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Stormy waters for Stormhoek

Lots of interest in the story about Stormhoek and Orbital going into administration that I posted recently, so I thought I would update it with a few more thoughts.

My first observation is that there has been a deafening silence from Hugh MacLeod on the subject of Orbital’s problems. You’d think that the uber-blogger and chief communicator might have something to say on the subject so I am guessing that either a) he is so thoroughly ****ed off that he dare not discuss it or b) – much more likely – that there is stuff happening behind the scenes and he is waiting for that to be made public. I certainly do hope it is the latter.

Secondly, Alastair brought up the issue of the 4P’s of Marketing (a subject I have covered before myself before) in the comments.

I do think that Stormhoek did manage to have a good Product, at an attractive Price and had managed to get reasonable distribution (Place) for the wine – and of course they were famous for the Promotion. Here was a brand NOT using Price as their main driver – hurrah!

The main reported reason for the failure of the business was a poor decision to upset a retailer by selling their wines cheaper to a competitor, resulting in them being delisted. Whether this is factually correct or not I do not know, but it reminds us that retailers have power over such young brands – and that without the P of Place/Distribution none of the other elements mattered enough, and the business suffered.

However, I would also suggest that there is another way they had suffered a little lately as Alastair’s story demonstrates (see comment number 5). The focus had moved too far towards packaging and the image. There were regular label changes, including for Valentine’s Day, special runs with new labels for facebook groups, awards dinners and Microsoft, etc. I’d suggest that all these distracted from the main business objectives and did not focus enough on getting fans to put their money where their browsers were and go out and buy the wine.

A small company cannot cope with lots of different labels and dispatching tiny lots of wines all over the place (for free!!). The key is focus, and in a competitive market like wine, to minimise costs. Instead, they started upsetting their fan base by fragmenting their product offering and making it harder to deliver on their promises.

The Wine Conversation needs to be as general and free-ranging as possible, and no brand could, or should, control it. Anyone can join in and so become interested in wine, whatever their angle is on the subject. However, as Josh pointed out, a winery or brand needs to sell wine in order to survive, and their conversation must ultimately lead people to the cash register.

I hope that Stormhoek 2.0 gets back to basics and uses its indubitable communication skills to get their product selling again.

More thoughts soon I’m sure when more news comes out.

[UPDATE: More news out now. See here. The Administrator is "optimistic" of reaching a deal next week.]

Wine and Photography – some thoughts

Andrew Barrow from Spittoon is, as I have said before, a great photographer of wine ‘occasions’, particularly setting them off against food matches. Check out his photos here. He also pointed me to a friend’s photos here.

He and I have had a brief conversation about this some time ago, and I thought I would share my issues with this subject here in case others have any suggestions.

If you ask someone for a “wine” photo, you will get:

- a bottle shot, with or without props
- a vineyard shot
- a glass of wine (funny angle not required); swirling or dripping extra
- a smiling couple/group at a table with glasses raised

However well executed these shots are (and some are better than others), they have been done before by someone else. What is happening in 2007 with wine that we want to communicate? Is there nothing different today than there was 2, 10, 20, 50 years ago? I think there is, and we need to think about the visual language of how we get this across.

Let me give a comparative example culled from about 45 seconds searching on

If wine were … snowboarding, then this is the photo we are using (This photo by Anh Quan). There is nothing wrong with it. It shows boards, the design alternatives and the set up is fine.

However, snowboaring enthusiasts might use this type of shot (Photo by T A K K):

Relevant, active, engaging, atmospheric, fun, modern, youthful, … good!

You might even go so far as saying that if you removed the board from the photo, there are still enough clues for the target market to say “Snowboard!” (or whatever a cool snowboarder actually says).

This is exactly what the perfume business and soft drinks markets already do. Perfumes are all about beautiful people being terribly attractive.

Soft drinks are the same. A can is boring, but Wayne Rooney draining a can after a tough game whilst condensation drips from the can or bottle is not. Of course we cannot, by law, do many of these same things for wine at least in the EU, but the concepts are there.

So, if snowboarding or perfumes were wine, what photos should we be taking to make it relevant, active … and all those other nice words up there?

Now, Chateau Petrogasm has attempted to move in this area, although not directly. Their concept is to link a photo (or an image more generally) with a tasting note. This is radical, and fun, but it is about the taste of the wine. I am still thinking a little more broadly about how photography might capture the essence of a wine brand.

Tom Wark at Fermentation also mentioned a similar issue recently, although relating to the graphics for the entire catalogue and not about a single wine or brand.

I believe that this area is ideal fodder for more creative bloggers who have a decent artistic streak and mastery of a camera.

Question: How would you ‘capture’ a wine brand WITHOUT showing a bottle, a glass, winery or vineyard? Has it been done? Any suggestions for specific brands (polite only please!)?

And then (you knew it was coming), how might we communicate the Wine Conversation and therefore the role of wine in our culture(s) in general using photography (bottles and glasses allowed this time)?

Cost of wine on the High Street

Once again Peter has challenged me, so here is my response on excess drinking and the cost of business. Thanks Peter!

I mentioned that I thought the Threshers “3 for 2″ campaign was a good thing, to which Peter asks:

“So you don’t agree with recent claims that such offers encourage binge drinking?”

In general terms no, I don’t agree that a “3 for 2″ encourages binge drinking. I am still of the opinion that all consumers (who can legally buy alcohol) should be treated as reasonable and responsible adults. I really don’t like this government’s campaign to control personal decision-making in all sorts of areas and not just alcohol.

Do you think that Majestic insisting on people buying a case of 12 is 4 times as bad as Thresher? Of course not. Binge drinking is an issue I’m sure, but restricting the sale of these products is not the answer.

So, assuming people can buy more than one bottle without drinking them all at once, why should we encourage this?

“The real problem with Threshers is that the single bottle price is so inflated. With Tesco, their instore prices are equivalent to the discounted Threshers price, and so an additional 30% is a deep discount.”

The issue is cost and convenience. Threshers operates out of small shops on high streets. They specialise in certain types of wines, those the consumer is familiar with and wants to buy fairly regularly. This means that they are not competing with independent wine specialists whose niche are small production, probably higher cost wines, but directly with the supermarkets who sell the same wines. Of course the supermarkets can afford to get prices very low because they have bulk buying power and other economies of scale.

So where does it leave Threshers? We cannot really expect them to be able to sell the exact same wine as Tesco for the same price can we? Why should they? We really ought to be prepared to pay a premium of some sort to be able to buy that single bottle of wine on our way home without having to negotiate all the aisles and checkouts of the supermarket.

They could have left it at that, and maybe survived, but the pressure would have been ongoing (arguably what is happening to Oddbins). So instead, they have a contract of sorts with their customers that goes something like this:

“If you are prepared to buy in slightly greater volume (thus increasing our cash flow and turnover of bottles), we will reduce our total price to you to be in line with those places you might otherwise shop”

That is obviously too complicated a message, but anyone can understand “3 for 2″ and it is therefore a good marketing concept. Do I begrudge them trying to survive? Not at all. You can still buy that single “emergency” bottle on the way to the party, or after a tough day or whatever. If you think that premium is too much, you can still go to the supermarket instead.

No-one criticises Majestic in the same way for a vaguely similar model, quite the opposite. In fact their prices are also more or less in line with other retailers but only because they demand that you buy in volume. They won’t even allow that single bottle purchase. Surely this is something we could praise Threshers for?

When Tesco, Sainsburys et al offer a further 25% or 30% discount, Threshers and other smaller retailers simply cannot compete and still make money. However, they have to find ways to stay in touch as they still need to trade. Where I have the problem, as I have raised elsewhere, is when they try to do so by ‘bamboozling’ customers by talking about percentage discounts instead. I would like to see them try and find a differentiator that was not price and discount driven instead (as discussed many moons ago here and here) – it seems a sensible suggestion for longer term differentiation.

I should state for the record that indirectly I am involved as a supplier to Threshers (as well as Tesco, Sainsburys, Majestic and many others), but that my views on this are quite definitely my own and presented in the spirit of improving wine knowledge and discussion rather than promoting or knocking any specific retailer or wine.

Varietal labelling – some clarifications (Varietals: 3)

Peter May, of the Pinotage Club and also the author of a site and book about wine labels that is definitely worth checking out, made some comments on my pet subject which I thought I ought to post here to clarify a few points.

You can read his comments on my posts on varietal labelling here. In response, I would say:

First of all, I have nothing against listing the varietal make up of a wine. Whether this should be 85% or 100% of the wine is open for debate but it isn’t the fact that it is listed, but rather that the wine packaging focuses too heavily on this one element to speak to the consumer.

Second, with regard to the “flaw in the argument”, I would have to disagree. It is EXACTLY because Stellenbosch, Napa and Margaret River cannot be linked to one style that I argue that the old world countries SHOULD do more to focus on regions. Although this is often regarded as negative, this could be a positive thing. A (protected) regional name is unique, uncopyable, defensible. However, it must be made to be meaningful through proper quality systems and common agreement otherwise it will be eroded.

If, as many believe and you seem to agree, the right (or even best?) varieties are planted in such regions, then there is no need to change the product itself, but maybe focus on the other elements, especially communication. They may not have done it well to date, but that is not in itself a reason not to do it.

I agree that my points were made with a very “old world” view of the world, and you rightly point out that the same argument does not necessarily transfer to New World regions. However, there are many regions of the world that are trying to replicate this model, so there is a future for it. Hunter Semillon? Barossa Shiraz? These regions do try and associate style with the regional name.

Let me make it clear that I am not advocating removing the varietal information from labels. I just think that marketers should be willing to consider relegating it a little further down the order of importance. The current mantra in the industry seems to be “varietal above all else” and I’m only trying to raise a possible counter argument.

I may, of course, be totally wrong.

Isn’t that the wonderful thing about blogs?


How is a consumer expected to care about Bio-dynamic or Organic wine?

According to a study, consumers are confused. I wonder why?! With regard to why they purchase:

Biodynamic is less important than Organic
Organic is less important than the vintage
Vintage is less important than the winemaker
Winemaker is less important than the region
Region is less important than the country
Country is less important than the Varietal
Varietal is less important than the price
and finally,
Price is less important than the “deal” or “offer”

How is the average wine buyer to even start to consider whether the wine is either organic (which they at least have heard of) or bio-dynamic (which they certainly haven’t)? They aren’t even quite sure if the varietal name they have heard before is red or white.

The problem with marketing in the wine trade to some extent is explained by the fact that the differences, if any, between any wines are all at the top of that list, and therefore far beyond the interest levels of the consumer.

Therefore we have the following options:

Give them a(nother) deal
Join the me-too brigade focused solely on the varietals
Spend millions in the hope to increase wine “education & understanding” amongst consumers
Give them another, very different, reason to buy YOUR wine

Stormhoek are doing this last one. Magners have done it in cider. Levis did it for jeans.

As Hugh says, “go after the magic”.

Unfortunately, in the commercial arena, bio-dynamics are still just hocus-pocus, not magic.

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