Tag Archives: wine marketing

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Redd’s Wicked Apple: “Let’s make fun of wine”

Redd's Wicked AppleFar be it for the Wine Curmudgeon to criticize a multi-national company and a marketing campaign devised by people who are brilliant enough to work for it, when I’m just a guy at a keyboard who writes about cheap wine. But a recent Redd’s Wicked Apple commercial reminded me how creatively bankrupt so much of post-modern media is: “Let’s sell our product by making fun of wine!”

Original, isn’t it? And the commercial, like most wine humor, isn’t funny. It also borders on homophobic, implying that wine drinkers are somehow not complete men, and it uses African-Americans as a foil to show how cool Redd’s Wicked is. This approach, if I’m not mistaken, went out with “Super Fly” and the original “Shaft.” Unless, of course, you’re selling malt liquor to black people, which is what Redd’s Wicked is doing.

Not surprisingly, Redd’s is a product of Big Beer, desperate to find a way to stay relevant in the 21st century as its audience goes elsewhere. It’s hard to believe that the company that gave us the classic “Tastes great, less filling” commercials is reduced to this.

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Carmen Castorina: When a legend retires

carmen castorinaThe first rule of sportswriting used to be “Don’t god up the ballplayers.” Which meant that athletes were not necessarily better or worse people because they were ballplayers; they were just different, and you needed to keep that in mind when you wrote about them.

That approach has served me well over the past three decades, because it made sense for everything I’ve written about: politics, business, film, music, food (especially food), and wine. Perspective is all, and just because someone is a fine winemaker doesn’t mean they’re a good parent or friend or colleague.

So how do I write a piece honoring perhaps the best wine PR person in history without godding him up? Carmen Castorina, who retired earlier this month after some three decades at E&J Gallo, was adored by his colleagues (three farewell lunches); admired by his competitors (“Whenever I see Carmen I smile and feel good”); and apparently returned every phone call he ever got. Would that some of the ballplayers I dealt with were half that talented.

Which is not to say that Carmen and I never had a disagreement. Writers and PR people are born to trouble as the sparks fly upward. But what made Carmen the best, and why he was so respected, was that he never let those disagreements get in the way of doing his job. No grudges or snide remarks, and certainly not any of the punishments so popular today — being excluded from events or not told about news because the writer wasn’t “part of the team.”

Carmen always had a story, whether it was the time we were having lunch in Troy Aikman’s booth at a Dallas restaurant and Aikman, the former Cowboys quarterback, showed up and had to sit elsewhere. Or working with Ernest Gallo — yes, that Ernest Gallo — to market the winery’s first varietal wins and to help to take the California wine business into the 20th century. Or, as Carmen told our mutual pal Alfonso Cevola, how he set up umbrellas on the Jersey Shore in summer when he was a kid and that “Al Martino [of “Godfather” fame] always gave me a 50-cent tip. ?

I’ve dealt with PR people since the late 1970s, and almost no one did it better. So Carmen will be missed. I’ll even miss his little digs about my failure to include Gallo’s Barefoot in the $10 Hall of Fame and his insistence that Notre Dame was as good a school as my alma mater, Northwestern. And we’ll still have lunch now and again; I just hope Aikman doesn’t want his booth. Cause he ain’t getting it.

Slider image courtesy of Afonso Cevola and on The Wine Trail in Italy, using a Creative Commons license

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How to manipulate on-line reviews with a clear conscience — get a federal court ruling

manipulate on-line reviews yelpAlways wondered how legitimate the scores and reviews were on sites like Yelp, Angie’s List, and the Wine Spectator? Now, thanks to a federal appeals court ruling, you don’t have to wonder: Legitimacy may not matter. The sites may be able to manipulate the ratings, and they don’t necessarily have to tell you what they’ve done.

Or, as Lou Bright, the blog’s unofficial attorney, says: ?This does have the ethical aroma of dead rat, doesn ?t it? Yet neither Yelp nor the Wine Spectator are legally bound to be morally upright. The First Amendment allows for an awful lot of disreputable speech. ?

The court decision, made earlier this month in San Francisco, didn’t break new legal ground when it found that the possible ?engineering ? of review postings on Yelp, based on whether businesses bought an ad on the site, were legal. The ruling came after several businesses sued Yelp, claiming the site moved unfavorable reviews higher and moved favorable reviews lower on the site ? or removed favorable reviews altogether ? if the businesses didn’t buy ads.

Said the ruling: ?It is not unlawful for Yelp to post and sequence the reviews. As Yelp has the right to charge for legitimate advertising services, the threat of economic harm that Yelp leveraged is, at most, hard bargaining. ?

A legal thing here, so I don’t get sued. Yelp’s senior director of litigation said the company didn’t make review decisions based on whether anyone bought ads, and there is a disclaimer on the Yelp site. And I’m not saying Yelp does that. Or that Angie’s List, the Spectator or anyone else does it. Or that it goes on at all anywhere.

Rather, as W. Blake Gray wrote when he broke the story last week, the ruling reaffirms that sites or magazines that do reviews can charge for upgraded placement, higher scores, or better reviews with a clear conscience. After all, it’s just hard bargaining.

I talked to three other attorneys for this post, and each said the same thing as Bright: It’s not a consumer-friendly practice,and there may be risk in the long run, but it’s not necessarily illegal. As long as the site or magazine doesn’t commit libel (which is often difficult to prove, says Dallas attorney Trey Crawford), and doesn’t run afoul of the Federal Trade Commission, it’s on safe legal ground. Some court decisions have even gone as far as to equate engineering with “editorial discretion.”

What can you do to make sure ratings and reviews aren’t engineered? Look for a disclaimer on the site, like the one I use, and will continue to use. No one pays me for favorable reviews or to review their product, and it will always be that way. Because, if there isn’t a disclaimer, anything is possible.

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Winebits 350: Three-tier, wine prices, wine marketing

three-tier system ? No love for three-tier: The Wine Curmudgeon has much respect for the Wine Folly website, which does great work educating wine drinkers. Its recent post on the dreaded three-tier system was no exception, detailing what it was and how it worked with quality graphics and clear writing. I don’t know that it gave enough credit to Prohibition in three-tier’s formation, but it did discuss its beginnings in the late 19th century, which I didn’t know. And it did impressive work tying the cost of wine to the inefficiencies of the system. My only complaint: That it forecast the coming demise of three-tier, based on direct shipping, the Internet, and flash sites. It’s not that I don’t want three-tier to go away, but it overlooks three things — three-tier’s constitutional protections, which the Wine Curmudgeon has lamented many times, the system’s immense clout through campaign cash, and that direct to consumer sales account for less than five percent of wine sales in the U.S. That’s hardly eroding the system.

? “A giant sinkhole”: W. Blake Gray writes about the media’s immense joy in forecasting rising wine prices, which seems to happen every six months or so whether it’s true or not. The most recent example came after the Napa earthquake, even though the region produces just a tiny fraction of the world’s wine. Gray writes: “People just don’t have a sense of how enormous and international the wine business is — that if Napa Valley or Mendoza, Argentina or Barossa Valley, Australia fell into a giant sinkhole tomorrow, we would all be the poorer for it, but overall world wine prices would still not be much affected.” He also notes that many media types figure only rich people drink wine, and so deserve higher prices. I’m not so sure about the second; many of the media types who still get paychecks in this post-print world aren’t exactly paupers. My hunch is that it’s mostly crummy reporting. When a Washington Post writer proclaims that wine prices are skyrocketing when they’re not, and the Post is supposed to be one of the world’s best newspapers, it’s no surprise that everyone else misses the point, too.

? It’s not about the marketing: Producers in the French wine region of Bordeaux are running around in a panic because sales are down, and this report discusses how it will try to solve the problem through better marketing — some ?3m worth (about US$3.8). The Wine Curmudgeon, out of his great respect and admiration for Bordeaux wine, has a cheaper and simpler solution: Stop overcharging for your wine. It’s one thing to sell the best wines for hundreds and thousands of dollars a bottle, but when the everyday stuff costs $15 or $20 — and isn’t any better than $10 wine from California, Spain, or Italy — you’re not going to sell it, no matter how much you spend on marketing. One retailer, when I asked him why this was happening, attributed it to Bordelais greed. “If they can get it from the Chinese, they figure they can get it from the rest of us,” he said. Obviously, that isn’t the case any more.

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Treasury Wine Estate’s plan to avoid a hostile takeover

Treasury hostile takeoverThe Wine Curmudgeon mentions Treasury’s scheme for two reasons. First, and most importantly, it doesn’t seem very sustainable. The troubled Australian multi-national wine company, whose holdings include California’s Beringer, has been losing more millions than most of us have socks.

Yet, despite its problems, Treasury wants to boost business to fend off a hostile takeover from private equity firm Kohlberg Kravis Roberts, which tried to buy Treasury earlier this year and made another offer this week. The second offer was a little higher, but probably won’t scare anyone.

Treasury’s anti-takeover plan features selling heavily discounted wine refrigerators to customers in Australia. The Brisbane Times newspaper reports that the company’s new boss “labelled the wine cabinet promotion the biggest consumer-facing promotion ever undertaken by the company.” Which should tell us all we need to know about Treasury’s lack of marketing ability.

How does it work? Buy six bottles of a Penfolds Bin wine, which cost from AU$30 to AU$80 a bottle, and you can buy a AU$650 wine fridge for AU$200. In other words, buy six bottles of AU$30 Penfolds Bin 51 Eden Valley riesling and the refrigerator and pay AU$380 — just 58 percent of what the refrigerator would cost by itself. Given retail discounting, in fact, you could probably get the fridge for at least 50 percent off. Is it any wonder that Treasury wrote down AU$260 million earlier this year and fired its CEO?

The second reason I mention this? The Wine Curmudgeon, financial genius that he is, bought 100 shares of Treasury stock in hopes KKR (as we high-flying investment types call Kohlberg Kravis Roberts) would make another, much higher offer for Treasury. My retirement to Burgundy never seemed so close.

I paid about what KKR offered the first time, so news that Treasury seems to be throwing away money on the refrigerator promotion is not welcome. The company is reducing inventory and margins to increase cash flow, which will not boost its value or make me rich. KKR’s second, not much higher, offer confirmed this.

In the wine business, the old joke always seems to apply. Or, as one actual real-life financial type told me: “With a little luck, you might get a nice bottle of wine out of this.”

winetrends

Why wineries change their label design

wine label designMostly, because they can. That’s one of the conclusions of an article I wrote for the Beverage Media trade magazine, trying to figure out why so many producers seem to be changing the look and design of their labels. Because, given the changes in the wine business, with more and bigger companies controlling more brands, it’s going to happen more often.

Or, as one retailer told me: “Sometimes I wonder why they need to fix something that isn ?t broken.”

And, though the article was written for retailers, it has lessons for consumers as well. Ever go into a store, look for your favorite wine in its regular place with its regular label, and not see it? Chances are it’s still there; it just has a different label. Don’t laugh. Retailers told me this happens all the time.

So what’s going on with all the re-labeling?

? It’s difficult to get a firm grasp on how often this happens. Brands that have changed labels over the past several years include Blackstone, Columbia Crest, La Vieille Ferme, Jacobs Creek, Columbia Winery, Cuvaison, Hahn, Parducci, and Langhe Twins.

? Producers, facing a need to make their product stand out among what may be 15,000 different wines in the U.S., are more willing to change the label than ever before. In addition, they know more about this kind of marketing, and will spend the money to do it where they may have been reluctant before.

? Consumers aren’t always the primary target for label changes. Producers sometimes do it to impress distributors and retailers, to reassure them that they care about the brand and will put marketing dollars behind it. This is completely different from every other consumer packaged good, and we have the three-tier system to thank for it.

? Most label changes aren’t complete makeovers, although that seems to be happening more often. Usually, the changes are tweaks to reinforce the brand’s image, and are only noticeable over time.

? Once-popular wines that aren’t anymore are the most likely to get a new label. Also, producers aren’t shy about changing labels on popular brands, if they see a chance to keep the current audience, which may be older, and attract a new, younger one.

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Another study agrees: We buy wine on price

wine genome studyThe biggest surprise in the Wine Genome study from Constellation Brands, one of the biggest wine companies in the world? That one-fifth of us buy wine on price.

“We knew they were out there, but the widening span of the study showed how deeply the recession cut,” said Dale Stratton, the Constellation official who oversaw this version, the third, of the company’s Project Genome, designed to identify the most common types of of wine drinkers based on purchase behavior, motivation, and preferences. “The recession had a big impact and significantly changed consumer spending habits.”

Stratton laughed when I asked him about this. No, he said, it’s not that Constellation (whose brands include Rex Goliath, Mark West, and Robert Mondavi) didn’t expect price to be important. Rather, it’s that price-driven wine drinkers were the biggest category of the six, doubling the number of Enthusiasts — those who “love everything about the wine experience,” including researching purchases, reading reviews, and sharing wine with others. In other words, the Winestream Media’s audience. The other thing to note here? The Enthusiasts account for 15 percent of profit, compared to 14 percent for the Price-Driven group. Harrumph.

The study, which updated a 2004 effort, is full of surprises — unless, of course, you visit here regularly (and you can see a nifty infographic describing each group here):

? The third-biggest group, at 19 percent, are Overwhelmed, which means pretty much what it says: “I don’t enjoy shopping for wine, and find it complex and overwhelming. This, says Stratton, reinforces the need for wine education, not only for consumers but for those who sell wine — distributors, retailers, and restaurateurs. Hearing this was surprising enough, but I almost dropped the phone when Stratton said that winespeak is one of the reasons the overwhelmed are overwhelmed. Maybe, he said, retailers and wine writers should find simpler terms to use.

? Women, who have traditionally skewed higher for wine purchases at the lower end, are becoming more important at the higher end. The Enthusiasts, who were about 65 percent male in 2004, were close to 50-50 this time. “This means more women see wine as a hobby,” says Stratton, and that means more women attend tastings and shop at wine-specific retailers.

? Wine snobs, called Image Seekers, are still with us, and in a big way. They account for 18 percent of wine drinkers, but contribute 26 percent of profits, more than any other group. Given the wine they drink, that’s probably not surprising.

? Welcome the Millennials to wine, in the form of the Engaged Newcomer at 12 percent. This group is young, wants to learn more, and recognizes that wine is intimidating. They also spend more on a bottle than the other groups, about $13.

One other point worth noting: This kind of study is common for consumer packaged goods like laundry detergent and ketchup. That Constellation can do for wine what Proctor & Gamble does for its products speaks volumes about how much the wine business has changed, and that it is becoming more mainstream.

“Wine is increasing household penetration at a good clip, and the audience has broadened,” said Stratton. “And it’s going to continue to change, as the American population changes.”