Appellations beat brands in FUOR debate

France’s appellation system was declared its most effective marketing tool during a debate at London’s France Under One Roof (FUOR) tasting yesterday.

The event, dubbed “Appellations versus Brands” was organised by Thierry’s to discuss whether added value lies in brands, in appellations or a combination of the two.

Speaking to db after the event, Matthew Dickinson, commercial director for Thierry’s commented, “Appellations are a fantastic marketing tool and a brilliant signpost for the customer.”

“If there was a generic body for Wines from France, and I was asked which direction it should take, I would say, ‘take the one you are taking’, because France is moving up the retail price scale to dominate at higher price points.”

Dickinson pointed out the although French wine sales are down 2% in volume, they are up 3% in value in the UK off-trade, while the average retail price of a bottle of French wine is now £5.44, compared to £4.88 for the total market (Nielsen MAT 07.01.12).

He added that of the £733 million worth of wine France sells in the UK off-trade, £500m is from appellations.

Patrick Schmitt, editor of the drinks business, who spoke at the debate alongside Anne Burchett from Sopexa and Michelle Smith from Sainsbury’s, said that for long term returns, selling by appellation – where style and quality can be connected to a bounded place – is highly effective.

This is because such wines aren’t easily replicated, while the approach allows for collective promotion, which is particularly important for France’s fragmented supply base.

Although Patrick quoted Wine Intelligence research which showed that the most important cue among regular wine drinkers in the UK is the grape variety, the promotional offer and then the brand, he reminded that many appellations in France are themselves brands.

He added that the same Wine Intelligence study showed that seven of the top ten most recognised wine regions worldwide were within France.

Referring to this fact, he concluded, “That, for me, is a clear competitive advantage for France, and one that should be fully exploited.”

Most important cues for regular* wine drinkers in the UK

Grape Variety
Promotional offer
Brand
Country
Recommendation by friends or family
Region

Most recognised wine regions for regular* wine drinks in the UK

Bordeaux
Champagne
Burgundy
Chablis
Chianti
Rioja
Beaujolais
Côtes du Rhône
Napa Valley
Provence

Source: Wine Intelligence Vinitrac Survey, 2011

*Wine Intelligence defines “regular” as drinking wine at least once a month.