War of the roses

Long dismissed as uncultured plonk, the biggest marketing battle in the wine trade is now between the leading rose brands.

War of the roses

As recently as a decade ago, few consumers would have been proud to be seen drinking a glass of rose. The wine was firmly out of fashion, evoking little more than faintly embarrassing tales of 70s dinner parties fuelled by the then-chic Mateus Rose. Over the past 10 years, however, the growth of rose sales has almost doubled in the UK. It now accounts for almost 12% of the total wine market, with a value of more than £617m, according to ACNielsen.

The reinvention of rose has been a major success for a notoriously slow-moving wine industry. Its revival culminated in the leading brands battling for attention this summer in a now-crowded market.

This category is the fastest-growing in the wine sector, and competition is fierce. The glut of branded marketing and experiential campaigns, as well as sponsorship activity by brands including Gallo and Blossom Hill, have raised its profile further.

Suzanne Buchmann, marketing manager at Gallo Family Vineyards, says that while wine brands tend to inspire less loyalty than brands in other FMCG categories, rose varieties are often the exception to this rule. 'The rose consumer is more loyal and looks for more ways to engage with the brand,' she says. To build on this, Gallo branched out with initiatives such as its recent promotion with Sky Sports presenter Georgie Thompson to tie into the World Cup, pop-up bars and a branded iPhone app.

Brand dominance

Elsewhere, Blossom Hill continues to back the Wimbledon Tennis Championships, while Echo Falls became sponsor of Channel 4's Come Dine With Me to capitalise on the growing popularity of at-home dining.

However, at a time when wine producers are being squeezed by both rivals and retail pressures alike, only the major brands have the budget to invest in such high-profile marketing.

One respected wine writer claims the big brands benefit from the ignorance of the average consumer. 'There is a fear factor at work,' she says. 'People turn to a brand they recognise for fear of getting it wrong.'

Nick Gillet, marketing director of independent wine and spirits merchants Coe Vintners, agrees that this is particularly notable in the off-trade, where consumers have more options than the on-trade, but with only limited information on which to base their decision. 'Being a branded wine does not make a statement about quality, as there are great and poor wines (both branded and unbranded),' he says. 'If someone has tried a branded wine before and liked it, the brand offers reassurance. There may be a better wine or one that would better meet their needs, but that choice may be a step too far.'

John Abbott, deputy editor of wine magazine Decanter, sounds another warning - that the growth of mass-market rose brands brings the risk of market homogenisation. 'The danger is that the wines become interchangeable and, with the sweet style that dominates, it becomes less about the intricate nature of the taste and more about the style,' he says.

The marketing conundrum for brands lies in the fact that historically, the industry has focused on cultivating an air of mystery and sense of heritage about its products; the shift to selling brands on the basis of process or taste alone is a difficult one.

Trevor Hardy, founder of creative agency The Assembly, which works with Gallo, points out that there is a significant perception gap when it comes to how wine producers and consumers feel about the same product.

'Consumers simply don't have the same reverence toward it,' he says. 'There is often a contradiction between the product, which is hugely exciting, and the marketing, which is often rather dry.'

Gallo's attempt to position its roses as the 'drink of the summer' this year is indicative of brands' efforts to shift away from the fusty image many consumers still have of wine by dropping the 'reverence' in favour of more innovative marketing strategies.

However, the growing popularity of rose itself presents a challenge for a category in which 'discovery' can be a key selling point, particularly to upmarket consumers. This is typified by the post-Bridget Jones 'ABC' (anything but Chardonnay) backlash, when the wine, which was heavily featured in the film, became a source of ridicule.

Hardy admits that some snobbery persists, but insists that this is not true of the mass-market wine consumer. 'For the vast majority, the brand is the defining factor; it's more about the experience of the product than taste alone,' he says.

The 'ABC' issue reflects the fact that when too many brands pour into a category, margins are squeezed and price promotions ensue, which can lead to the market becoming undervalued. However, in a recent Decanter poll of the wine trade, 80% of respondents said they believed that roses should be taken seriously.

Does this mean, then, that smaller, specialist producers can also profit from the resurgence in rose? Paul Hillier, European marketing controller for the South Africa and Americas portfolio at Constellation Europe, which owns Echo Falls, says that big brands offer consumers trust, which is key for growth. However, this does not mean that consumers will stick solely with the brands they know in the longer term. 'As consumers become more experienced and knowledgeable about wine they may move on from the sweeter options to more complex styles and grape varieties,' adds Hillier.

Nevertheless, the supermarkets will play a big role, having become a core battleground for wine brands. The major chains have responded to the category's growth by giving a greater proportion of their shelf space to rose wines, but much of this is dedicated to the variants now offered by the big wine brands, such as Blossom Hill, Gallo and Echo Falls, which have steadily grown over the past 12 months. Thus, category growth does not necessarily equate to greater choice for consumers.

Moreover, sales will migrate to the off-trade over the next five years, according to Mintel; from next year it will replace the on-trade as the major source of revenue.

Promotion pitfalls

Supermarkets' loss-leader price promotions present a major challenge for manufacturers across the board. Once duty, the cost of materials and shipping are factored in, many consumers spend only pennies on the actual wine.

Gillet warns that the off-trade has become too reliant on price promotions as a driver of footfall. 'The downside is (that) brands can be compared across retailers and most of these promotions can only be afforded by the bigger brands, further restricting consumer choice,' he says.

Buchmann agrees that price promotions present a challenge, but says Gallo is not willing to sacrifice its long-term brand equity for a quick sales boost. 'We pulled back from these price promotions because they aren't sustainable,' she adds. 'Consumers expect them, but we are (now) in a better position for the future.'

This pressure means that smaller brands have only token budgets with which to reach consumers; many focus their strategy on PR. Meanwhile, the growth of online outlets such as Naked Wines, which bypasses marketing to connect consumers directly with winemakers, adds a further headache for brand marketers.

The resurgence of rose has undoubtedly given the wine trade a boost, and brands have been particularly successful in engaging female drinkers. The breadth of marketing now in play suggests that summer 2010 may prove to be a turning point for the trade - particularly if such tactical innovations can add a similar spark to the red and white wine categories.