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Mike Paul: why generic bodies should look again at pushing regionality

Published:  22 January, 2013

Read any interview with the various heads of generic wine bodies in the UK, like Michael Cox, Yvonne May or Jo Wehring - or an individual producer of premium wines in Australia, Chile or South Africa - and you'll spot a common theme. They're almost certain to vent their frustration that the quality of their premium offer is not being sufficiently recognised, either by the trade or the consumer.

Read any interview with the various heads of generic wine bodies in the UK, like Michael Cox, Yvonne May or Jo Wehring - or an individual producer of premium wines in Australia, Chile or South Africa - and you'll spot a common theme. They're almost certain to vent their frustration that the quality of their premium offer is not being sufficiently recognised, either by the trade or the consumer.

I was recently invited to speak at a conference in Australia, to offer my own ideas on the way forward for that country's wine industry. One of my main conclusions was that Brand Australia needs to be segmented.

I am really impressed by the generic work of Yvonne May and her UK-based team, and the diversity of style and quality of premium Australian wine has clearly never been greater.

But the reality is that, partly due to years of heavy discounting at the lower end, the target consumer in the UK does not regard Australia as a source of premium wines - at least, not to the extent that the Australians would like them to. There is, therefore, a very large gap between perception and reality.

This is not altogether surprising. In any category where a single brand proposition covers mainstream and premium territory, the lower end risks overpowering and dragging down what is happening above. This is exactly what happened to German wine in the 1980s.

A related problem applies to wine brands which attempt to "ladder up" from very strong mainstream propositions into premium segments and I would suggest Brand Chile and Brand South Africa are wrestling with this conundrum.

All three countries are currently playing around at the edges of regionality like swimmers dipping their toes in the water, but never quite plucking up the courage to jump in.

I'm not surprised: the water is bloody freezing. Segmenting a generic brand throws up immense practical difficulties. But first of all one needs to be convinced such a move is essential, and I'm not sure enough people are yet at that point.

Divide and Conquer

Personally, I think there are three reasons why producing countries should develop regional propositions which are stronger than their umbrella country brand.

Firstly, as noted above, it ensures that the premium sector is unencumbered by any mainstream baggage. France can offer a useful case study in this respect: did the image of Burgundy suffer, along with that of Beaujolais, as a result of the over-promotion of Beaujolais Nouveau? Undoubtedly not. While both are segments of Brand France, they are in reality brands in their own right.

Secondly, creating premium entities gives marketers greater room for manoeuvre.

I see three strands to premium wine marketing:

* Individuality, which is about building brands with real points of difference.

* Personality, which is about involving people (usually winemakers) in one's promotion

* And finally Regionality, which is about generating a strong sense of place.

Premium brands, whether they're generic or individual, which realise the potential of all three of these strands, generally have the greatest chance of being successful. As things stand, in most of the New World and many parts of Europe, marketers are over-reliant on the first two strands as there is little or no added value in talking about their area of origin.

But in an increasingly crowded marketplace, one needs to be firing on all cylinders. While there is hardly a shortage of personality in the New World, and brand marketing is certainly improving, I feel that being part of a "one size fits all" generic brand puts all concerned at a serious disadvantage.

Thirdly and lastly I believe there is a highly profitable opportunity in creating brands which are wine-based, but have no real wine values.

From a marketing and production point of view the New World is probably best placed to build such brands yet, to exaggerate the point, if you were an individual producer, it would not even cross your mind to present say a lightly sparkling low-alcohol Moscato under the same umbrella as a premium range. You would rightly worry it would undermine your premium imagery. But non-segmented generic brands in effect don't have any option.

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