Q1 2018 | Issue 7

Brand Power, Innovations & Trends

To celebrate the company’s 15th anniversary, Intelligence is running a series of global workshops focusing on brand power, innovation and trends.

The Global Wine Brand Power Index What does a tell your ranking the 15 most powerful brands consumer in the UK and Germany? Reports shop Wine Intelligence reports provisional publication schedule for 2018

Australia & New Zealand North America New Zealand Landscapes 2018 Q1 Rosé & Blush Wine Drinkers in the US Market Closures and Packaging in the Australian 2018 Q1 and New Zealand Market 2018 Q1 Canada Landscapes 2018 Q1 Rosé Wine Drinkers in the Australian Market Q2 US Portraits 2018 Q2 Australia Landscapes Q3 US Millennials & Future Consumers 2018 Q3 in the Australian Market Q3 Sparkling Wine in the US Market 2018 Q3 Australia Portraits 2018 Q4 Canada Portraits 2018 Q3 China & East Asia US Landscapes 2018 Q4 Sparkling Wine in the Chinese Market 2018 Q1 South America Flavour & Varietal Preference in the South E-Retail & Communications in the Brazilian Korean Wine Market 2018 Q2 Market 2018 (PT & EN) Q1 China Landscapes 2018 Q2 Brazil Routes to Market 2018 (PT & EN) Q2 Sparkling Wine in the Japanese Market 2018 Q2 Sparkling Wine in the Brazilian Market 2018 China Label Design & Branding 2018 Q3 (PT & EN) Q3 Japan Landscapes 2018 Q3 Brazil Landscapes 2018 (PT & EN) Q4 Continental Europe UK Germany Label Design 2018 (DE & EN) Q1 UK Label Design 2018 Q1 The Netherlands Landscapes 2018 Q2 On-Trade Trends in the UK Market 2018 Q2 Belgium Landscapes 2018 Q2 UK Portraits 2018 Q2 Sparkling Wine in the German Market 2018 Sparkling Wine in the UK Market 2018 Q3 (DE & EN) Q3 Flavour & Varietal Preference in the UK Portugal Landscapes 2018 (PT) Q4 Wine Market 2018 Q3 Switzerland Landscapes 2018 Q4 UK Landscapes 2018 Q4 Germany Portraits 2018 (DE & EN) Q4 Multi-market Visit the Wine Intelligence Reports Shop online Global Consumer Trends 2018 Q1 at www.wineintelligence.com/reports-shop for Global Wine Brand Power Index 2018 Q1 Lower-alcohol & Sustainable 2018 Q2 details of all current and archived reports. Global Compass 2018-19 Q3 Please note that the publishing schedule is Closures and Packaging in the UK and Irish advisory and subject to change. Market 2018 Q3 Nordics Publication dates Finland Landscapes 2018 Q1 Quarter 1 (Q1) - January-March 2018 Sweden Landscapes 2018 Q2 Quarter 2 (Q2) - April-June 2018 Quarter 3 (Q3) - July-September 2018 Quarter 4 (Q4) - October-December 2018

2 | wineiQ | Q1 2018 Contents Comment At our first strategy meeting of Wine Intelligence, just over 15 News and events years ago, our immediate goals were simple: work out if we could The latest dispatches from the Wine pay the rent, pay our bills, have enough time to complete a relatively 4 Intelligence Global Team small number of projects and find the next projects to work on. Stats of the quarter We also had a fairly grandiose vision, which we articulated in our This edition, our stats of the quarter business plan: become the world’s number one provider of market come from Italy and Finland 5 research services for the wine category. As we wrote at the time: Global Consumer Trends 2018 “Wine businesses around the world need to understand more about This year’s 12 trends focus on their markets, consumers and how to make money servicing them. the themes of health, personal, Other industries are further advanced in this regard because of 6 sustainability, society and provider-led either scale, simplicity of product or market pressures. For the wine category to compete, it needs to be better informed.” The Global Wine Brand Power Index The 15 most powerful wine brands in 15 Fifteen years later, our fundamental goals remain the same, and key markets published to celebrate the arguably (it’s one of those claims that can always be disputed) 10 15th anniversary of Wine Intelligence we have achieved the vision of becoming the go-to company for global market insights on the wine category. However, we feel Bring on the bubbles there’s much left to do: the global wine industry’s profitability is China’s interest in sparkling wine improving, but – with some notable exceptions – the sector is is increasing due to a new type of facing some challenging headwinds and missed opportunities. 16 consumer Branding is one area where progress is being made, albeit on a long Worth a thousand words journey. Our Global Wine Brand Power Index, published earlier Four years after our last study of UK this month and the cover subject of this edition of WineIQ, charts label designs, we look at what a wine the success of global brands, some of which have been hitting the 18 label tells UK consumers high notes for decades, others a similar (or younger) than Wine Intelligence itself. The adjacent story, on Consumer Trends, Rosé beginning to bloom carries some encouraging signs for wine, in that the fundamentals The US is seeing an increased interest driving consumer behaviour are often things the wine category in rosé, according to our Rosé & Blush does well: Respect (for environment, community, etc); Obsession 20 Wine Drinkers in the US Market 2018 (for uniqueness, memorability, detail); and Frictionless (immediate report gratification, amply demonstrated by the growth of wine as a fast- delivery online purchase in China). A question of style in Germany consumers tend to If there is another theme in this edition, it is the growing prefer simple and prestigious labels, attention that is being paid to the effectiveness of labels and 22 according to our first German Label Design 2018 report packaging in conveying messages about appropriateness and value to New Zealand by the numbers consumers. The conventional wisdom Latest stats from the New Zealand of the wine category has long taught Landscapes 2018 report that labels are the primary advertising 25 vehicle for your brand, given the lack of margin available to buy major Behind the scenes media campaigns. As with branding Wilhelm Lerner, Associate Director and generally, we as a category are only Country Manager for Germany, reflects now becoming better informed about 26 on life in the Wine Intelligence German the impact of labels on behaviour. ■ office, creating the first German Label Design report and working in the wine industry Richard Halstead COO, Wine Intelligence

Q1 2018| wineiQ | 3 Wine Intelligence Brazil hosts the first Brand Power, Innovations & Trends workshop celebrating the 15th anniversary of Wine Intelligence on 28 Febraury 2018 in São Paulo. News and events The latest dispatches from the Wine Intelligence Global Team

The first quarter of 2018 has been an exciting one for the Consumer Trends 2018 report and other insights from the global Wine Intelligence team. In January, we welcomed global wine and drinks industry. We will continue these Rodney Sammut as Country Manager for Australia and workshops into the upcoming quarter as we head to Chile, New Zealand, following the departure of Liz Lee to take New Zealand, Italy, South Africa, Spain and Portugal. up an insights role in New York. Rodney brings with him two decades of experience in consumer insights The first few months of the year would not be complete and marketing in the category, including without our annual seminar series at ProWein. This year we stints in leadership positions at Fosters, Southcorp and host four seminars – three in English and one in German McWilliams. Rodney now works with Ben Luker in – covering topics from Brand Power, the state of the our Sydney office and can be contacted at rodney@ German wine market, consumer trends and the world of wineintelligence.com. wine in 15 years’ time. We also deliver mini-briefings for reports published in 15 of our markets, again within our In the middle of January, CEO Lulie Halstead was a 15th anniversary theme. keynote speaker at Nedbank VinPro Information Day 2018 held in Cape Town, South Africa. She spoke on This next quarter, Wine Intelligence will launch a new wine and its place in society twelve years from now as wave of Vinitrac® and see new reports published. The part of a wider programme of speakers sharing their next wave of Vinitrac® will launch in March with a wave market expertise with delegates across the country. Lulie of Vinitrac® Sparkling Wine being launched in May. shared her ‘6 As’ for success in 2030, which include Other waves include July and October 2018 on Still Wine. Availability, Accountability, Accommodating, Affluence Quarter 2 will also see reports published on Flavour & and Adaptability. More information can be found on our Varietal Preferences in the South Korean Wine Market website. 2018 and Lower-alcohol & Sustainable Wines 2018, among others. A full list of 2018’s provisional reports can be In addition, we have also begun our Brand Power, found on inside cover. ■ Innovations & Trends Workshop Series as part of the celebrations of the 15th anniversary of Wine Intelligence. For more information about our upcoming events, This global series of workshops include findings from Vinitrac® surveys, and our consulting services, visit the Wine Intelligence Brand Power Index 2018, Global www.wineintelligence.com

4 | wineiQ | Q1 2018 STATS OF THE QUARTER Latest findings from our wine reports from around the world

Sparkling Wine in the Italian Market: Quality and value for money perception and Franciacorta are perceived as high quality products, whereas Prosecco and Lambrusco offer the best value for money

Pignoletto Alta Langa Franciacorta Champagne Prosecco Quality Lambrusco Trento Doc perception Asti (Mean where 0 = very low quality 7.0 9.0 and 10= very high quality) Pignoletto

Alta Langa Champagne Lambrusco Trento Doc Value for money Asti Prosecco perception Franciacorta (Mean where 0 = poor value for 5.5 7.5 money and 10= very good value for money)

Average of the perceptions from 1 to 10 Base= All drinkers of sparkling wine in Italy (n=999) Source: Wine Intelligence, Vinitrac® Sparkling Italy, August ’17, n=999 Italian annual drinkers of sparkling and light sparkling wines

Finland Landscapes: Channel usage Predictably, the monopoly retailer Alko dominates Finnish consumer shopping for wine; however, 3 in 10 consumers say they buy wine on a booze cruise.

From Alko 84%

From a ferry/cruise 31%

From a retailer in Estonia 24%

From Duty Free (e.g. airports) 16%

From another overseas retailer 13% The most price-sensitive consumers will go to Estonia and maybe the Latvian From Alko ordering assortment 7% border. They are the ones that buy in bulk so the price really matters Via the internet 4% Consumer Insight Manager

Via mail order 1%

Other 2%

I don't buy wine to drink at home 1%

FOR SIZING 100%

% who have bought wine from the following channels in the past 6 months Base = All Finnish regular wine drinkers (n=1,000) Source: Wine Intelligence, Vinitrac® Finland, October 2017, n=1,000 Finnish regular wine drinkers, Wine Intelligence Trade Interview, January 2018

Q1 2018| wineiQ | 5 Global Consumer Trends 2018

This year’s 12 trends focus on the themes of health, personal, sustainability, society and provider-led.

very January, Wine Intelligence publishes This year, we have identified 12 trends and were the results of a global review of consumer able to group them into larger themes of health, product and service trends collected by personal, sustainability, society and provider-led, our research teams around the world. allowing us to produce a round picture of what EApart from fuelling our natural curiosity about new makes consumers tick and what we can expect more things, the exercise can be quite revealing of broad of going into 2018. The Convergence factor has society-level movements, and how trends can cross allowed us to profile certain products or services categories, borders and continents with increasing that span multiple categories as case studies in the rapidity and ease. 2018 report.

As well as scrutinising our own industry’s innovation pipeline, we deliberately look outside wine – and outside drinks generally – to see what might be One of the enduring themes of going on across the metaphorical fence. This is Health Consumer Trends reporting over the sixth year we have published such a study, and the years has been health, and this if there is a macro-level finding between the six year we have defined this trend into editions, it is that we are seeing an increase in what three related elements: Recharge, might be dubbed the “Three Cs” of trends research. Exclude and Augment. These are: RECHARGE can be defined as products 1. Consistency (of certain trends and services that support the opportunity to throughout the period) recharge bodies, minds or indeed our electronic 2. Convergence (multiple trends devices (which are now seen as essential for bodies coming together in certain products or and minds). This year we can expect a variety of services, and/or trends aligning between products and services that help consumers not markets), and only keep up with their busy lives, but also take a 3. Creativity (growing incidence well-deserved break. A few examples: Bulletproof of mould-breaking originality and has produced FATwater, which contains special ambition). ingredients that help our bodies keep focused and energised, and David Lloyd Gyms, a UK fitness

6 | wineiQ | Q1 2018 company, has started holding group (CytoSport’s Muscle Milk) and a Probiotic control, or at least the appearance of control. napping classes throughout the work Beer created by researchers at National week, allowing people to recharge amidst University of Singapore. In partnership with this growing control, their busy schedule. FRICTIONLESS relates to the increasing expectation for immediacy, This year has also seen an increase in seamless transactions and improved products that EXCLUDE specific efficiency as there is now a refocussed Another perennial trend ingredients, typically from food or drink, Personal effort on making the path to purchase with the aim of improving health benefits. is the move towards as easy as possible for consumers. For Some producers have created gluten- or personalisation. This example, Uniqlo has launched a new set dairy-free products to cater to people appears to be evolving of vending machines in the US that allow looking for healthier options and people beyond the simplistic people to buy clothes through a machine who are allergic to such ingredients. (but effective) tactics of putting people’s and Alibaba in China has opened a café Consumers now have access to low-calorie names on products as Coca-Cola did. that operates with no cashiers. gin (Minus33) in the UK and the McVegan Now, the personalisation trend is moving Burger in Finland (McDonalds), among towards the interactive and user-initiated. others. We have defined these as Control and Frictionless. In a similar vein, companies are not only Sustainability is taking ingredients out of products to The trend of CONTROL is among Sustainability another megatrend improve health and/or experience, they our top 12 due to the amount of services that has grown in are also adding in beneficial dimensions allowing consumers to govern the way importance with the in order to ‘boost’ the product beyond they experience a product or service. From global society’s focus the original, a trend we have dubbed blend-your-own wine (Alan Scott Family on the environment, AUGMENT. This can be seen in Winemakers) to personal gym pods in China particularly among the younger foods, such as added protein to milk (MISSPAU), consumers now have more generations. This is currently manifesting

Q1 2018 | wineiQ | 7 in two observable trends, both of which are designed to lessen negative impact on the environment: Reduce and Re-purpose.

Many providers are creating environmentally-friendly products or services that either make consumers aware 2018 Consumer Trends Defined of their carbon footprint or allow them to REDUCE it. For example, alternative Recharge: Products and services that support the fuels are still increasing in popularity as opportunity to recharge either our bodies, minds or our seen by the introduction of rentable electric devices cars (Car2go). Products are also being created using alternative ingredients such as biodegradable coffee pods (Halo) and Exclude: Removing or reducing naturally occurring alternative packaging in Sweden (Tomorrow elements, typically from food and drink, with the aim of Machine). improving health benefits

In addition, many consumers and companies Augment: Adding additional ingredients or dimensions are RE-PURPOSING scraps and to products and services to ‘boost’ the benefits beyond the reusable material in order to make them original last longer. There is a push to recycle more at home (Zera) as well as reuse good ingredients at on-trade outlets (RePizza) Control: Exercising greater control over all aspects of our in order to help decrease their ecological lives helping us to optimise and personalise to more closely footprint and help their bottom line by meet our needs stretching ingredients further. Frictionless: The increasing expectation for immediacy, seamless transactions and improved efficiency

In addition to the focus Reduce: Recognising and prioritising the significant Society on the consumer and environmental and social impact delivered by reducing environment, there is also a focus on improving the waste functions of society and well-being of all as seen in the trends of Re-purpose: Reusing materials to extend product life Equality and Respect. or to create something entirely new can be defined as the EQUALITY Collective determination to more effectively collective determination to more effectively Equality: tackle disadvantage and discrimination with tackle disadvantage and discrimination with a focus on a focus on providing equality of opportunity providing equality of opportunity and treatment for all and treatment at all. Not only are there more devices allowing disadvantaged people Respect: Greater consideration given to the to perform every-day activities effectively provenance, community, craftmanship and impact of the (such as a braille smart watch by Dot products and services we choose watch), but there has also been a movement towards gender neutral announcements on Transport for London services and upscale Obsession: Focusing single-mindedly and clearly soup kitchens with high-quality leftovers on one purpose, product or service, often leading to a (Refettirui Felix). premium offer Similarly, RESPECT is a trend that focuses on greater consideration given to Fusion: Breaking traditional boundaries by combining, the provenance, community, craftmanship merging and blending between products & categories and impact of the products and services we choose. This can be seen in a new wave of vintners promoting the benefits of additive- Activate: Creating brand memorability and affinity free, minimal-intervention through interaction (Nat’Cool, Quello), as well as other producers only producing fair-trade-certified products (Pukka, Taza Chocolate).

8 | wineiQ | Q1 2018 Provider-led is the Provider-led umbrella for the last group of trends that focus on how products or services are made. Whether it is companies specialising in one particular item in order to make it the best, new products being produced that fuse together two or more previously separate ideas, or technology accelerating a product, Obsession, Fusion and Activate are all trends that allow the consumer to experience a brand-new product.

OBSESSION refers to a product or service that focuses completely on one purpose or product and often leads to a premium offer. There has been a rise in single-focused restaurants and shops, order to lure potential customers. modern consumer thinks and behaves. such as Avobar in London, which serves As the year continues, we imagine more only avocado themed dishes, and a Pinot Similarly, ACTIVATE is a way examples will be emerging, showing one Noir-only wine shop in multiple markets that producers are creating brand – or more likely more than one – of the (Pinot Shop). In addition, obsession also memorability and affinity through characteristics we have outlined. Not all manifests itself in a fastidious approach interaction. Companies are making either the products launched will be successful to presentation, as seen in Lee Kang-bin’s their purchasing process or marketing – in fact, studies of innovation success latte art that replicates the oeuvres of interactive through technology in order rates have consistently found that famous painters such as Van Gogh and to better engage potential buyers. For the vast majority of new product Much using food dyes instead of paint. example, many companies are leaning launches fail. However, the oft-repeated on augmented reality in order to increase statistical failure rate of innovation FUSION is another way providers are interaction, as seen in wine labels (19 does not account for two important differentiating their products – something Crimes), retail (Runner Camp in China) consequences of a new product that has been with us a while, but the and a variety of other outlets. launch. Whether a roaring success or incidence of such developments has been not, a genuine positive innovation will increasing. From alcohol-infused sausages shift consumer expectations within a (Maguire Meats) to IPA barrel-aged whisky INSPIRATION AND category; and the existence of a new (Glenfiddich), this trend seeks to create new EXPECTATION idea will inspire competitors (or even and innovative combinations of flavours, By examining these 12 trends, we are the innovators themselves) to build on categories or even brand partnerships in able to better understand just how the it and improve it. ■

Q1 2018 | wineiQ | 9 Global Wine Brand Power Index THE 15 MOST POWERFUL WINE BRANDS IN 15 KEY WINE MARKETS

uilding a successful international wine category: if a wine is a ‘brand’, it automatically brand is notoriously difficult. A brand becomes a problematic product for some people manager approaching this task must within the supply chain. first overcome the large and fragmented Bnature of the global wine market and the inherent Over the past 15 years, the team here at Wine complexities of wine production itself (the wide Intelligence has closely monitored the performance variety of grape varieties, styles and not to mention of a number of wine brands across the 32 markets vintage variations). Margins on wine are typically a that we cover in terms of wine consumer usage lot thinner than in other consumer goods categories, and attitude. While the environment remains tough so there’s less marketing budget to put towards for brand growth within wine, we have witnessed building awareness and positive perceptions a number of transformational success stories: compared with, say, soft drinks, spirits or beer. And brands that didn’t exist 20 years ago have become then there is the inherent snobbishness of the wine world leaders, and older brands that have done

10 | wineiQ | Q1 2018 well at a national level have managed to knowledge of what makes a power brand, internationalise. To mark the company’s the theory of which we look into in this 15th anniversary, Wine Intelligence has report, we combined these measures to published the Global Wine Brand Power create an algorithm that revealed the top Index report. This report reveals the 15 wine brands for 15 key wine markets. most powerful 15 wine brands in each of 15 key wine markets, but also the top 15 To create a global index we combined global wine power brands – all based on the results from the 15 markets, however, consumer feedback. the populations of those markets vary considerably. While US data represents The Global Wine Brand Power Index 95 million regular wine drinkers, Ireland is the result of an algorithm developed represents a much smaller population of by Wine Intelligence using data from 2 million regular wine drinkers. Therefore, our wholly-owned Vinitrac® surveys the index is weighted based on the of roughly 16,000 respondents in 2017, population sizes of each market to give a fair which is representative of approximately representation of the global performance of 380 million wine drinkers in 15 key a brand. Ireland, Japan, South Korea and the UK. wine markets. As well as measuring the consumer’s consumption behaviour and The results show that US wine brands The top 15 brands have succeeded in attitude towards wine, Wine Intelligence dominate the global wine brand power out-performing other brands in terms of Vinitrac® surveys also determine the with 40% of the most powerful wine awareness, purchase and connection with health of a brand by asking respondents brands in the world, due to the size of the consumers according to the algorithm. What the following questions: US population and their preference for were the key factors that drove the success? domestic wines. Other countries of origin • Which brands they have heard that perform well with their wine brands Today, the average wine consumer at a of from a list of 40 to 60 are Australia and Chile. Australia has 3 of supermarket or in a wine shop is faced brands (we tailor each brand list the top 15 global wine power brands whilst with lots of brand options, and therefore for each market) producing 5% of the world’s wine (OIV) it is very rare to find a consumer who is • Which they have purchased in and Chile produces 4% of the world’s wine 100% loyal to one wine brand – a finding the past 3 months (OIV) yet has 4 out of the 15 most powerful which also holds for consumer products • Which they would consider wine brands in the world. generally. Throughout a year they tend to purchasing have a large wine brand repertoire – one • Which they feel an affinity The brand that takes first place in the Global wine brand buyer is also likely to be buying towards Wine Brand Power Index is Yellow Tail. A the competitor brand. The ultimate aim of • Which they would be likely to relative newcomer, Yellow Tail leads in terms a power brand is to be the most purchased recommend to a friend. of global brand power due to its success wine brand and the key to achieving this is to in the USA and also a range of other key be in as many consumers’ brand repertoires Based on our understanding and past markets including Australia, Canada, China, as possible.

Global Wine Brand Power Index markets 15 countries were chosen to represent the most important and influential markets for wine

AustraliaAustraliaAustralia Japan JapanJapan Brazil BrazilBrazil PortugalPortugalPortugal CanadaCanadaCanada South SouthSouth Chile Chile Chile Korea KoreaKorea

China China China Spain SpainSpain SwedenSwedenSweden FranceFranceFrance UK UK UK GermanyGermanyGermany USA USA USA IrelandIrelandIreland

Q1 2018 | wineiQ | 11 Global Wine Brand Power Index 2018 Consumer evaluation across 15 key wine consumption markets

st th 1st 1 9th 9

nd th 2nd 2 10th 10

rd th =3rd =3 11th 11

rd th =3rd =3 12th 12

th th 5th 5 13th 13

th th 6th 6 14th 14

th th 7th 7 15th 15

th 8th 8

The Global Wine Brand Power Index is calculated from data from the Global Wine Brand Power Index 2018 report.

Source: Wine Intelligence, Vinitrac® Australia, Brazil, Canada, Chile, France, Germany, Ireland, Japan, Portugal, Spain, Sweden, UK and UK (n=13,816) regular wine drinkers. Wine Intelligence, Vinitrac® China (n=1,006) urban upper-middle class imported wine drinkers. Wine Intelligence, Vinitrac® South Korea (n=1,000) semi-annual drinkers of grape based wine in South Korea.

12 | wineiQ | Q1 2018 To be in as many consumers’ brand up a larger proportion of wine drinkers build awareness due to recognition, repertoires as possible, it is fundamental compared to heavy category users and especially because it also acts as a to drive awareness among category users. because they only drink occasionally, they constant reminder to those browsing Having a low awareness in a wine market do not know or buy many brands. As a the shelves, which increases the chances means that you are more likely to attract result of their limited brand repertoire, they of the consumer considering buying the the heavy category users, or those who tend to show a bit more loyalty just because brand. Although awareness is important, drink wine on a regular basis. The issue they have fewer brands to choose from. minimising barriers is also key: do we with heavy category users is that they tend give to consumers their favourite varietals to be more knowledgeable about brands The first step in brand building is making with our brand? Do we extend to the new and, therefore, tend to buy a wider variety a consumer aware of the brand and emerging styles of wine? Do we have st th of brands. Sticking with one or two brands there are several techniques to achieve different tiers for different occasions? 1 9 is not their forte. In addition, because this. The most important is making they are knowledgeable, they tend to have the brand available to the consumer as Building brand awareness and recognition adventurous tastes, which means they find well as providing enough recognisable is key in growing business for your wine new wine brands appealing. cues in order to make it easy for the brand. It is important to be aware of these consumer to find the product. Adding top 15 brands in order to learn from their nd th However, heavy category users are few certain distinctive elements that makes successes and think about how you can 2 10 and far between. So, if the aim is to grow it different from its competitors apply strategy to your own brand. You a brand, the best method is to focus on and thus standout in the eyes of the can learn more about our Global Wine light category users – those who drink wine consumer is also key in achieving brand Brand Power Index in our report that was less frequently. These consumers make recognition. Availability is a tool to help published on March 1st 2018. ■ =3rd 11th The most powerful wine brands by market 2018

Australia China =3rd 12th Brazil Canada Chile

5th 13th

France Germany Ireland Japan Portugal 6th 14th

7th 15th

South Korea Spain Sweden UK US 8th

Source: Wine Intelligence, Vinitrac® Australia, Brazil, Canada, Chile, France, Germany, Ireland, Japan, Portugal, Spain, Sweden, UK and UK (n=13,816) regular wine drinkers. Wine Intelligence, Vinitrac® China (n=1,006) urban upper-middle class imported wine drinkers. Wine Intelligence, Vinitrac® South Korea (n=1,000) semi-annual drinkers of grape based wine in South Korea.

Q1 2018 | wineiQ | 13 #1 most powerful global brand

Interview with Libby Nutt General Manager, Marketing and Export Sales Casella Family Brands

When and how was Yellow Tail brand, supported by vibrant ‘born’? packaging. Yellow Tail is built on our relaxed Australian The first shipments of Yellow Tail were attitude, coupled with high in 2001, to Northern Ireland and the US, quality wine. We have been based on the sound intuition and strategic single-minded inOwned focusing by:on OwnedCasella by: Family BrandsCasella Family Brands vision of John Casella. John identified a product consistency and over gap in the US market for what we now delivering at an affordableOrigin: Origin:Riverina Region, RiverinaAustralia Region, Australia term as a ‘true value proposition’. From price. a taste profile perspective, he wanted Launch date: Launch2001 date: 2001 to make a wine everybody would enjoy. What have been the Having grown up in a traditional Italian biggest challenges for family, where wine was always on the table, Yellow Tail? repeat purchase, which pays dividends he hadn’t always enjoyed it, as it was often over time. Success in new markets has quite tannic and not so easy to drink. As a The number one challenge has been come from stand-out on shelf, whilst also result, he always had a vision to make wine keeping our momentum in mature remaining ‘friendly and approachable’. enjoyable. And that’s always been true for markets, which we have achieved by As we have the iconic kangaroo on our everything we still do today, we’ve focused working closely with our partners and label, consumers identify Yellow Tail with on making wine easy to understand. continually innovating. Australia, which is aspirational to many, particularly in the minds of Chinese What do you believe have been What has the Yellow Tail strategy consumers at the moment. the key drivers of success of been when entering new Yellow Tail? markets? In your opinion, what are the key drivers for successful brand The wine category had been very traditional When we enter new markets, we very building in the wine category? and taken itself quite seriously. We knew much think about ‘brand in hand’ and how that consumers were primarily looking we can be part of consumers’ lives, instead When we look at the wine category, it’s for wines that could be easily understood of talking at them, talk to them. This has incredibly fragmented and consumers and that tasted great. We weren’t afraid been very important in driving our success shop across multiple brands and products. to challenge the traditional wine category and has enabled consumers to experience The main driver from our perspective is norms, with a playful and approachable and taste Yellow Tail, driving crucial to have a compelling, authentic, unique and consistent brand story and to ensure product quality is consistent and of course a great taste will always remain one of the most important functional drivers in wine. If you’ve got a great brand story and product quality and they work in sync, then fantastic.

How do you see the Yellow Tail journey developing over the next 15 years?

One thing that will always remain the same is our playful and approachable personality which continues to have universal appeal and be the cornerstone of making us the world’s most desired wine brand. ■

14 | wineiQ | Q1 2018 #2 most powerful global brand

Interview with Sebastian Aguirre Casillero del Diablo Global Marketing Director Concha y Toro

When and how was Casillero del What have been the Diablo ‘born’? biggest challenges for Casillero del Diablo? The legend of Casillero del Diablo goes back more than 130 years in Pirque. One of the challenges for Owned by:Owned by:Concha y ConchaToro y Toro Concha y Toro’s founder, Don Melchor Casillero del Diablo has Concha y Toro, spread the rumour that the been to build a brand that Origin: Origin: Santiago, Santiago,Chile Chile devil himself protected the cellar where he generates value in an industry kept his best wines to prevent thieves from that is highly fragmented and Launch date:Launch date:1883 1883 entering to steal them. Over the years, commercially competitive. It is this rumour became the legend that gave always a challenge for brands birth to the Casillero del Diablo brand that like Casillero del Diablo to literally means ‘Devil’s Cellar’. combine their global position, without Brands must be built with a solid quality ever losing the essence of its origin and consumer confidence foundation. From the 1960’s, the decided to whilst keeping the brand current and Secondly, the brand message that is make these wines available to consumers, attractive for new generations of wine communicated has to be relevant, unique launching the Casillero del Diablo brand, drinkers. and memorable for consumers. This with the most classic of its varieties: generates consumer attraction for a , the varietal that In your opinion, what are the brand and contributes to the brand value is still core, not only in Chile, but also key drivers for successful brand proposition. It is also very important throughout the world. building in the wine category? to deliver brand differentiation. Finally, successful brands must have broad and What do you believe have been Quality and consistency are by far the effective distribution, allowing them to be the key drivers of success of most important key drivers to succeed. always available to consumers. ■ Casillero del Diablo globally?

Firstly, the success of Casillero del Diablo is due to the quality of the wine — without it, our growth would not have been possible. This consistency in quality has led us to be recognised all over the world by the most prestigious wine critics and, most importantly, by consumers who have total confidence when they see and choose a bottle of Casillero del Diablo.

This has been supported by our strong tradition and history, and remained consistent for decades and our strong ongoing focus on brand building, positioning Casillero del Diablo as a great global valuable brand. Another factor to be noted is the strong building of a robust range, which allows us to offer our consumers different styles and varieties and products for all their consumption occasions.

Q1 2018 | wineiQ | 15 Bring on the bubbles

China’s interest in sparkling wine is increasing due to a new type of consumer.

hina still hasn’t quite found a taste for bubbly – but what might happen if it did? Globally, the sparkling wine Ccategory continues to grab headlines and grow much faster than still wine, even though typical sparkling volumes in a given country are generally around a tenth of still wine volumes. For Demographics of Chinese urban upper-middle example, Germany, the world’s largest sparkling wine market, consumes 5 class drinkers of sparkling wine bottles of still wine for every 1 bottle of sparkling. Partly this is a cost issue, and partly it’s the fact that sparkling wine, traditionally, was only a drink of celebration, and for many people it doesn’t fit with the idea of an everyday drink.

In China, the sparkling craze has yet to bite. The country consumed over 160 million 9-litre cases of still wine in 2016, but only 1.6 million 9-litre cases of sparkling (source: the IWSR) – in other words the equivalent of 1% of still wine, versus our notional norm of 10%. And yet, we are starting to observe some changes in the market that are making sparkling a more accessible Source: Wine Intelligence, Vinitrac® China Sparkling, October 2017, n=1,000 Chinese product and are allowing consumers to see past traditional prejudices against sparkling wine. Between them, these “Chinese people are generally more aware drinkers of sparkling wine are more likely may fundamentally change how bubbly is of than sparkling wine, one of to drink red wine, with 73% reporting consumed in the country. the reasons being that there aren’t many they have drunk red wine in the past 12 occasions where one could drink (or months, compared to 29% who have drunk For the first edition of the Sparkling think about drinking) sparkling wine,” Champagne and 28% who have drunk Wine in the Chinese Market report, according to one wine educator. The lack Italian sparkling wine. Wine Intelligence launched its maiden of occasions was, in the past, compounded Vinitrac® China Sparkling survey to by a lack of understanding and perceived However, the report also shows that understand sparkling wine consumption value of sparkling wine – if you wanted there is an emerging generation of in China, supplemented by trade bubbles and a refreshing taste, according to Chinese – effectively, the urban educated interviews amongst importers and the conventional wisdom, you drink beer. millennial cohort, who have graduated retailers. According to trade sources, the from university in the past 10 years – who majority of Chinese consumers have The consumer data we gathered for the are now exploring beyond the traditional yet to discover sparkling wines such report shows that the Chinese generally red Bordeaux that their older peers once as Champagne, and Prosecco, feel little connection to sparkling wine. flocked to. They want to fit in, enjoy life, mainly because of a lack of awareness. The majority of urban upper-middle class identify with people around them and value

16 | wineiQ | Q1 2018 “Overall, the prospect Suggestions from the trade of sparkling wine is looking good” 1. Raising awareness Some insights we have gathered from trade sources suggest that raising -Offline retailer in China awareness for sparkling wine will be something to prioritise for brands. While online sales have helped immensely on increasing market exposure, another possible way to increase awareness is to organise more tasting experiential consumption. Sparkling wine events at popular off-trade channels such as supermarkets. “I’ve seen plenty connects with their needs by projecting of tasting events for red wine and , but there’s not many tasting a Western lifestyle and making the events for sparkling though, which is something brands could consider occasion special – and perhaps most when promoting sales,” suggested an online retailer. importantly, it’s not what their parents are drinking. 2. Ride on the success of still wine “A brand I am aware of ” is the most important purchase cue for consumers Although Champagne is the most of different types of sparkling wine, especially for Champagne. Currently, widely known sparkling , sparkling brand recognition is dominated by well-known brands such as its high price means only a small group Perrier-Jouët. Trade sources state that consumers also buy sparkling wines of consumers can afford it and it is from brands they already recognise through still wines. Therefore, brands primarily associated with gifting and with both still wines and sparkling wines will enjoy a better advantage in the conspicuous consumption (mostly at market. corporate events and in night clubs). However, importers and retailers predict 3. Thirst for healthy a drink that the non-Champagne sparkling Chinese people have been increasingly health conscious over the years, wines will soon lead to a breakthrough which partly contributed to red wine’s achievement in the market. “Most in coming years, 1) because the price is wine consumers drink red wine for the health benefits, so red wine is usually typically lower and 2) because the flavour their first choice,” said a wine educator. Based on our Vinitrac® data in is more suited to the Chinese palate, 2017, 56% of Chinese wine drinkers sees red wine as a healthy drink. On both of which allow consumers to enjoy the contrary, current perception on sparkling wine remains to be more of it on informal occasions. a drink of luxury rather than a healthy drink. If brands could appeal to this craving for good health in marketing, it is likely that we’ll see some increase Confirmed by both trade sources and in consumption in the future. consumer survey, the style of sparkling wine that has the greatest potential in China would be sweet (not sugary sweet like candy but sweet enough to balance the high acidity in sparkling wine), slightly sparkling (think frizzante), lower “Chinese consumers have yet to discover the diversity of in alcohol and exhibit ripe fruit flavours. sparkling wine, and education remains key to increasing their For example, the Italian sparkling wine brands Martini and Cavicchioli have awareness and appreciation of the beverage. Conveying gained some success in the Chinese market – their flavour is easy for the message that sparkling wine can be drunk at informal new consumers to accept, and the occasions such as gatherings with friends is crucial.” affordable price makes it more versatile to be consumed for relaxation, friends’ -Chuan Zhou, Wine Intelligence Research Director gathering or celebration.

Similarly, sparkling wine, particularly good,” an offline retailer commented, along with increasing an awareness French Champagne, is often presented suggesting that these new consumers among consumers, sparkling wine may as a luxurious, high-end, romantic drink, may be overlooking them. Non- become the next go-to wine for Chinese which is perhaps taking a toll on the Champagne sparkling wine is expected consumers. ■ growth of sparkling wine as it is not to facilitate sales in the sparkling being consumed on frequent occasions. category as long as brands recognise “Chinese usually associate sparkling wine these stereotypes and promote sparkling with formal or celebratory events, like wine as a “light, easy and approachable annual functions or weddings” said a drink, be it at home or at restaurants”. distributor. As the Chinese wine trade continues to Despite these stereotypes, “overall, the shift towards importing more affordable, prospect of sparkling wine is looking good value-for-money sparkling wines,

Q1 2018 | wineiQ | 17 Worth a thousand words What a wine label tells UK consumers

irst impressions, it is often said, are crucial and long lasting in any relationship. In the wine world, it has been a long- Facknowledged fact that when it comes to Our 10 label categories for the UK explained your brand’s first interaction with a new Prestigious: Traditional labels, strong Simple Elegance: Clean labels with consumer, it is crucial to provide a visual use of black & gold, font dominated and significant white of black space, often stimulation that pulls them in and makes imagery typically confined to heraldry, wine with a single, clear image representing them reassured about the idea of buying estate or illustrations the unique brand name & story with it. minimal text The wine category has a particular Estate: Detail-oriented labels, with strong Artisan: Artisan styling – with essence limitation in this area, in that the use of vineyard & wine estate imagery and of being hand-crafted. Images selected underlying look of the product – the 75cl limited colour palettes often reflect the natural world, with an bottle – is very hard to make distinctive. emphasis on floral or vine-like designs Worse still, when a brand owner goes to Classic: Simple, clean labels with dark Text: Text dominated the label, telling the trouble of designing a bottle shape or size that is distinctive, it can often text on white/cream backgrounds, limited the winegrower’s/ region’s story, or the put consumers off because it lacks the use of text and serif font to maintain clas- style & flavour of the wine reassurance cues which are so important sic feel for consumers shopping in a confusing Vibrant Classic: A dominant bright col- Vintage: Distinctive vintage styling, and socially-charged category. our, combined with classic fonts & images imagery and typography are black and white, often with distinctive brand name Which leaves a relatively small window of opportunity: the wine label. While Crafted Luxury: Embossed, easily Simple Contemporary: Distinctive, consumers often rate other elements as recognisable as high quality and premium, uncluttered, often themed around non- more important in their wine purchase white or black, with brushes of gold, silver traditional wine name & imagery decision hierarchy – for instance the & other metallic varietal, where the product is from, and other similarly pragmatic reasons – Wine Intelligence tracking data shows that over one third of UK regular wine profound effect on consumer choice, to So what purpose should a label drinkers admit that using the appeal of the point that they will claim to like one serve? the label is an important factor when product more than another because they selecting wine, and it is becoming a more prefer how the product looks – even if While it needs to convey key information important factor to wine drinkers than the wine they have tasted is the same about styles, origin and the brand, it also in previous years, especially amongst in both bottles. The real story of wine need to appeal visually to consumers. younger segments of the wine drinking labels, we believe, is that such visual As a result of the wide variety of wines population. signals also mean something for the other available, labels need to both stand two thirds of drinkers, but either they out from a crowd and tell a story that We use the word ‘admit’ advisedly: in are unwilling to admit it, or it is simply compels the consumer to look more discussion group research we have found an unconscious factor in their decision closely. They need to communicate their that how a wine is labelled can have a making. suitability for all kinds of tastes, budgets

18 | wineiQ | Q1 2018 and wine drinking occasions within just a few moments – making it an unbelievably Take Jacob’s Creek for example. By important first impression count. “Our insights suggest analysing variables such as brand that, when it comes to awareness, brand purchase and brand Four years on from our first report on the connection, our recent Global Wine Brand subject, our new UK Label Design report wine labels, UK regular Power Index has found Jacob’s Creek to offers insights into exactly what labels be one of the most powerful brands in appeal to the UK consumer in 2018. wine drinkers still seem to the UK. So what are they doing right? If love all things simple and we take out all other variables and look In order to do this, label design specialist, only at their label, we see they are offering Amphora, once again helped us to traditional. “ exactly what UK consumers are telling develop 10 labels that best demonstrate us they want: the use of minimal colour, the core features of each label category. elegant logo, and their easy-to-read and Therefore, with these new categories, the While some ‘central to the wine category’ understand label are all highly appealing labels have remained the same as those 10 label designs tested were Prestigious, factors to the UK consumer. was tested in 2014, we have introduced Estate, Classic, Vibrant Classic, Crafted the following new categories: Luxury, Simple Elegance, Artisan, Text, Other brands that feature in our Global Vintage, and Simple Contemporary. Wine Brand Power Index also confirm • ‘Crafted Luxury’ is an elite, Definitions and examples can be seen on the UK consumers’ preference for more opulent and deluxe design, the previous page and below. simple and traditional style labels: Casillero sitting in the more premium del Diablo’s recognisable emblem and price bracket What did we find? classic font is a cross between our ‘Classic’ and ‘Prestigious’ categories, while through • ‘Artisan’ follows the popular Our insights suggest that, when it Kumala, we can see elements of the trend of hand-crafted comes to wine labels, UK regular wine growing in popularity category ‘Simple products, unique to the drinkers still seem to love all things Elegance.’ individual and reflecting the simple and traditional. Categories that natural world illustrate heritage and elegance, with only By looking at ‘aspirational’ categories in one or two key colours, are the most the UK market, brands should be able to • ‘Text’ brings the consumer appealing and most trusted to consumers. see exactly what they need to do to be or one step closer to the Traditional looking labels typically signify remain competitive. And while we can’t producer through stories of brands that have a long history of making predict what will happen in 10 years time, winemaking, with an authentic wine, who are proud of their heritage, when it comes to wine labels in the UK ‘seal of approval’ from the something consumers often feel they can for now: keep it classic and simple while winemakers themselves trust to be of good quality. retaining an element of distinctiveness. ■

Our 10 label category archetypes for the UK

Q1 2018 | wineiQ | 19 Rosé beginning to bloom The US is seeing an increased interest in rosé, according to our report on Rosé & Blush Wine Drinkers in the US Market 2018.

ine drinking has always and don’t mind drinking something rosé, but they’re drinking more of it carried social and sweet and cheap. It also developed a too – 23% of those who drink rosé political connotations. reputation (somewhat deserved) for state that they drink more than they In some markets, low quality product, which fuelled did 12 months ago. particularlyW in the English-speaking the socio-cultural backlash that world, the act of drinking wine at all lasted through the 1990s and into In the report, we also outline some used to set the drinker apart in terms the 2000s. Within the past ten years, of the similarities and differences of their social or cultural class. Such however, rosé has staged a significant between rosé and blush wine class distinctions are still present in revival in the US (and elsewhere) drinkers. For example, both wines certain emerging markets such as led by higher quality product, both tend to appeal to the younger drinker China, Southeast Asia and India. domestic and imported, and a – perhaps because they are less aware growing sense that its lighter, food- of the historical stigma. A third of Within wine as a social friendly style is an excellent fit with both rosé and blush wine drinkers construct, the position of rosé 21st century lifestyle. are under the age of 34. wine has been fraught with difficulty – and never has Perhaps the most significant shift Rosé also continues to be the this been more true than in perceptions occurred when the upmarket pink wine and those who in the United States. Provence region of France began drink it tend to spend more on wine Having been part of the a sustained marketing push to across most off- and on-premise initial democratisation sell premium-level, sophisticated occasions, particularly in the of wine in the examples of rosé. The Provençal on-premise. It also attracts more 1970s and 80s, style offered a drier, more premium knowledgeable consumers: 54% of rosé (or ‘blush’ option and created a clear distance rosé wine drinkers feel competent wine, as it was from the perceptions of sugary about their wine knowledge versus more commonly wines lacking in sophistication. 51% of blush wine drinkers. They known), was Suddenly, rosé wines had a bright also tend to have a higher awareness Image: © Shutterstock / BigLike Images an accessible, future. Other countries, notably of wine-producing countries and sweeter, pleasant- Spain and Italy, wanted to be part of regions of origin. Blush product it and began exporting their rosés drinkers are more likely to associate that California and as availability increased, so did rosé wine with ‘sweet’, suggesting could produce awareness. there are still consumers who have in vast quantities. yet to acknowledge the distinctions It found a ready Several brands have capitalised between rosé and blush. audience of American on this shift and helped to propel drinkers who liked the it further. By educating their According to our research, idea of drinking wine but consumers through premiumisation significantly more US regular wine didn’t particularly enjoy the of packaging and the general drinkers are motivated to drink tannic, strong flavours of red presentation of their rosé wines, rosé wine ‘because it is trendy’ than wine, nor the oaky intensity of they have become some of the most any other type of wine. With that most of the whites available at successful brands in the US wine in mind, it is likely that rosé will the time. market. continue attracting more consumers and with that, there will be more Since its initial surge in According to our Rosé and Blush opportunities for producers, perhaps popularity, the rosé/blush Wine Drinkers in the US Market even extending into sparkling category then suffered. It 2018 report, 37% of the adult rosés. One thing is for sure, having became associated with population currently drink rosé, distanced itself from the stigma of people who don’t know which has grown from 24% in 2004. blush wine, rosé wine is well and anything about wine Not only are more people drinking truly in the pink. ■

20 | wineiQ | Q1 2018

Villa Maria activity.” “I wouldn’t “I wouldn’t

hesitate to recommend to recommend hesitate Wine Intelligence to colleagues Intelligence Wine “I have had the“I have O’Neil Vintners & Distillers O’Neil Vintners performance and planning future efficiently. The final report has been The final efficiently. and implemented these quickly andand implemented and peers in the industry. They took in the industry. and peers time to understand our requirements our requirements time to understand Alex Parra, Director of Marketing, of Marketing, Director Parra, Alex incredibly useful in understanding our useful in understanding incredibly opportunity with to work standard for our industry.” for our industry.” standard Wine Intelligence on several on several Intelligence Wine www.wineintelligence.com. projects over the years and truly years the over projects We believe in supporting wine business in every way way supporting wine business in every in believe We too. our industry all, it’s After can. we all wine that publishing reports by help is we One way extensive To see our from. can benefit organisations we help how about and find out more collection report be successful, wine brands biggest some of the world’s visit Market Insights through our wine our wine through Insights Market reports and issue-based market expertise and professionalism raises the expertise raises and professionalism value our partnership.value Their approach,

“Wine Karissa Kruse, Kruse, Karissa President, Sonoma County President, Intelligence has been an Intelligence feedback beyond the data.” feedback beyond

exceptional partnerexceptional in helping better understand the U.S. wine and insight to provide actionable and insight to provide the Sonoma County Winegrowers Winegrowers the Sonoma County consumer and sustainability. The consumer and sustainability. team are easy to work with, responsive with, responsive easy to work team are and able to leverage years of experience years and able to leverage Wine brand development – Vinibrand® development Wine brand insights & qualitative quantitative Bespoke, strategies entry Wine business market Brand health assessment Brand

Our services are based on a unique combination based on a unique combination Our services are global wine trade and extensive of solid research been involved have Some of our team experience. had prior of us have wines, and many in developing and retailing wine, wine of distributing experience selling. on-premise • • • We can help you with help you can We •

Image: © Shutterstock / BigLike Images A question of style in Germany German wine consumers tend to prefer simple and prestigious labels, according to our first German Label Design 2018 report.

he time-honoured axiom ‘don’t judge a why not for wine? As with UK labels discussed in book by its cover,’ is often trotted out our UK Label Design 2018 report (see page 18), when it comes to a discussion about German label designs aim to tell consumers a lot wine labels. The saying is equal parts true about the type, quality and heritage of the wine – Tand useless, and its imperative tone seems almost and ultimately your whole brand equity – in only a designed to kill any sensible thinking. Consider the few short moments. With this in mind, the Wine logic: of course, the cover of a book (or the wine Intelligence German office set out in Autumn 2017 label) is not going to tell you everything about its to understand just what styles of labels really appeal contents – how could it? Yet in the absence of to the German consumer. either a decent interval in which to read a chapter or two, or a tasting counter with an open bottle, We started our study with a review of the current consumers of books and wine respectively tend to design landscape. For this review, we partnered with have to make some fairly rapid decisions based on one of Germany’s leading label design and marketing appearance. Hence the investment in book cover agencies, Quantum X, and selected 40 existing designs that convey, through font, colour and packaging designs we considered representative for photography, to tell the potential reader very quickly the design landscape in Germany. We then tasked whether they are about to buy, for instance, a gritty consumer focus groups in Munich, Cologne and detective yarn, or a life-affirming story of friendship Hamburg to group the 40 designs in what they and romance. considered similar and explored the perceptions and views. From their results, we extracted 10 label If this is true for books (and lots of other products), archetypes from the groups that Quantum X then

22 | wineiQ | Q1 2018 Prestigious has strong use of gold and traditional colours. • ‘Klassic’ displays traditional visuals and typeset. • Standard with strong use of photos with modern type. • Young classic, Vibrant Classic and designed to test on a wider audience. These ten label styles Our 10 label category archetypes Contemporary are more modern, timely variations are characterised below and on the next page: for Germany of the before mentioned archetypes. • Simple / Minimal reduces the front label We then tested these 10 labels on German consumers to test and emphasises few visual or test elements their perception of different wine labels. Our results showed • Artisan follows the popular trend of hand the following: crafted products reflecting the natural world • Origin Specific picks up the revival of Overall, when it comes to wine labels, German regular wine local interest and displays symbols of the region / drinkers seem to want their labels to be either simple or country of origin prestigious. • Vintage follows the retro trend present in many food and beverage categories ‘Simple Minimal’ is the most well received label overall ranking as the label with best stand-out, perceived quality and likelihood to buy. It also scores second for attractiveness and third for price expectation. Runner-up is the ‘Prestigious’ archetype scoring first for price expectation, second for Prestigious Prestigious

Standard ‘Klassik’ Vibrant Classic Standard ‘Klassik’ Vibrant Classic

Simple Minimal Artisan Young Classic Simple Minimal Artisan Young Classic

Origin Specific Vintage Contemporary Origin Specific Vintage Contemporary

Q1 2018 | wineiQ | 23 perceived quality and likelihood to buy, by ‘Prestigious’ and ‘Vibrant Classic.’ For Overall, brands and producers must take but it has high scores for stand-out and the age group 60+ ‘Simple Minimal’ is the time to understand the preferences attractiveness. only ranked 6th with ‘Klassik’ ranked 1st, of their audience, keeping in mind their ‘Standard’ and ‘Prestigious’ following up brand positioning when designing a ‘Origin Specific’ is ranked overall third on ranks 2nd / 3rd. The age group 40 – label and making that crucial decision with a noticeable drop-off in the likelihood 59 years old is middle of the road with between keeping ‘central’ to the category, to buy where it scored only 7th. The ‘Simple Minimal’ ranked 1st but followed or moving towards more unconventional ‘Standard’ archetype scored first for up by ‘Standard.’ styles. ■ attractiveness and second for stand-out but ranked midfield for the other criteria. Our 10 label categories for Germany explained Least appreciated by consumers was the Prestigious: Traditional labels, strong Simple Minimal: Use of simple ‘Contemporary’ archetype that scored use of white & gold mixed in with red elements such as clear, big wording, either 9th or 10th rank for all criteria. and black, imagery typically confined to letters or numbers in a simple colour Artisan and Vintage where 2nd and 3rd heraldry or wine estate scheme, reduced to basic information least appreciated archetypes messaging some stand-out but mostly low scores on ‘Klassik’: Labels use a white base paired Artisan: The labels stand out by all other criteria. with serif font and some sort of emblem, including an atypical element to the provide basic information about the winery, label, mostly something flowery, also the If we look deeper into our results, it is grape variety, vintage etc. font is usually outstanding important to notice some key differences between age groups. Being the newest Vibrant Classic: Labels are rather simple Origin Specific:Use of an element to the wine category, and having a more but have a loud coloured bar, that is usually that represents the country of origin open-minded attitude, younger age repeated on the closure such as a typical animal, symbol or the segments show openness to a broader country itself range of labels, not conforming to Standard: Generally very discreet labels, Vintage: Labels use old elements that designs typically seen as central to the font is neither traditional nor experimental are translated into something new with a category. On the opposite end of the age but rather standard, contains basic more modern vibe, does include an old segments, those over the age of 60 find the more unconventional labels far less information about winery, images are rather font and/or old backgrounds, that are appealing than the average drinker in the modern and often show usually not white UK. Young Classic: The labels are Contemporary: The labels generally based on ‘Klassik’ that has been combine a mix of elements that exceed ‘Simple Minimal’ is the clear #1 ranked modernized to some extend regarding font, existent category borders by e.g. using for likelihood to buy for the age group colours and graphics untraditional label colours, they also use 18 – 39 years followed by some distance a mix of old and new elements

Summary of response to labels: Scorecard overview Labels displayed in order of overall ranking

Source: Wine Intelligence, Vinitrac® Germany, Oct’17 (n=1,000), German regular wine drinkers

24 | wineiQ | Q1 2018 New Zealand by the numbers

Latest stats from the New Zealand Landscapes 2018 report

DrinkWine categoriescategories showingshowing significant significant growth growth in inthe the New New Zealand Zealand market: market: Rosé wine: Craft beer: Prosecco: 39% 33% 10% of New Zealand regular of New Zealand regular of New Zealand regular wine drinkers now wine drinkers now wine drinkers now consume rosé wine (vs. consume craft beer vs. consume Prosecco (vs. 7% 34% in 2014) (23% in 2014) in 2014) Source: Wine Intelligence, Vinitrac® New Zealand, Oct‘14 (n=1,006), and Oct’17 (n=1,000), New Zealand regular wine drinkers Wine Intelligence trade interviews - January 2018

Country of origin awareness and consumption Over 90% of New Base = All New Zealand regular wine drinkers (n=1,000) Zealand regular wine drinkers indicate that they have bought wine in New Zealand 93% 96% the supermarket in the Australia 61% 88% past 6 months, compared to the next highest France 23% 85% ranked channel, in a traditional liquor store, Italy 15% 79% at 34% of regular wine California - USA 8% 69% drinkers

Spain 10% 68% Source: Wine Intelligence, Vinitrac® New South Africa 13% 65% Zealand, Oct’17 (n=1,000), New Zealand Source: Wine Intelligence, Vinitrac® New Zealand, Oct’17 (n=1,000), New Zealand regular regular wine drinkers; Wine Intelligence trade wine drinkers; Wine Intelligence trade interviews - January 2018 Chile 11% 59% interviews - January 2018 Germany 4% 52%

Portugal WINE MARKET SUMMARY:3% 50% Wine volumeWinegrowth volume rates: growth rates: ShareShare of importedimported wine: wine: 30th largest wine market 3.0% Argentina 6% 49% Total wine consumption: 8,932 '000 9l cases of still light wine 2.0% Long-term trend 2012-16: 0.26% CAGR 2012-16 24% Other USA (outside of California) 1% 23% 1.0% Per capita consumption: 23.6 litres per year (still light wine) 0.0% FOR SIZINGImported wine consumption: 2,160 '000 9l cases of still light wine -1.0% 100% Share of imported wine: 24% 76% -2.0% 2013 2014 2015 2016

Sources: IWSR 2016, ComTrade, Wine Intelligence Calibration studies (2011-2016), Wine Intelligence Vinitrac®, Wine Intelligence market experience

ECONOMIC SUMMARY: GDPgrowth rates: Q1 2018 | wineiQ | 25 Adult population: 3.7 Million 5.0% GDP/capita: $ 38,345 Dollars 4.0% GDP long-term trend: 2.99% CAGR 2012-16 3.0% GNI/capita: $ 39,070 Dollars 2.0% Unemployment rate: 4.90% Corruption index: 90 0 to 100 (100 = no corruption) 1.0% Comparative globalisation index: 10 1 to 10 (10 = very globalised) 0.0% 2013 2014 2015 2016

Sources: World Bank, IMF, United Nations, Eurostat, Trading and Economics, Transparency International, Starbucks, The Guardian BEHIND THE SCENES

quantitative research with Vinitrac®. €2.99 on a bottle of wine purchased in the off-trade, and the correlated increase of Was there anything surprising drinkers who spend above €5 on a bottle about the German Label 2. New ways of reaching wine Designs report recently consumers in Germany are developing published? What else did you and the retail channel mix is learn? transforming. Since 2007, supermarkets and the internet have become increasingly Most surprising for us and our design important wine-buying channels for partner Quantum X was to understand German regular wine drinkers; far from the data that when it comes to wine fewer German regular wine drinkers are labels, German regular wine drinkers seem choosing to buy their wine through mail to love things either simple or prestigious. order. In-store information is an emerging These two archetypes where clearly on top opportunity. Wine style descriptions at the of the ten label archetypes we identified. point of purchase have grown to become ‘Simple Minimal’ is the most well received the second most important choice cue label overall ranking as the label with when purchasing wine, ahead of ‘region of best stand-out, perceived quality and origin’. ‘grape variety’ continues to be the likelihood to buy and scoring second most important choice cue. for attractiveness and third for price 3. Metropolitan areas are of growing expectation. Runner-up is the ‘Prestigious’ importance. As in many other mature archetype scoring first for price economies the top 30 metropolitan areas expectation, second for perceived quality in Germany will outgrow the rest of and likelihood to buy but having midfield Germany. This is especially important as scores for stand-out and attractiveness. the upcoming younger consumer target Wilhelm Lerner, Associate segment with attractive spending power will concentrate in this areas. Director and Country Manager If we look deeper into our results it is for Germany, reflects on very important to notice a key differences between age groups. Being the newest How do you think the German life in the Wine Intelligence to the wine category and having a more wine market compares to German office, creating the open-minded attitude, younger consumers other countries? first German Label Design 2018 show openness to a broader range of report and working in the wine labels, not conforming to designs typically Certainly, Germany is one of the most industry seen as central to the category. On competitive wine marketplaces in the the opposite end of the age segments, world given its high share of discount, those over the age of 60 find the more strong domestic demand and heterogenous What kind of clients and unconventional labels far less appealing structure. This said, its comparative projects are you working on in than the average drinker in Germany. attractiveness with trading-up and more the German office? adventurous consumers, a transformation of channel to market mix for the food We are pleased to report a strong What are the most important retail as well as specialty retail and the increased interest in consumer and market long-term trends in wine in increasing professionalization of the sector information from the German office. Germany at the moment? provides opportunities. Clearly players The demand is driven by three groups looking to build long term positions with a of clients and topics: (i) German clients I would say three spring to mind: professional, innovative and fresh attitude looking to revitalise, relaunch or accelerate 1. Consumer behaviour provides new to marketing and sales will find Germany the growth of their export business, (ii) opportunities. Growing involvement, an opportunity! German clients looking to leverage recent trading up by German consumers trends in the German market to gain share and more openness to trying new and Do you have any advice in their home market and (iii) international different styles of wine is creating new for exporters looking at the brand owners and associations that have opportunities in the German wine market. German market? put Germany on their target export market Especially noteworthy is the steady list. The work itself ranges from consumer decrease in the number of regular wine The crowded marketplace with thin focus groups, trade interviews and drinkers who state they spend below margins and heterogeneous structure does

26 | wineiQ | Q1 2018 German attitudes towards wine German regular wine drinkers are becoming BEHIND THE SCENES increasingly engaged within the wine category and are trying new and different styles of wine, not allow for fast success. Good practice examples particularly the younger consumers. demonstrate that a spend-as-you-go mentality focusing on creating supply chain pull from demonstrated success in initial pilots can deliver a Tracking profitable entry. % who agree with the following statements about wine Base = All German regular wine drinkers (n>1,000) What inspired you to work in the wine industry?

Above all, it is the product and people that excite me II know what what I like I and like I tend and I tend to stick to what I know to stick to what I know working in this industry. 46% 44% 46% I know what I like and I tend to stick to what I know 51% * What’s your favourite wine? II don’tdon't mind mind what what I buy soI buy so long as the price is right long as the price is right As for many of us I enjoy the diversity and broad 8%* spectrum of wines! This said, you will find on 12% I don't mind what I buy so long as the price is right I enjoy trying new and our dinner table for family and friends quite often Idifferent enjoy stylestrying of wine new on and a different styles of wine on a regular basis white varietals with aroma like , regular basis the Burgundy family and from cool climate 48%* I enjoy trying new and different styles of wine on a regular basis origins like Germany, South-Tirol and Austria. ■ 42% *: statistically significantly higher than previous wave at a 95% confidence level 12%* *: statistically significantly lower than For more information7% about the German previous wave at a 95% confidence level market, see page 22 for findings from our 2016 2017 German Label Design 2018 report, published in March 2018. Source: Wine Intelligence, Vinitrac® Germany, Mar‘16, n=1,005 and Jul’17, n=1,000 German regular wine drinkers Later in the year, Wine Intelligence is due to publish Sparkling Wine in the German Per age group Market 2018, which aims to look at sparkling % who agree with the following statements about wine wine consumption in the country. Base = All German regular wine drinkers (n>1,000)

43% 42% All German 18-39 40-59 60+ regularAll German wine years18-39 old years40-59 old years60+ old regulardrinkers wine I enjoy trying new years old years old years old I enjoy trying new and different styles of wine on a regular basis Alldrinkers German48% 56% 51% 37% and different styles 18-39 40-59 60+ I don't mind what I buy so long as the price is right regular8% wine 11% 8% 6% I enjoy trying new and different styles of wine ofon wine a regular on a regularbasis 48% years56% old years51% old years37% old I don'tknow mindwhat whatI like Iand buy I sotend long to asstick the to price what is I rightknowbasis Alldrinkers German44%8% 34% 11%41% 8%57% 6% 18-39 40-59 60+ I enjoyknow whattrying I newlike andand Idifferent tend to stick styles to ofwhat wine I know Ion don’t a regular mind whatbasis I regular48%44% wine 56%34% 51%41% 37%57% 2015 2016 years old years old years old I don't mind what I buy so long as the price is rightbuy so long as the drinkers8% 11% 8% 6% price is right I enjoyknow whattrying I newlike andand Idifferent tend to stick styles to ofwhat wine I know on a regular basis 48%44% 56%34% 51%41% 37%57% I don't mind what I buy so long as the price is rightI know what I like 8% 11% 8% 6% I know what I like and I tend to stick to what I knowand I tend to stick 44% 34% 41% 57% to what I know

Red: statistically significantly higher than all German regular wine drinkers at a 95% confidence level Blue: statistically significantly lower than all German regular wine drinkers at a 95% confidence level

Source: Wine Intelligence, Vinitrac® Germany, Mar‘16, n=1,005 and Jul’17, n=1,000 German regular wine drinkers

Q1 2018 | wineiQ | 27 Globally connected. We believe that the only way to really understand what drives us as consumers is to watch, listen and learn.

That’s where you’ll find us.

We’ll be following home lives by rummaging through kitchen cupboards (with their owners’ permission) in suburban Sydney, surveying 5,000 in Germany, France and Denmark, or recording in-depth interviews with women in Chengdu, China.

Camera, recorder, questionnaire and discussion guide in hand, you’ll find us just about anywhere.

Contact your regional LONDON - HEAD OFFICE E [email protected] • T +44 (0)20 7378 1277 Wine Intelligence office: www.wineintelligence.com

AUSTRALIA - Ben GERMANY - Wilhelm SPAIN - Juan E [email protected] E [email protected] E [email protected]

BRAZIL - Rodrigo ITALY - Pierpaolo US - Erica E [email protected] E [email protected] E [email protected]

FRANCE - Jean-Philippe SOUTH AFRICA - Dimitri E [email protected] E [email protected]