Why Purposeful Branding is Important for the Wine Industry
I have been in the wine industry for 13 years, which is not a lot of time, relatively speaking, but enough to notice the lack of marketing and branding in this sector. Coming from multinational marketing and communications departments where I worked on developing fast-moving consumer goods brands that most of us consume every day, I find it in bizarre contrast that in the wine industry, the main business focus is not on building brands, but building walls so that consumers feel intimidated and discouraged to approach the product category. Maybe one day creating this fantasy world around wine will be a good idea; today it is not.
Hence, when the Digital Wine Communications Conference organizers asked me to conduct a session, I thought it was a good idea to focus on branding. Yes, branding! That thing that does not exist unless there is a strategy in place. That thing that can bring new consumers into the market. That thing that fuels business development. That thing that drives mergers and acquisitions and moves millions of euros and dollars…and finally, that alien that for some un-explainable reason, most in the industry tend to avoid.
Mike Tyson once said that “everyone has a strategy until they get punched in the face,” and I think we all can relate. It is life’s way of letting us know that we need to change our perspective, our way of doing things. I strongly believe that the wine industry needs that punch in the face to break away from bad habits — habits that have been keeping it from moving forward with the times. One of these bad habits is the lack of branding. There are few well-known wine brands out there in the wine-jungle, but if you ask any normal consumer, a wine brand will not be top-of-mind.
For the session, I asked Robert Joseph, wine writer, and commentator, to talk about the importance of branding in general; Damien Wilson, Hamel Chair in Wine Business at Sonoma State University, to show us what the real wine market is, who the consumers are, and what they want; and Bela Szabo, Strategy and Innovations Planning Director at DDB advertising agency, to share how he builds brand communication strategies for top brands.
It is time wine businesses let go of old habits and start to think new ones because new is irresistible. It is extraordinary. It is exciting. It is surprising. It is thrilling and refreshing.
So why is branding such a big deal? Because according to a study called BrandZ™ Top 100 Most Valuable Global Brands 2015 Reports by Millward Brown, the top 100 most valuable brands in the world are worth $3.3 trillion. Just think about that number for a second: Not one wine brand is swimming in this pool of money, while a beer brand made it to the top 40 most valued brands. If we want the wine industry to be part of this big money party, it needs to wake up and acknowledge the importance of branding, because brand value drives business.
As Robert Joseph puts it, a brand is the most valuable piece of real estate in the world, a small part of someone’s brain. In contrast to this, I look at how the wine sector has been “branding” its products, and the only conclusion I have is that instead of investing in this piece of real estate in consumers’ brains, it has only built great walls between its brands and consumers. Coca Cola, Nike, Uber and Facebook are all examples of brands that have that valuable part of consumers’ brains. No wine brand has this powerful privilege yet.
Damien Wilson clearly points to one of the basic and most tangible problems of the industry: it has not adapted to changing times and changing markets. As consumers have matured, new consumers’ interests are not taken into consideration and the industry is just shutting its eyes when confronted with the evidence. Data clearly shows who is consuming what and where. It also clearly shows why wine businesses are struggling more than ever in maintaining their businesses as economically sustainable. While product qualities are far better now than before, the perceived product value failed to follow that trend. Increase in product quality also means higher production costs; however, that increase in costs is not reflected on the final price/bottle. It is simply not enough to make better wines and build a business on the hope that it will sell more. A concrete brand strategy could bridge this gap between wine quality and sales.
Another important point addressed by Wilson is the difference between how the wine industry and wine consumers communicate. They live on different planets, they communicate in different languages, and they seem to belong to different species. While the wine trade’s communication is mainly based on self-propaganda, the wine consumer is communicating how fun wine is. Said a different way — the wine sector is talking to itself, and consumers are freely sharing their wine moments and stories. Neither is listening to the other.
If wine businesses are not listening to consumers’ conversations, that lacking revenue will never come from increased value proposition. However, before increased value propositions, businesses need to get back to the basics and revise their brand strategies.
Bela Szabo, with whom I worked together on some Procter & Gamble brands before getting into the wine industry, shared how to build a strong purposeful brand strategy. Bela shared how communication agencies like DDB build brand value. A brand’s value starts with its purpose, with its “why,” as Simon Sinek’s model illustrates this in a very easy to understand format. A brand built on its “why” is about having a reason for being, which should not be making money. It is about improving the life of the consumer, it is about standing for values that ease or make life better. Key fundamental human values should be the basis for strong brand purpose development.
In an industry where most products, like wine, are similar and don’t have a main differentiating point from a consumer point of view, except for regionality or grape variety, a strong brand purpose differentiation can be the only way forward.
From a purely marketing point of view, also backed by Millward Brown’s BrandZ™ Report, a strong brand purpose fast-tracks brand equity growth, which is what influences a consumer to purchase a specific brand and even to pay more for it. This is a crucial point for the wine industry to understand. A strong purposeful brand is a prerequisite for value growth!
So how can you fix your lack of branding in the industry? I’ve listed a few pointers below, and you can check out my presentation with Robert, Damien and Bela for additional insight.
Being a brand is not simply about being known, it’s about creating brand loyalty. Successful brands offer confidence — both emotionally and functionally.
Talk like consumers in order to get their attention.
Distinguish your strategy through an actionable customer segment.
Identify your brand’s:
Purpose: What does the brand believe in? This is the “why,” or your brand’s motivation.
Process: Take specific actions to make the “why” behind your brand come to life.
Result: This is the result of the “why,” or what the brand does to execute the process.
Strive for perfection, in your products and your advertising. Make your brand relevant!
Relevance is what makes the difference in this branding game. Robert Joseph put it perfectly in his recent Meininger’s column, “why are we all here?” Why are we all in this business if not to make it grow and move forward? Branding — this unwanted alien — can be the solution to many problems in the wine industry.
The presentation of the DWCC session
Originally published at www.nomacorc.com on November 24, 2015.