2019 Wine Economist Top Ten

251626This is the time of the year to look back on 2019 and ahead to 2020. Here at Wine Economist world headquarters our contribution to the first part of this exercise involves probing the data provided by WordPress, our internet host, and seeing which weekly columns got the most attention. It’s one way to gauge what’s on readers’ minds.

The most-viewed column by far this year was Outlaw Wine? 19 Crimes Succeeds by Breaking All the Wine Marketing Rules, which first appeared in 2018.  19 Crimes is a phenomenon and, as I wrote in the column, it breaks convention in many ways and perhaps because of that it appeals to a wine market demographic that is otherwise hard to reach. Are there lessons to be learned from the 19 Crimes success story? Obviously a lot of people want to find out.

The Top Ten list is drawn from columns first published in 2019. Here they are from #1 to #10.  Take a look at the titles. Do you think they have anything in common (my answer follows)?

 

1.   Six Things to Do With Surplus Cabernet Sauvignon Grapes

2.  Global Rosé Market Q&A.

3.  Two Cheers for Canned Wine

4.  Anatomy of the Rising Import Threat to U.S. Wine

5.  Global Wine Market: Storm Clouds Gathering?

6.  The Beginning of the End of the Old World Appellation System?

7.  Is Sustainable Winegrowing Sustainable?

8. Which Wine? Navigating the Retail Wine Wall’s Fluid Map

9.  What’s Really in your Glass? Transparency, Accountability & Wine

10.  Global Wine’s Lost Decade

Interesting list, don’t you think? Several of the columns establish a problem — slack demand for wine in many markets and emerging over-supply, especially of Cabernet Sauvignon here in the U.S. What to do?

Most of the rest of the columns look for answers. There are some growing segments and categories even in a stagnant overall market. What’s hot? Who’s buying? What? Why? The columns on Rosé and wine in cans got extra attention because those were two growing markets in 2019.

I wonder what will be hot in 2020?

The Wine Economist will take a break for a couple of weeks and return in the new year with more analysis of global wine market trends. Sue and I wish all our readers health and happiness. See you in 2020!

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giftsSince this column is filed under “Shameless Self-Promotion” I would be remiss if I didn’t remind readers that wine books make great gifts: Wine Wars, Extreme Wine, Money, Taste, and Wine: It’s Complicated, and Around the World in Eighty Wines.

Note: Many Wine Economist columns are republished in Italian by Civilta del Bere, a leading Italian journal of wine and culture. Grazie mille!

Air Provence: Provence Rosé Takes Flight

airp2The list of regions around the world that make good Rosé wine is very long because Rosé is a style of wine, not a wine grape variety. But the word-association game answer is easy: Rosé? Provence.

And although my friends in California and the Languedoc and other places that have nice Rosé  hate it when I say this, if you are talking Rosé here in the United States the conversation begins with Provence.

#1 Export Market: USA

The wine producers in Provence are understandably happy with this situation because they have come to depend on the U.S. market to drink up their Rosé wine exports. According to data provided by the Conseil Interprofessionnel des Vins de Provence (CIVP), the U.S. was Provence’s #1 export market in 2018, happily emptying 26.3 million bottles of Provençal wine, 98% of which was Rosé.

Rosé is one of the hot segments of the U.S. wine market and the Rosé from Provence is very strong. But it would be a mistake for the Provençal producers to become complacent about their signature wine’s position in its most important export market.

This is especially true given that the overall U.S. wine market seems to be reaching a plateau and that the current trade war environment is not friendly to Rosé wines from France that have less that 14% abv and so are subject to the recently implemented 25% tariff. And then there is the threat of more tariffs in 2020.  Yikes!

Now Boarding: Air Provence

So the Provençial producers have organized an ambitious trade event called Air Provence that is scheduled for April 6 – 7, 2020 to keep their wines on U.S. radars and deepen market penetration.  Incredibly, given their success in the U.S. market, they have even more to share. The program offers wine trade members an intense immersion in the region and its wines, with 200 producers and more than a thousand wines on offer in addition to dinners, masterclasses, and so on. The event website summarizes the program like this:

The very first edition of AIR PROVENCE, organized by the Provence Wine Council for Côtes de Provence estates, invites you to take off on a unique immersive journey at the heart of the leading rosé wines appellation. For two days, experience a business class trip to meet producers and wine merchants, discover terroirs and landscapes, and taste wines as well as Provence art de vivre.

I’m interested in Air Provence in the context of the recent discussions about generic wine promotion in the U.S. We often focus on consumer-facing strategies (the “Got Milk?” approach), but there are many places in the product chain where leverage can be applied, either as a substitute for or complement to other tactics. The Provence producers are working to get the attention of trade actors (importers, buyers, etc.) who can become active  partners in selling their wines.

Provence Rosé wines are hot, but the trade wars are creating turbulence and headwinds for the wine market generally and for French wines in particular. Provence Rosé producers are smart to be proactive, using programs like Air Provence to build on their successful market foundation at this moment of uncertainty. I wish them good fortune, but as Bette Davis said  in All About Eve, better fasten your seat belts!

What Can We Learn from the Wine in Moderation Movement?

paul-giamatti-drinking-a-001Some say that it is time for the wine industry to take the initiative to change perceptions through a generic promotion program.  The “Got Milk?” campaign made people think about milk a bit differently. Maybe a similar initiative could shift the needle on wine?

One concern, as I wrote last week, is that as memorable as “Got Milk?” was, it didn’t prevent milk’s ultimate marketplace decline. Maybe “Got Wine?” isn’t the answer. But what would a better approach look like?

Wine in Moderation

I think there are lessons to be learned by studying the Wine in Moderation movement  that began in Europe a decade ago and has now spread to many corners of the wine world.

new_branding_slideshowWine in Moderation was founded in 2008 at a time when the European wine industry faced a growing threat. It wasn’t just that wine demand was falling — that had been going on for a couple of decades. And it wasn’t just the global financial crisis, either, although that didn’t help. It was rising anti-alcohol sentiments and policies that threatened wine both as an economic activity and also as an integral part of European culture.

I asked George Sandeman, President of the Wine in Moderation Association, to explain WiM’s objectives and the lessons they have learned.

Although a message of “moderation” seemed to be well aligned with the way wines are presented on a day to day basis, focusing quality rather than quantity, we encountered difficulty in waking up the wine sector to the cold wind blowing from Geneva.

Initially there was no recognition of the social responsibility attributed to the “wine sector” (“leave it to beer and spirits!”). At best it was a reluctance to accept the fact that wine needed to be part of the social responsibility which the category required, and at worst we were sleepwalking into the same treatment as tobacco.

The traditional culture of wine was frequently overridden by need to compete in new market environments … Add to this a powerful health lobby working to demonize wine …

So the first two lessons are that the wine industry needs to wake up to sector-wide issues. And the positive story of wine doesn’t tell itself. Someone has to do it.

What wine needed, the group’s founders proposed, was an organization that would help its members tell the counter-story of wine’s benefits when consumed in moderation, and would lean against the wind of damaging anti-alcohol regulations. This was no easy task, Sandeman notes. “The concept of ‘moderation’ is not a simple concept to communicate, varies with different cultures and viewpoints, and is difficult to translate for non-English speaking countries …”

Strength in Numbers 

Wine in Moderation has evolved in the 10+ years since it was founded (you can read about its progress here). As its efforts have gained traction, it has moved from a tight European policy focus to an approach that is broader in both geography and strategy. The map of Wine in Moderation activities is now global and its focus is shifting to education of professionals. Although there are Wine in Moderation activities in the U.S. I suspect that the impact is somewhat limited by the lack of a national coordinating organization,  a role played, for example, by Vinos de Chile, Unioni Italiani Vini, ACIBEV, and FEV in Chile, Italy, Portugal, and Spain respectively.

Seventeen national organization plus several global wine companies (Pernod Ricard, Möet Hennesy, Sogrape), and a host of other groups including WSET and the Institute of the Masters of Wine now support and implement Wine in Moderation programs around the world.

So the third lesson is that there is strength in numbers. It is important to work together on several levels to address important issues.

I first learned about Wine in Moderation from George Sandeman and Susana Garcia Dolla when I was speaking at ACIBEV meetings in Porto a few years ago. Since then I have noted the group’s participation at national and international meetings, always presenting a message of wine in a cultural context.

Wine in Moderation announced a major rebranding in November 2019 with the theme of Choose – Share – Care, which the leaders hope will carry the organization forward into even more ambitious professional and consumer programs in its next decade.

  • CHOOSE to make informed choices; choose the best wine for you to enjoy, choose whether or not to drink.
  • SHARE wine with friends & family, pair with good food and water. Drink slowly and take the time to fully appreciate.
  • CARE about the wine you serve, care about yourself and about others. Avoid excess and enjoy your wine in moderation!

Increased focus on wine tourism is another element of future work. Wine in Moderation’s association with the United Nations World Tourism Organization is one step along the path to providing wineries and regional groups with more tools to shape perceptions and develop the wine tourism experience.

Strike the Right Chord

Two things about Wine in Moderation are especially relevant to the current U.S. concerns. First, while I will admit that Choose-Share-Care does not have that “Got Milk?” punch, the message is one that I think might strike a chord with some of the groups that wine is currently failing to engage.  Health, community, and culture is a strong positive message and one that resonates with young the old alike.

And the way of getting the message out is relevant too. One thing that impresses me about Wine in Moderation (another lesson?) is its multi-layer approach. Here’s how it works:

  • The international coordination is provided by a not-for-profit international association, the WiM Association.
  • In each country, there are one or more WiM national coordinators that support the planning, coordination, implementation and accountability of the programme in their respective countries.
  • WiM supporters join the programme at national level. They actively support a wine culture that inspires well-being and healthy lifestyles and contributes in the prevention and reduction of alcohol related harm.
  • Leading wine companies further support the efforts made at international and national level setting the example with their leadership in social responsibility and high contributions. These leading companies are the Wine in Moderation Ambassadors.

Wine in Moderation movement members are given the tools they need to spread the word, which is a model that could work here in the U.S. Leadership is needed, of course, but it seems to me that our many regional wine associations and wine companies, too, would benefit from bringing a coordinated message into their diverse communications programs.

I can imagine a program with a general message agreed at a high level, but implemented with creative local twists and turns by the dozens of regional wine associations around the U.S. Such a plan would share the creative energy (and cost) while leveraging wine’s broad and diverse base.

Work together? Is that realistic? Well, what’s the alternative? In Europe, as George Sandeman said, the alternative was being regulated like tobacco. The alternative here in the U.S might be a  gradual (and then sudden) wine market bust.

This Changes Everything?

Everyone would like to find a silver bullet that would change everything for wine — in a positive way. But silver bullets are hard to come by and they show up in unexpected places. Do you remember the impact of the 60 Minutes “French Paradox” broadcast? Or the Sideways boost for Pinot Noir? (BTW Miles’ “dump bucket” scene from Sideways is definitely not an example of moderate wine consumption!)

Wine in Moderation has moved the needle in its target regions according to its most recent report. Worth further study, don’t think?

Got Wine? Is It Time for a Generic Wine Promotion Campaign?

 

I’ve had several conversations recently that circled back to the idea that the wine industry should invest in a generic promotion campaign. You know what I mean. Not “Got Milk?” (maybe the most celebrated generic promotion of all time), but something along the lines of “Got Wine?” or “Got California Wine?” depending on who’s talking.

“Got Wine?” is too copy-cat to work, of course. You can come up with something better if you give it some thought. But you get the idea.

Subsidy Wars?

One argument for generic promotion of wine is based on the realization that wine isn’t connecting with new, younger consumers the way we hoped or expected. If we want consumers to have a particular image of wine (or of the wine-drinker identity), maybe we should be more proactive in shaping perceptions.  Laissez-faire isn’t working so well. Let’s do something.

A second argument, which would support “Got California Wine?” or “Got American Wine?” is provoked by the  subsidies the European Union is giving to its member states to promote their wines in the U.S. market.

Years ago the EU used to support prices and winegrower incomes directly, but buying up surplus grapes and wine (we called the result the European Wine Lake). Now the EU has changed tactics and supports the modernization of wine production and the promotion of exports. Basically, they want the wines to be marketable and if the EU market won’t buy it all (and it won’t), then exports are promoted to avoid re-filling the dreaded lake.

This is a better approach from an economic standpoint, but you cannot blame American producers for thinking that it creates an uneven playing field. It might be better, many argue, to get the EU to stop subsidizing wine export promotion. But that would be complicated and take time. In the short run, the argument goes, generic promotion of U.S. wines might even things up a little.

Milk is All Over

Talking about wine promotion got me thinking about milk. That “Got Milk?” promotion ran for 25 years and attracted lots of attention. All sorts of celebrities posed with milk mustaches (aka moo-staches) to draw attention to milk and its broad appeal.  Everyone enjoys milk — that was the message. The Whoopi Goldberg ad was my favorite.

But, memorable as these advertisements are, they were fighting a losing battle. Increasingly, American consumers don’t follow the “Got Milk?” path.

milkI first realized this a few years ago when I heard wine economics guru Karl Storchmann talk about trends in various consumer beverages. He examined Google data about searches for wine, tea, coffee, milk, and water and concluded that  while water was rocking it, milk was fading fast. “Milk is all over,” Karl said at the time (here is a pdf of his study).

Karl wasn’t wrong. Dean Foods, America’s largest milk producer, filed for bankruptcy in November 2019.  Milk sales fell for 4 years in a row as Americans shifted to plant-based cow-milk alternatives, including oat milk and especially almond milk.

Wine vs Milk?

Got Milk? Yes. Always. But increasingly it doesn’t come from a cow.

When you think about it, what happened to milk is a little bit like what seems to be happening to wine. There are lots of new products available that compete with wine including craft beer, craft spirits, and alcoholic sparkling water.  Some of these products are popular in part because they have less alcohol than wine, addressing a health concern  in the same way that almond milk avoids a health problem for some dairy-intolerant consumers.

Is wine all over? I don’t think so. But the industry is obviously not as healthy as we’d like it to be.

So what should wine do? A generic campaign is fine, but it matters a lot who it is aimed at, what it says, and how it is organized. And someone has to pay for it. A “Got Wine?” style consumer-focused campaign isn’t the only option.

Sue and I recently attended a promotional event for Italian wine that was aimed at trade — importers, distributors, sommeliers, journalists, and various “influencers” — but not consumers themselves (there was no consumer tasting).  The product chain for wine is long and complex and there are several points where promotion can be effective.

Come back next week for thoughts on some of the issues that a “Got Wine?” push needs to take into account. In the meantime, I have discovered that there already is a GOT Wine — GOT stands for Game of Thrones!

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The chart comparing Google search term data for wine, milk, etc. is taken from Karl Storchmann, “Wine Economics.” Journal of Wine Economics 7:1 (2012), p. 3.

The video above is the very first “Got Milk?” commercial.