People frequently visit the wine store to pick up a bottle of wine for dinner, special occasions or to cellar. Immediately when consumers walk through those doors, they are bombarded with wine labels, shelf talkers and catchy signs. As consumers travel down the many rows of wine bottles, each bottle is labeled something different. Some of the labels are very simply done, while others are extravagant and eye-catching.
You first glance at the label and begin to think about the contents inside of the wine bottle and whether you want to purchase it. The language on the wine label will then solidify the sale to you. According to the book "Wine Wars" by Michael Veseth, “Wine is a mystery to most customers. They have little confidence in their ability to tell what’s in the bottle as they stare at the wine wall or puzzle over a restaurant wine list. Some of them are adventurous and treat it as a treasure hunt game, but far too many buy the same thing over and over again or, worse, walk away in frustration, buying nothing at all.” This is why having an established and trusted brand is so important for a wine company.
According to "Contemporary Advertising" by William Arens, “Brands offer instant recognition and identification. They also promise consistent, reliable standards of quality, taste, size or even psychological satisfaction, which adds value to the product for both the consumer and the manufacturer.”
In a survey conducted by TWICE/Campaigners, 44 percent of consumers ranked brand name as the most important factor when making a major purchase. Price ranked second. When consumers are traveling through the many rows of wine products, they rely on trusted brands to help them make their decision. According to the survey, if brands are successful, “Consumers instantly comprehend the brand’s promise and have confidence in its quality.” The goal is brand loyalty because it serves both the consumer and advertiser. For the consumer, it reduces shopping time. For the advertiser, it builds brand equity.
Wine companies that have been established for years rely on brand loyalty to help them stay in the wine market and to continue making wine profits. Arens states that high brand equity offers a host of blessings to the product marketer: customer loyalty, price inelasticity and long-term profits. Also, “A loyal customer can be nine times as profitable as a disloyal one.” Furthermore, the more confidence consumers have in a wine brand, the more likely wine consumption is to increase.
In order to fully understand what the American market was consuming, a company named Constellation Brands developed a study in 2005 and 2008 called Project Genome. The first phase was released in 2005, and “Hundreds of questions were administered to a panel of 3,500 U.S. wine consumers in the largest organized study of wine buyers at the time.” The Nielsen Company helped place wine consumers into categories to further understand their behavior in 2008. The company created a "mini USA consumer panel," according to their website, where participants filled out surveys and scanned barcodes of their purchases. Constellation Brands took this data and divided the market into six wine market segments: wine enthusiasts, image seekers, savvy sippers, traditionalists, satisfied sippers and overwhelmed.
The study concluded that the largest group of wine buyers are “overwhelmed” by the wine wall, with its hundreds of labels in dozens of categories at many price points. Even though the “overwhelmed” consumer is the largest group of wine buyers, that does not mean they generate the most profits. The majority of the wine profits are “wine enthusiasts,” which is not too much of a surprise.
Wine ratings are also an influential aspect of wine buying. Veseth explains that wine ratings are also useful in commercial settings because winemakers need to “find ways to reduce consumer uncertainty and therefore increase sales.” The most influential wine ratings come from wine experts like Robert Parker and Janet Robinson. Parker’s wine rating scale is based on a 100-point scale, whereas Robinson's is based off a 0- to 20-point scale. These scales give a summary of critics' evaluations of the wine.
Their wine ratings are widely used for numerous reasons, especially when purchasing and selling wine. Many consumers look for these ratings on a particular bottle to reaffirm with themselves that they are making a good decision. It is difficult picking out wine, which is why companies are now making shelf talkers.
Shelf talkers are another influential part of the wine buying experience. Veseth explains that the first kind of shelf talkers is “the simplest" and "sometimes the discount tag to attract savvy sippers.” The second kind of shelf talker is the “number tag that gives Robert Parker’s Wine Advocate, Wine Spectator or some other critic or publication a rating of a wine.”
Stores such as Costco have signed an exclusive agreement with Wine Enthusiast Magazine to use their wine ratings in Costco stores, according to Veseth. Wine Enthusiast uses shelf talkers to help them learn something interesting about a wine that most people cannot find out from a wine label. They live for a story to tell and want to know what the winemaker was thinking when they made a bottle of wine.
Understanding a wine label can be a difficult thing. However, next week I am taking a volunteer to Riverside Wine and Spirits to help them with buying wine. My next article will be about our experience with the wine buying process. Cheers!
Michelle Richards is a certified sommelier through the Court of Master Sommeliers. Along with hosting wine tastings for local organizations, she serves up wine goodness at St. John’s Restaurant. Your can contact her by email. The opinions expressed in this column belong solely to the author, not Nooga.com or its employees.
Updated @ 12:45 p.m. on 5/16/13 to correct a typographical error: "Savvy shoppers" should have said "savvy sippers."