MARKETING: BRAND BUILDER – Port in a storm

Sandeman has struggled to generate strong sales in the UK. But, says Fionnuala Synnott, it has the brand identity needed to turn that around

With his hat tilted at a rakish angle, the Sandeman don cuts a dash wherever he goes, including the UK. Research conducted by Drinks Insight indicates that 66% of UK consumers recognise the Sandeman brand. But despite being something of an icon, Sandeman’s sales have not lived up to its image and the Port brand only has a market share of around 1% in the UK.

Sandeman began to lose market share under the ownership of The Seagram Company, which relied heavily on its distribution agreement with Oddbins to build sales in the UK. In fact, the Port category does not appear to have been a priority for Seagram, which was more focused on building the Chivas Regal brand.

Although Sandeman’s aged tawnies are viewed by some in the Port trade as exceptional, in the past, the brand has been criticised for the poor quality of its vintage Port. Hopefully, the quality of Sandeman’s wines will improve now that Sogrape owns the brand. The Port giant has invested heavily in Sandeman since taking it over in 2002. In the past four years, the brand has won over 200 medals including an IWC gold medal and a best in class medal from the IWSC. The 2003 vintage was also well-received by the wine press.

Sogrape has committed a significant sum to making viticultural improvements and restructuring Sandeman’s winemaking facilities. “We have a strong commitment to the Douro and have recently bought a quinta of 80 hectares, taking us up to nearly 600 hectares in the valley”, says Júlio Martins, the area manager responsible for the UK & US at Sogrape Vinhos SA. However, Sogrape’s real innovation was revamping Sandeman’s packaging. This involved using a more sophisticated bottle design to reinforce the brand’s quality image.

In 2005, the company appointed independent wine shippers Stevens Garnier to take charge of Sandeman’s UK distribution. Johnny Powell, director of Stevens Garnier, says, “The Sandeman don is an icon and we have to build our distribution to match its high level of consumer recognition.”

By ramping up its marketing and distribution in the UK, Sogrape hopes to be able to replicate Sandeman’s success in the US, where Sandeman controls around 20% of the Port category. According to Martins, Sogrape is focusing on developing Port’s image as well as the brand. He comments, “In the US, we are trying to stretch the limits of the category. We are currently trialling a cocktail programme in Manhattan in a bid to introduce Port to new consumers and new Port moments to existing consumers.”

In the UK, Sogrape plans to increase Sandeman’s market share by growing its presence in the on-trade and in independent retailers. This strategy is not without obstacles as Powell explains, “Restaurants find it easy to accept Sandeman as an alternative to the other Port offerings on the market. The difficulty lies in getting people to look at their Port category. You have to come up with a real point of difference in order to get them to do this.”

According to Powell, Sandeman has made significant inroads into some of the large UK wholesalers. But the UK Port market is mature, and breaking down the dominance of other brand owners such as Symington Family Estates and The Fladgate Partnership won’t be easy. Sandeman is targeting the premium end of the market and is trying to tap into the consumers who already know the brand. Martins says, “We don’t think we would have anything to gain by taking the supermarket route. Critical mass is important but getting listed in the off-trade is very expensive.”

Sogrape is looking to revitalise Sandeman’s image through its premium range. Martins says, “Our key focus will be quality. Sandeman was quite strong in the market before Seagram acquired it. Recognition and awareness of the brand are still there among older consumers – our target customers. It is just a question of revitalising this awareness by offering a quality product.”

Stevens Garnier is hoping to raise the brand’s profile through its presence at The Wine Show and is also looking into taking a stand at the BBC Good Food show. Powell says, “Consumer shows are a good way to revive the brand and support the distribution we have already. Last year’s Wine Show was a great success as people tasted and bought a significant amount of LBV and ruby Port.”

Sogrape will be actively promoting Sandeman’s tawny offering after research into the Port category showed that consumers find classic vintage Port intimidating. Powell comments, “Undoubtedly, tawny Port is more versatile and more easily understood than vintage Port. Although it is intrinsically wonderful you don’t have to be a Port connoisseur to be able to appreciate it.”

Sandeman is a strange phenomenon of a strong brand with little sales. But Sogrape and Stevens Garnier are determined to give the brand a new lease of life. “The franchise is worth building on and we’re very excited about it even though there are a few challenges ahead”, says Powell.

© db November 2006