After last weeks presentations, I was intrigued by the various strategies region's use to market their wine and region. Specifically around how some regions are looking to 'venture out' of the varietals they are best known for (Sauvignon Blanc, New Zealand) and how other regions stick to one varietal and try to win in that category (Icewine, Canada).
Based on marketing principles alone, and given this is in part, a marketing driven business (fragmented players, high supply, all aiming to differentiate) I am wondering why regions like New Zealand are opting to try to win/produce in other categories? For me it seems like staking out your territory (i.e. creating a brand for your region), and winning in that territory, would make the best business sense.
One reason might be to offer a variety of tastings to tourists (who wants to only sample one varietal/blend?), but I'm struggling to think of other dimensions where this makes sense (from a 10,000 foot level). Interested to hear others opinions on this.
What would drive regions to compete in categories they are not known for?
Gabrielle, I can think of two potential reasons. One reason could be reaching the domestic market to the extent that it is attractive. For tax and shipping reasons, I'd expect that imported wine would generally be much more expensive, so if a category is particularly popular, perhaps local wineries see a reason to try to win over the domestic market with a high quality and cheaper product. A second reason might be what we discussed in our conversation of the Barolo wars. The risk seems to be that every winery in the region can make a very similar product which increases the threat of entrants and makes it harder for a winery to differentiate itself unless it's one of the early success stories.
ReplyDeleteInteresting point Gabrielle. One local winery that came to mind on this topic was Jacuzzi up in Sonoma (of hot tub fame). The first time I was up there with a big group, the person pouring for us was talking about how the Jacuzzi family wanted to make wine from only Italian varietals, to celebrate the family's heritage. I thought this was interesting because some of the grapes they grow are not well suited for the region. Michael Hannan mentioned in class how nebbiolo doesn't grow well outside Italy where it is the backbone of Barolo and Barbaresco, but it's one of the flagship varietals at Jacuzzi.
ReplyDeleteHowever, I just checked the wine offerings on their website, and they're now offering two other varietals - a merlot made from grapes sourced in Sonoma, and a cab from grapes sourced in Contra Costa County in the East Bay. So, it seems Jacuzzi wanted to go away from the traditional varietals of California to celebrate the family's Italian roots, but the winery is now returning to its California roots with a merlot and cab offering...
I like both of the comments from Anna and Thomas but would add a third possible reason: soil and climate. Katie and I certainly found that Hawke's Bay (in comparison to Marlborough) had a much more diverse set of soil types and microclimates due to the specific geographical history and features. This means that Sauv Blanc is not a varietal that is well suited to many parts of the region. Certainly in the premium wine segment, if you want to grow the grapes that will create the highest quality, most complex wine, selecting a varietal that is appropriate to the soil and climate would be important and thus stimulate a desire to branch out beyond a single varietal.
ReplyDelete