Levels of consumer confusion 'astonishing', says wine industry expert

29 May, 2016

There is an astonishing level of consumer confusion in an increasingly proliferated wine industry, according to wine consultant Mike Paul.

Speaking at the International Cool Climate Wine Symposium in Brighton on Friday, Paul discussed the challenges involved in developing strong regional identities.

He said there are very few examples of regions which really add something on an international level in terms of consumer franchise.

“With a lot of these regions we are just adding confusion in the consumer’s mind. There is an astonishing level of confusion. One can think of Rioja; champagne; more recently of prosecco; New Zealand perhaps connected with Sauvignon and Argentina connected with Malbec.

“But actually there are an awful lot of initiatives out there and you just really wonder whether they are achieving their goals.”

Paul acknowledged some of them may have local goals and didn’t know what their success criteria may be but expressed a deep concern that a lot of effort is going to something which isn’t bringing much of value.

“If you look at the regional brands you have got to be careful that the region doesn’t become unbalanced.”

The wine consultant hailed prosecco a “success story of the century”, along with New Zealand. But cautioned, “Prosecco for all its strengths has its weaknesses. If you asked people to name a wine they would probably say prosecco and the comments would be mainly favourable. However, if you asked them to name a prosecco brand, good luck.”

He added: “Prosecco is almost overflowing its region. It’s like they created a monster, a friendly monster at the moment, but I have a feeling they have slightly lost control of it. By adding over 3,000 ha of grapes.

“Prosecco is more a style of wine people like than a wine from a region, which means it can be copied by other regions in Italy and beyond.”

He said prosecco is a very successful commodity which has a known value. However, he cautioned: “If you are selling prosecco at the average price then that is great but it’s going to be tricky to sell it at double the average retail price.”

In champagne, Paul said you have a branded hierarchy that consumers understand more. “It’s moving forward in a more balanced way, with brands and the cheaper own-label stuff.”

Paul pointed to Chile as a cautionary tale. “If you are entrenched in one sector it is very difficult to ladder up, as we say in marketing terms.

“Chile came from nowhere in the 90s. It is now the regional brand of choice for lots of consumers who want something which is going to be consistently good in the mainstream price levels.

“However, there are lots of Chilean producers who want to sell premium wines and their brand name and ‘brand Chile’ is not synonymous with premium values to the extent the producers would like.”

Paul said the wine industry has created this problem. “In the UK, we have taught the consumer to think in regional terms. If someone is very busy and they walk through the wine aisle or look at the wine menu they are going to make shortcut decisions because that is the way they regard wine.

“A strong regional identity represents a shortcut for a very busy and very confused consumer. A brand, either as an individual or a collective, gets summed up by consumers in one sentence. It surely makes sense for a brand to make sure that sentence is positive.”

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