Indian wines soon released in UK

I'm absolutely fascinated by the Indian wine industry. I already wrote a few posts on the subject on this blog: India, as a wine producing country and market; the Indian wine consumer; and many others where India was mentioned.

Today an even more amazing news was released by Indage, one of the two largest Indian wineries (the other one being Sula). Indage will release new brands in UK to complement the curry whose British love so much. The red and white wines, specially created to accompany the sometimes spicy and hot curry flavors, will be distributed in supermarkets as well as restaurants.

It is a very smart move if you know that the curry industry in UK is worth £3.5 billion every year: if British people select the new Indage wines instead of beer to drink with their curry, the wines could bring a lot of money to Indage.

According to journalist Aislinn Simpson, "Santosh Verma, the director of Indage, hopes to convince British consumers that South Asian wines are just as good as established labels. "India has the perfect soil for grapes," he said. "With the Himalayas in the north and Western and Eastern Ghats towards the south, we are taller than any European mountains. Our wines are on a par with any superior-quality wines from any part of the world"."

With a growing middle-class buying Indian wines, the local wine industry has a beautiful future.

Brands vs. Regions?

Last Friday, I spent the day listening to speakers from various countries about strategies to access the international markets. French specialists, such as Yves Benard, President of the INAO (Institute of the Controlled Appellations) or James de Roany, managing director of Chateau Beaulieu in Provence, the Italian Lorenzo Zonin, owner of the Zonin winery, the Spanish Juan-Maria Torres, CEO and co-owner of Torres winery, Adrian Keogh, Marketing Director for Europe of Pernod-Ricard and, last but not least the Australian Anthony Spawton shared their views on the subject.

Anthony Spawton is a wine marketing expert internationally recognized for his pioneer work in this field. He spoke about "Wine brand strategies: the new world experience" and was introduced by Peter Hayes, OIV Chairman. There is no difference between brands and regions, claims Anthony Spawton: brands and regions are the same. Why is that? A brand is "the encapsulation of the IP of a winery/region" and is also "the vehicle that will ensure its future earnings".

To show his point, Tony drew an interesting table of the "salient features of Brand Relevance":

Purchase Intent Criteria - Weekday Wines - Lifestyle - Luxury
Info search - Safe Brand /Grape - Position (niche) brand - Exclusive brand
Decision point - Price Point - Depends on occasion - Scarce, unique
Post purchase evaluation - Taste, consistency - Socially accepted - Complexity

This table shows that branding and marketing should be concerned with creatinf pleasurable consumer experiences (Schmitt, 1999). Which means you want to bring te consumer to the wine and not bring the wine to the consumer. To do so, the distribution chain is part of the supply chain: the wine is made available for sale and purchase by the consumer. The brand champions achieve a mainstream availability and accessibility.

Who are the regional heroes? It is the wines from somewhere and not from anywhere.

The best illustration of this principle during the conference was the new brand launched by James de Roany, Rosé de Provence. Rosé is the pink dry wine from Provence, the region where 80% of the wines produced are pink. As explained in Wine Brands, the idea was to brand a new category, Rosé (dry pink wine vs. sweet blush wines) and a region, Provence, its birth place and "terroir". James' idea was to capitalize on a "terroir" to raise the value of its consumers' territory - to reach the young people and the women, sophisticated consumers of a brand with an history. The region carries the history while the category expresses the trend.

Conclusion: brand vs. region? No, the region is the brand.

Generation Y and Branding

Also called "Millennials" or "Generation Why", this group is widely represented in a lot of countries and constitutes a major target for local and global brands. In the US, there are 70 million people under 30; in Vietnam, they represent 50% of the 90 million people; in China, they are 200 million strong and there are 367 million people under the age of 18, a huge potential market for this growing economy. In South Africa, they account for 35% of the population.

In countries where their number is not as significant, they are different from the Baby Boomers: in East European countries, the Millennials are the first post-communist generation and in Southern Europe, the first post-dictatorship generation. In emerging countries (South Korea, Russia), they are the first generation growing in a stabilized social environment.

The generation Y was born with Internet and finds it easy to interact with each other and then with the world. Forums, blogs, Facebook, iTunes and many other community sites are their favorite places to express themselves, share their ideas, tastes and distastes. Those young people think they can make life fit their specific needs and wants. Brands have to get used to engage in a two-way conversation with those potential consumers. Their favorite US brands, Trader Joe's, Ben and Jerry's and Whole Foods (to take into account only the brands connected to the wine and food business) communicate to their customers in a very personal and socially aware style. It's not so much what they communicate that how they do: Millennials like style, a real voice, and a bit of attitude. They love to blend personal and professional life: their workplace, the marketplace and the lifestyle have to stay connected in a meaningful way.

What does it mean for wine brands? In the US, the percentage of Millennials who consume wine has increased from 10% in 2004 to 17% in 2006. Even more interesting, Millennials and GenXers are more inclined to drink wine than beer.

How did they become interested in wine? For some of them, their parents drank wine and they grew up with wine on the table. “My parents are both big into wine”, said 22-year-old Jennifer Hammons to journalist Deborah Pankey, Daily Herald Food Editor on November 30, 2005. ”At first I didn’t like it, but then it grew on me.”

There is much the same scenario for young people in France: wine is a food always on the family table. Young children are encouraged to taste a drop of champagne or wine during family gatherings. Later in their teens, they are given a third of a glass of wine or champagne with their meal. Why do they then reject wine to go on to beer, cocktails or liquors? Very often, as sociologist Céline Simonnet-Toussaint explains in her book Le Vin sur le Divan, young people under 25 reject wine because it is the symbol of the family. Young people want to experiment with their freedom, but they come back to wine at around 25, when they get their first job, their first “real” apartment and start settling into their new life.

Others discover wine by themselves – during a trip to a wine country, like Napa in the USA, Burgundy in France, Tuscany in Italy, Priorato in Spain or Porto in Portugal. They get interested, go to wine classes or tastings, join a wine club and explore wine stores to get good advice. Mostly, like the women, they listen to their peers, surf the Internet to read about wine and discuss their new passion in forums.

The wine industry is aware of the need of young people for more knowledge. At the same time, this new generation of wine drinkers is very different from preceding generations. It is the “coca cola generation": they have a much sweeter tooth, they are “zappers”, having known TV and the Internet all their lives, and they are used to getting what they want and paying a high price for it. After all, they pay $3.50 for their daily Starbucks cappuccino and download their songs for $1 or their movies for $5 every day on their iPod or MP3. They know that everything has a price and usually a high price.

Taking these parameters into account, some wine makers considered designing wines specifically targeted at Millennials and GenXers: fun labels, fruity forward wines and a high price. Millennials do not hesitate to pay up to $20 for a bottle of wine! Indeed, they do not yet have any big financial burdens: no children, often a two-income household, no parents to take care of, a good salary and a large disposable income. Unfortunately for the wine industry, they rarely buy the same bottle twice, because there is such a huge choice of brands. They want to be the first to discover a new brand or a new trend, the first to try them and share them with their peers.

Nonetheless, major groups have designed brands for Millennials as they have for women. Constellation designed 3 Blind Moose, Four Emus, Monkey Bay and other “fun” brands. There is no talk of terroir or winemaking on the packaging. The label does not tell a wine story, but a story of having a good time and fun with your friends. Those brands sell well. Gary Glass, former Vice-President of Marketing for Constellation’s Centerra Wine Company, estimates that 3 Blind Moose sold 175,000 cases in 18 months on the market.

At the same time, young people are not as comfortable as their elders when they buy wine. They can be adventurous, but they also seek quality and certainty. Whether they are American, European or Japanese, they will rely on a classic wine from Europe or a well known luxury brand from the New World. Wine is still a little intimidating for Millennials. It is the wine industry's responsibility to help the young generation to appreciate wine.

The New Appellation system in Europe

Anybody who tried to sell French or other European wines know how difficult it is. There are many reasons for this situation: difficult labels, weird names impossible to pronounce and a system of geographical origins rather difficult to understand for a foreigner.

The European Union is working on a new system with France leading the way. Let's be frank: France has one of the most complex appellation system. France has several levels of quality of wine: the "vin de pays" (coming from a certain area but with no real control on the grapes used or the quality of wine) and the famous Controlled Appellation. France has now several hundreds of them: some of them cover a very small geographical area and it is very difficult to locate this place on a map. Even French people can't master the system.

What is the purpose of the new system? Up to now, European wine producers didn't have the right to put the grape name on the bottle in the Controlled Appellation system. If you like French Cabernet Sauvignon, for instance, you have to memorize the geographical areas producing this grape: Bordeaux in a blend with Merlot or Cabernet Franc, Loire Valley, a little in the South. Do you prefer Pinot Noir or Syrah? For Pinot noir, Burgundy is your area; for Syrah, you have to look at Côtes du Rhône, for instance. What about the blends? That's where things are getting really complex: you can find Cabernet Sauvignon, Pinot noir or Syrah in many blends over several areas.

Writer and wine lover Tim York explained on the Wine Forum of the WineLoversPage.com Discussion Group how the French system will be reformed:

"A three tier system of appellations will be put in place.

The third (bottom) tier will consist of “vins de table” (table wines). With effect from the 2009 vintage, “vins de table” will be allowed to put grape variety and vintage on their labels. Grapes may be blended from any part of France. There will no longer be any constraints on production methods, for example on yields and irrigation, other than those of international wine industry norms (e.g. the banning of flavouring additives, certain chemical stabilisers, etc.). It is hoped that this will permit the appearance of French commercial wine brands to compete with those of the New World. “Vins de Pays” will disappear progressively after 2009.

The second tier will consist of “vins de territoire” (territorial wines). Into this category will fall the more ambitious artisan produced wines which are “vins de pays” at present, existing regional appellations such as “Bordeaux” and “Bourgogne” and regroupings of existing lesser AOCs. An example of the last is the regrouping into “Côtes de Bordeaux” of the appellations Blaye, Castillon, Cadillac and Francs. 50 to 100 appellations are expected to disappear in the next few years. The creation of new appellations will not be allowed.

The first (top) tier will consist of “vins de terroir” (terroir wines) which will reinforce the AOC system at the top level. The intention is to guarantee quality as well as origin. New style tasting committees for accepting or refusing wines will replace local vignerons, too subject to complaisance with poor quality and jealousy of outstanding performers, with more independent persons such as journalists, oenologists, wine merchants, etc. The AOCs will draw up new specifications to replace existing INAO application decrees; it is intended that these should be in place for the 2008 vintage." You can read the exchange - sometimes a little heated - on the Discussion Forum.

It is a fascinating topic when you consider that the so-called New World is now starting to protect their own terroirs and to create Controlled Appellations of their own. The US created the "Center for Wine Origins" because, as it stated, "when it comes to wine, there is no ingredient more important than location". As my friend Robert McIntosh wrote on the OpenWine Consortium blog, the old dichotomy between Old and New World is now fading. Welcome to the Wine 2.0 world!

Old and New Wine Brands

While walking around Bordeaux, I passed by the window of a recently opened wine store, "La Maison Gabin". I was utterly amazed to see in the window empty bottles of Château d'Yquem, Château Haut-Brion and Château Margaux, three names among the most famous of Classified growths and among the most expensive in the world, next to (full) bottles of a new brand, Nayandei, whose prices reach the incredible amount of... 10 euros.

Nayandai is a brand launched by young people in the Languedoc area, in the South West of France. The tagline of Nayandai is: "creator of wines". What did they create? A bubbly wine called "Bubbles", dry bubly wine and "Nolita Fraise", a sweet strawberry bubbly drink with a low alcohol content (6,5°). They also have a "Bubbles Pinc" (sic!), a pink, white and red wine. Nothing earthshaking.

What is earthshaking is how poor their site is. It's only in French - a widely spoken language as everybody knows. There is no information on the company, who founded it, who created the wines - no story of any kind. We can guess the wines are targeting young people and their sweet tooth. It happens that recent studies showed that young people love to know the story behind a wine. They don't mind drinking wines designed to their (supposed) tastes but they want to hear a story. Unfortunately, the "creators" of Nayandai didn't do their homework and ignored this important fact.

I suppose young people are behind Nayandai, people from the Millennium generation, almost born with Internet: why didn't they talk to their peers the language they share - an old-fashioned story said with the 21st Century tools?

New packagings for wine brands?

A lot of new wine brands created innovative packagings: Barokes and Lubie, to name just two brands I worked on for Wine Brands. Some "old" brands also launch wines under new packaging: this is the case of the long-lived German brand "Black Tower" now lauching a sparkler in cans. "The launch is part of a drive to turn the 1970s icon into a million-case-selling label by the summer", writes decanter.com.



Why is this trend of canning wines and sparkling wines so predominant at the moment? Is it only to show that wine is good, wine is easy to understand, wine is fun, wine is trendy? Or is it to improve sales of an ageing brand? Certainly for some of those brands. The Australian Barokes wines come in various styles (varietals and blends) and even in a 4-can pack. It is heavily marketed by the company. “Today's global wine consumers are increasingly embracing simple means of beverage enjoyment, often in the new economies where wine is seen as the modern trend from western culture. Further than that, Generation X and Y drinkers from many diverse ethnic origins are readily accepting ready-to-drink beverages of a spirit, wine or soft drink base as the drink of the current era. Success in the beverage market comes from being chic, relevant, drink accessible, and importantly single serve.” (From wineinthecan.com)

The same is true of the young Bordeaux-based Lubie. In strategy, as well as in its products, it is a little more subtle and elegant than its American and Australian counterparts.

Instead of aiming wildly at a “global” market, Lubie targets young and upper-scale consumers, mostly the young crowds in night clubs and the more mature wine drinkers in upscale wine and grocery stores in major cities. Their very first target is feminine, since they describe the wine as “feminine, natural, contemporary and self-indulgent”. Women are more sensitive to an elegant and unusual packaging. It is so much fun to show up at an evening with your pack of four small bottles of wine instead of a regular wine bottle!

Barokes and Lubie are now reaching their audience after a few years on the market. Isn't it a little too late for an ageing brand such as Black Tower to try to rejuvenate with a now banal packaging?