• Emily

The Unique Challenges of Wine Marketing: Spoiled for Choice

Updated: Feb 17, 2019

Wine should be easy to market, right? People want to sell it, other people want to drink it, no way you can mess that up. But it's a hard world out there, with almost too many choices - read on for my thoughts on the challenges of marketing wine.

When I set out to go into wine, I hadn’t necessarily anticipated to go into marketing, but as I was working in tasting rooms, some of the in-house marketing fell into my hands. I had done some marketing internships before, but at companies where marketing meant radio ads, flyers, and physical mailings rather than events and loyalty clubs. As I moved on, first into my MBA and then into the London market, I learned of a whole host of challenges when it comes to marketing specifically wine that I hadn’t come across from direct-to-consumer marketing. Some apply to other beverages like spirits and beer, but wine remains, quite simply, very complex to sell.


There are many points in a wine’s life where it could potentially be marketed. A wine could be marketed from the winery itself, to distributors, importers, agents, and direct to consumer. It could be marketed by agents to distributors or importers, and then by them to retail shops, and then, finally, to the consumer. It could be marketed as part of a regional marketing campaign intended to raise many ships by bringing a higher tide. It could be a grassroots campaign or a spendy advertising campaign. There’s something to be said for the challenges that arise at each of these points in a wine’s journey to (hopefully) the consumer’s glass.


This post was meant to cover everything above, but I realized that I was so fascinated by it that I kept writing more and more, and it’s become a tome (at least by blogging standards). Instead, I’m starting with a bite-sized chunk and looking at a few specific challenges faced on a wine’s way to market. In a later post, I’ll cover the challenges once it’s on the market - including wine press, gatekeepers and tastemakers, who’s buying wine (and who’s not buying wine).


Buy without trying - sight unseen


For products like beer or, say, a candy bar or a new flavor of ice cream, the cost of trying something new that you may not enjoy is less than a fiver, even if you’re ordering a pint in a pub (for London, make than a tenner). For a bottle of wine, it could potentially be a lot more.

Possibly the first thing that makes marketing wine challenging, and a reason that many of my instructors were sure to bring up in the first five minutes of the seminar: unless you are buying a wine you have tried before, you have no idea if you will like the wine you are buying. By the time you consume the product, it’s too late! Some wine shops combat this by having samples available or hosting tastings, others by including point-of-sales material like tasting notes and critic reviews. Some online sellers (notably The Wine Society and Majestic Wines in the UK) offer no-questions-asked return policies if customers aren’t fans of the wine for any reason. Not all online sellers offer this (I looked at the returns policy of a good handful of sites), which does make buying wine online a risk, unless you already know the wine you are buying. Wineries (or the importer and retailer) have the daunting task of building a brand that customers feel comfortable shelling out money for, even if they’ve never tried it.


Also a risk when buying wine is the possibility of flawed bottles, either from cork taint, improper storage, or other wine faults. While there are steps you can take to minimize some risks (thoroughly checking the provenance of older bottles, particularly broking wines, checking wine levels, maybe even buying wine with screw caps to avoid corked bottles), some flaws will be virtually undetectable before the bottle is opened.


Then there’s the high cost of entry. For products like beer or, say, a candy bar or a new flavor of ice cream, the cost of trying something new that you may not enjoy is less than a fiver, even if you’re ordering a pint in a pub (for London, make than a tenner). For a bottle of wine, it could potentially be a lot more. To add to that, some shops (more in the UK that in the States) only offer sales by the case, which is even more of a risk if it’s not a wine you already are familiar with. This tactic works well if the ability to shift volume allows a seller to offer an excellent price or if the winery has some notoriety.



Manpower


Budget-wise, wineries must decide how much money goes into making the best product they can versus marketing the product. There is certainly a balancing act there, a point at which your product isn’t good enough quality to market and a point at which it doesn’t matter how good your wine is if no one knows it exists.

Very simply, many wineries lack the personnel and budget to handle the marketing. While there are many large-scale, corporate wine companies, there are many more that are small operations, often family run. These wineries might have to limit their marketing activities to visiting a small number of trade shows or submitting their wines to the critics and wine competitions. If they have the time and a little more budget, they might make some visits to prospective markets to show their wines to importers or agents.


In this same vein, these smaller operations are run by the same people who are in the vineyard and the cellar making the wine. Because of the agricultural nature of the winemaking process, the wine industry has come quite late to digital marketing; if the winemakers are out in the vineyards, how can they also be in an office, tinkering with websites and AdWords?


Budget-wise, wineries must decide how much money goes into making the best product they can versus marketing the product. There is certainly a balancing act there, a point at which your product isn’t good enough quality to market and a point at which it doesn’t matter how good your wine is if no one knows it exists.


Crowded & Fragmented Market


You could make the most popular Malbec in Cahors, but you could still lose out to the Malbecs in Argentina because the country has built up brand recognition for Argentinean Malbec as a general category.

This is another enormous factor in wine marketing; how do you make your wine stand out in a saturated market? When someone can walk into a supermarket and pick one bottle out of an entire aisle, why would yours be the one they pick? What about your one little wine in a warehouse like Total Wines or BevMo? The answer isn’t simple - you might think that having, say, an award from a wine competition would put you up at the top, but what happens when everyone thinks the same, which spurs on number of competitions in existence, and then suddenly everyone has an award?


The wine trade, while there are large distributing companies (Southern Wine & Spirits), and large wine producing companies (Constellation Brands), is highly fragmented. For example, on the retail side in the UK, you have your choice of wines from Berry Bros & Rudd, Corney & Barrow, Justerini & Brooks, Stannary St Wine Co., Roberson Wines, Howard Ripley, The Vinorium, Majestic Wines, Virgin Wines, Lay & Wheeler, Laithwaites, The Wine Society, Hennings Wine, Hedonism, Honest Grapes, to name a handful. You could pop into Waitrose, Sainsburys, Tesco, Asda, Aldi, or Lidl for a bottle. If you are outside of London, you likely have a small, local wine shop. As a wine producer, your wine will fit into the portfolio of some, but not all, these retailers. If it ends up in the wrong one, it might fail to take off. For instance, if you have an expensive bottle that ends up at the high end of the portfolio at Tesco, will it remain dusty on the shelf because Tesco buyers are looking for less expensive options? If your wine then doesn’t sell, it might get dropped from the portfolio, and you’re back to the drawing board.


To take another slice of the fragmented market; wineries are competing on a playing board that is larger than it might seem. If you’re a winemaker, you might be trying to make a wine that’s better or more popular than that of your neighbouring wineries, but that’s not the only thing you’ll need to worry about. Wineries are competing against other regions and grapes as well as other producers. Say you’re making Syrah in Washington State; even if Syrah is becoming more popular, more people could still reach for an Australian Shiraz because of the effort and budget Australia has poured into marketing their wines. You could make the most popular Malbec in Cahors, but you could still lose out to the Malbecs in Argentina because the country has built up brand recognition for Argentinean Malbec as a general category.


Once it’s on the shelves

Once it’s in the importer’s warehouse, or on the shelves at the local wine shop, there is a whole host of other challenges in reaching the customer, whether it’s the final end customer or a fine dining restaurant buying for their wine list. In the next post on this topic, I’ll dig into my thoughts on those challenges.


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