Wine Marketing in 2014
As the year is coming to an end I have been thinking of a few things. One of these things is obviously what my opinion is regarding the wine industry. I have been working in it for the past 12 years, reasonably enough time to understand where and why the sector as a whole is in great disadvantage compared to the FMCG world, my prior world.
Having worked for multinational companies in both Marketing and Advertising, I tend to have a different look at what goes on around the wine sector by simply looking, searching, and analyzing what goes on outside of it. I follow my old brands, the ones I worked on prior my wine business, and I look at brands I would have loved to work for, also prior to my wine business. One could say “lupus mutat pilum, non mentem”; the wolf changes its fur, but not its mind, and that is me in the wine sector.
Already back in the late 90's, when I started my FMCG journey, big brands were conducting lots of consumer research to understand and plan better their marketing activities. During those days, we, as consumers, were reached by brands through the traditional media channels with some good and some bad advertising. It was a one-way conversation between the brands and the consumers. We were all happy with it, we didn’t have a better alternative. That was marketing 1.0, with main objective to sell products and these had a simple functional value proposition. Communication was all about product demonstrations, ads were like “Buy my product because it has the best ingredients.”
Then the world evolved, and 10 years later big brands moved on to marketing 2.0. The game became more fun and more challenging. It was all about satisfying and retaining consumers. Marketing became consumer focused; the product wasn’t the center of attention anymore. This came along with the Information Revolution, the boom of opportunities that internet started to offer. Big brands started focusing on consumers’ emotions alongside functionality of their products. It was a one-to-one conversation, in which the main purpose was to differentiate the product in the consumers’ minds by giving them a clear purpose for consumption, like “buy my product because it will make you feel much better”. Another great example of communication during the marketing 2.0 era, is brands’ storytelling to emotionally engage with consumers.
The newest marketing trend emerging in this last year is the value-driven marketing. Corporate objectives are becoming “Let’s make this world a better place”. This is the age of marketing 3.0. Sharing and collaborating are principles that brands are embracing with the objective of selling values, not brands or products. Interaction with consumers is based on many-to-many collaboration. Words like engagement, disruption, and innovation will slowly be outdated; people want brand actions that will lead to behavior changes. People want brands to show them alternative ways of doing good for the society, pushing the notion of “good cause” in front of the brand itself. If anyone looks closer to the basic concept behind this trend, will understand that this is what Generation Y is about.
Where is the wine sector in this marketing timeline? Some are doing marketing 2.0, many are stuck in the last century and are having a one-way conversation with the consumers, and I can count in one hand wine brands that are experimenting with marketing 3.0.
We talk about innovation, and wonder why the wine sector fails to move on. The main issue is that the industry still fails to understand its consumers. There is a miscommunication that the industry itself has fueled and seems it has no intentions of changing.
The common denominator through the marketing timeline is always the consumer. In one hand, FMCG brands market to consumers, not to retailers, FMCG brands don’t ignore their consumers, they have conversations with them. Distribution of their products is just one aspect, and often not the most important one, of their marketing strategies. If there is consumer demand trade will follow. On the other hand, wine marketing activities, on a normal basis, don’t even consider the consumer. Businesses that do have some budget spend it on trade shows, trade promotions, trade communications, on sales.
As far as I see it, this is the biggest and most important difference between marketing done in the FMCG world and in the wine world. Nevertheless, is wine buying habits different from that of yogurt? From the consumers’ perspective, both are products they buy most likely at the same supermarket. They not only buy the two products in the same store, but they also most probably consume them in the same place, at home. Consumption occasions are different, but the consumer is the same. So why not look at how that yogurt company is marketing its product and learn from them?
The fact is, if any wine business started putting the consumer in the center of its business strategy, all kinds of new business opportunities would appear in the horizon. First and maybe, the most important thing businesses would gain is consumer insight, a deeper understanding of consumption habits, and reasons for consumption. From marketing point of view, the most important asset businesses have today is the understanding of their consumers.
Wine drinkers are tired of being approached as if we were still in the last century. They have the decision power in their hands, constantly online searching and finding answers. They don’t need brands telling them how awesome they are, how many medals they have won, the days of self-promotion are over. Consumers expect brands to make them experience new things, interact with them and deliver value that they appreciate.
To conclude, the way the wine industry sees itself, is very different from how consumers perceive it. They speak different languages and live in different planets. The sooner the industry embraces marketing done right, the sooner we will be better off. I believe the wine industry should stop walking 100 meters above the ground and lower itself to the level of its consumers. Deliver value they recognize, start talking in their language and only then can we bring important developments to the entire wine sector.