other European wines and, even, local wines. 80.7 percent of the respondents think French wine is the best, with Chinese brands third after Italian wine and ahead of Spanish, Australian and German wines.
Why is that? In Wine Brands, I tried to answer - at least partially and as best as I could - this puzzling question. There is a “snob value” applying to Chinese wine drinkers. Indeed the drinkers’ profiles are typical of the emerging markets: rich people, executives, high-ranking officials and new millionaires. They drink expensive imported wines, while the middle-class people drink local wines, but everyone wants to drink wine. It is a matter of social status and image.
In Beijing and in Shanghai, wine is the gift that will give most pleasure and prestige, especially imported French wines.Wine is still a mystery to most Chinese. The average wine consumer in China is between 20 and 35 years old, relatively affluent and living in an urban area. Chinese consumers do not necessarily serve wine in the Western way. Iced red wine is popular--white wine is often mixed with coca-colas and red with sweet drinks. But, as in many emerging markets, education is provided by tastings in stores, while more traveling and studying overseas create an elite of connoisseurs.
Chinese wine experts believe that the market is made up of about 1,000,000 consumers with a potential of 30 million. More and more international managers and executives who studied abroad discovered wine while traveling in Europe. Back in China, they retained their interest in wine and broadened their knowledge. They are mostly interested in red because of the symbolism of the color in Chinese culture. Red is associated with luck, happiness and wealth. White is the color of mourning and death, which fights against white wine. It also uses the same word used for liquors and rice wine – “Bai Ju”. White wine, therefore, has a problem distinguishing itself from rice wine. The language too is a problem. Some wine names are very easy to remember: La Tour is “La Tu” and Lafite “La fei”, for examples in the Bordeaux area. Some names are so complicated that people are afraid to order them: “It’s embarrassing to ask for a good wine when its name cannot be understood by my friends because of its pronunciation”, said a Chinese executive to L’Amateur/The Wine Lovers journalist, Sophie Liu (Fall 2007).
In spite of all those problems, wine is becoming a major new trend in China.
A recent study conducted by VisaCard Worldwide and based on a survey of 1,800 respondents with an annual income exceeding $16,000 in Beijing, Shanghai and Guangzhou, identified the top brands of affluent consumers in key spending categories, such as automobiles, wine, consumer electronics and fashion.
This study confirmed the taste of wealthy Chinese people for French wines over other European wines and, even, local wines. 80.7 percent of the respondents think French wine is the best, with Chinese brands third after Italian wine and ahead of Spanish, Australian and German wines.
Why is that? In Wine Brands, I tried to answer - at least partially and as best as I could - this puzzling question. There is a “snob value” applying to Chinese wine drinkers. Indeed the drinkers’ profiles are typical of the emerging markets: rich people, executives, high-ranking officials and new millionaires. They drink expensive imported wines, while the middle-class people drink local wines, but everyone wants to drink wine. It is a matter of social status and image.
In Beijing and in Shanghai, wine is the gift that will give most pleasure and prestige, especially imported French wines.Wine is still a mystery to most Chinese. The average wine consumer in China is between 20 and 35 years old, relatively affluent and living in an urban area. Chinese consumers do not necessarily serve wine in the Western way. Iced red wine is popular--white wine is often mixed with coca-colas and red with sweet drinks. But, as in many emerging markets, education is provided by tastings in stores, while more traveling and studying overseas create an elite of connoisseurs.
Chinese wine experts believe that the market is made up of about 1,000,000 consumers with a potential of 30 million. More and more international managers and executives who studied abroad discovered wine while traveling in Europe. Back in China, they retained their interest in wine and broadened their knowledge. They are mostly interested in red because of the symbolism of the color in Chinese culture. Red is associated with luck, happiness and wealth. White is the color of mourning and death, which fights against white wine. It also uses the same word used for liquors and rice wine – “Bai Ju”. White wine, therefore, has a problem distinguishing itself from rice wine. The language too is a problem. Some wine names are very easy to remember: La Tour is “La Tu” and Lafite “La fei”, for examples in the Bordeaux area. Some names are so complicated that people are afraid to order them: “It’s embarrassing to ask for a good wine when its name cannot be understood by my friends because of its pronunciation”, said a Chinese executive to L’Amateur/The Wine Lovers journalist, Sophie Liu (Fall 2007).
In spite of all those problems, wine is becoming a major new trend in China.
Tuesday, February 12, 2008
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.
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.
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