Title: Flow of presentation: Section 1
1Flow of presentation Section 1
- Section 1 where are we now?
- 1.1 - Market overview
- 1.2 - Channels to market
- Section 2 whats important when shopping for
wine? - 2.1 - Consumer wine buying process
- 2.2 - The role of wine
- 2.3 - Trade perceptions
- Section 3 who is drinking California wine?
- 3.1 Profile segmentation
- 3.2 - Behavioural attitudinal analysis
- Section 4 perceptions of California wine
- 4.1 - Consumer perceptions
- 4.2 - Trade perceptions
2Section 1.1 Market overview
- Section 1 where are we now?
- 1.1 Market overview
- The key facts market size growth
- 1.2 Channels to market
- Off-trade
- Key facts
- Pricing
- Branding
- Multiple Grocers
- On-trade
- Key facts
- Pricing
3UK wine market Key facts
- Worlds largest and most dynamic market for
imported wine - Worth over 9 billion ( 3 on previous year)
- Wine share of all alcoholic drinks is now nearly
30 by value - and is growing faster than other categories
- 2nd biggest opportunity to USA for most producer
countries - But growth in consumer spend on wine is only
65 of overall growth in total consumer spend - UK average bottle (75cl) price growing at only
10p to 15p per year - and population of wine drinkers is declining
- Volume growth from heavy drinkers ( at least 3
bottles (75cl) /month) - Values at consumer prices covering both off- and
on-trade - Figures cover still light wine, sparkling wine,
fortified wine
SourceIWSR 2003 AC Nielsen 2003 Mintel Wine
2003 Drinks Pocket Book 2003
4The UK wine drinking population
- PROFILE OF WINE DRINKERS
- Gender
- 63.6 of Men
- 68.8 of Women
- Social status
- 51 of wine drinkers are ABs
- 34 of wine drinkers are C1s
- Purchasing behaviour (off-trade)
- 76 buy in supermarkets
- 24 buy elsewhere
- Projected trend for 2000-2005
- 11 drop in numbers of 25-34s, almost balanced by
a 6 increase in the 35-44 age group - The 25-44s a key target group
- The largest rise forecast the 55-64 age group
Source Wine Intelligence other studies
5UK wine consumption (litres/head) has steadily
increased
Source ACNeilsen 2003
6Red white wine consumption is equal
Red wine has been increasing share of throat by
1-2 per year for the last 10 years, and overtook
white wine by volume in 2003
Source ACNeilsen 2003
7The UK continues to be a growth market
- Where is the growth going to come from
- Heavy drinkers driving both volume and value
growth - Primarily red wine - both volume and value
- Higher bottle (75cl) prices
- Some reduction in widespread supermarket
discounting (possibly) - More volume at 5.99
- Some consumers trading up the rest generate the
low-end volume - Sparkling wine primarily Champagne
- Values at consumer prices covering both off- and
on-trade - Figures cover still light wine, sparkling wine,
fortified wine
Source Key Note 2002, IWSR 2003
8Where is this growth coming from?
Source HM CE clearances Drinks Pocket Book 2004
9The latest news. . .
Source ACNeilsen 2004
10Sales of US wine in the UK
Source ACNeilsen 2003
11Section 1.2 Channels to market Off-trade
- Section 1 where are we now?
- 1.1 Market overview
- The key facts market size growth
- 1.2 Channels to market
- Off-trade
- Key facts
- Pricing
- Branding
- Multiple Grocers
- On-trade
- Key facts
- Pricing
12Reaching consumers A few key routes to market
- share (volume) Trend
- OFF-TRADE
- Multiple grocers 58 Volume growing
- Multiple specialists 18 Volume/value static
- Independents 4 Value may grow/volume
decline - Direct/on-line 1 Value/volume growing
- ON-TRADE
- National / large multiples 13 Volume/value
growing - Other hotel/restaurant/bars 6 Volume/value
static - plus two other sources for UK consumers
- Direct from producers (mainly France)
- Cross-channel estimated at 4 - 6 of UK wine
volume consumption - Values at consumer prices covering both off- and
on-trade - Figures cover still light wine, sparkling wine,
fortified wine
Source Key Note 2002, IWSR 2003
13The UK market the wine choice is enormous
- Multiple grocer wine aisles
14Wine retailers can offer a more intimate
environment
15On-line retailing is a small channel, but growing
- Virgin Wines are the largest on-line specialist
wine retailer in the UK - Wines are sold in mixed themed cases, or
consumers choose from the wines profiled by style
to create a tailored package average price
6/bottle (75cl)
16Multiple grocers also offer on-line wine purchase
- Multiple grocers have successfully moved into
on-line retailing, including comprehensive wine
selections with on-line exclusive wines - Tesco offers over 800 individual wine SKUs
17Multiple retailers Majestic leads in sales by
the case
18The best route to the UK market depends on
production volume
On-trade
Your target market?
Your volume? Cases / Wine / Year
500-1000 250
gt1000 250-1000
Branded operator 1000 c/s
Supermarket gt 1000 c/s
Specialist retailer 250 ?1000 c/s
Top-end On/Off-trade lt500 c/s.
Ship Part-container/trailer-loads Intermediary
Stock-holding agency/importer Client Agency/im
porter who sell on to Shops/Restaurants/bars or
sell to wholesalers/distributors who sell on to
Shops/Restaurants/bars
Ship Container/trailer-loads Intermediary
Pure agency Client Supermarket/large
operator agency who distribute to their
retail outlets
Source Wine Intelligence
19Section 1.2 Channels to market Off-trade
Key facts
- Section 1 where are we now?
- 1.1 Market overview
- The key facts market size growth
- 1.2 Channels to market
- Off-trade
- Key facts
- Pricing
- Branding
- Multiple Grocers
- On-trade
- Key facts
- Pricing
20Light wine is the largest off-trade sector for
alcoholic beverages
Source AC Nielsen 2004
21The off-trade dominates wine sales in the UK
On-trade sales
Off-trade sales
Source AC Nielsen 2004
22..and continues to grow in importance
- The off-trade has seen 8 growth in volume sales
since 2002
Source AC Nielsen 2004
23Rosé is the wine style showing growth
- White wine consumption is declining in the UK
- Whilst the Rosé sector is the only style showing
growth, at 52 - Many of the market leading brands are launching
new Rosé styles
Source AC Nielsen 2004
24US wine types in the UK retail market
Source AC Nielsen 2004
25Source countries - Australia leads the pack
- The key competitive source countries for USA /
California wines are Australia and France - All old world wines are in decline, whilst South
Africa and Chile are the ones to watch
Source AC Nielsen 2004
26Section 1.2 Channels to market Off-trade
Pricing
- Section 1 where are we now?
- 1.1 Market overview
- The key facts market size growth
- 1.2 Channels to market
- Off-trade
- Key facts
- Pricing
- Branding
- Multiple Grocers
- On-trade
- Key facts
- Pricing
27The average price paid in the UK off-trade is LOW
- The average price paid for a bottle (75cl) of
wine in the UK Off-trade is just 3.76 6.76 - In the key distribution channel, the multiple
grocer, the average price paid drops to 3.56
6.40 - Exchange rate 1.80/1, spot rate 01-09-04
Source AC Nielsen 2004/ Wine Intelligence
28How does pricing work in the UK market? Sample
costings Cellar to Seller (Calif.)
- Vintners Price / case 12 x 75cl
- FOB _at_ San Francisco
Shipping cost (½ container) , including
Insurance UK
Customs/Port Clearance UK Wine Bond RHD
Costs, incl .6 weeks storage In Bond
European CCT UK Excise (per 12 x 75cl, still
table wine)
Profit element UK agency _at_ 22 Gross Profit
UK retailer _at_ 30 Divide by 12 Case to bottle
(75cl)
UK Value added tax 17.5 _at_ point-of-sale
Notes (i) Numbers are rounded averages
Exchange rate used 1.80 / 1.00(ii) RHD
receiving, handling, distribution CCT
Common Customs Tariff(iii) European CCT varies
as S(ALC / exch. rate) UK excise fixed for
all still wine(iv) Agency/retailer costs/margins
vary according to routes to market example
numbers based on traditional agency
29Under 5 is where the volume lies
- 85 of the volume of wine sold in the off-trade
is under 5 - However, growth is strongest in the over 5
category, but there is a long way to go!
Source AC Nielsen 2004/ Wine Intelligence
30Volume growth for California looks good under 5
- In the Off-trade under 5 category USA wines have
been steadily growing since 2002 - If the current rate of volume sales is
maintained, USA wines will overtake the UK 1
Australia in 2006 in the under 5
Source AC Nielsen 2004/ Wine Intelligence
31but there are problems for California over 5
- South Africa and Australia are showing stronger
growth than USA wines in the key 5 battleground - California wines need to strengthen their
offerings in the 5 category to ensure that they
are not left behind by the competition
Source AC Nielsen 2004/ Wine Intelligence
32California wine average price is decreasing,
whilst the competition is commanding more
3.96 equivalent US 7.12 (1.80/1)
Source AC Nielsen 2004
33Section 1.2 Channels to market Off-trade
Branding
- Section 1 where are we now?
- 1.1 Market overview
- The key facts market size growth
- 1.2 Channels to market
- Off-trade
- Key facts
- Pricing
- Branding
- Multiple Grocers
- On-trade
- Key facts
- Pricing
34So, what is a brandand what does it mean in the
wine category?
- A wine brand is a product cue projected by wine
packaging or information such as origin, grape
variety, region, price etc., for which consumers
search during their choosing process - (Halstead, 2002)
35Product cues as a proxy for brand - what the
experts say
- Main influences of the wine purchase decision are
product cues such as brand, label, price, product
experience knowledge to reduce perceived risk
(Spawton, 1991) - Information given in wine packaging (e.g. origin,
grape or region) act as brands (Cawley, 1992) - Price - used as in indicator for quality and to
reduce risk (Mitchell Greatorex, 1989) - Most important criteria for purchasing wine is
familiarity (Jenster Jenster, 1993) - The influence of origin more important in wine
than in most other categories - serves as
assurance (Duhan, 1999)
36Packaging to win hearts and minds
- Packaging is the total external offer
- The glass shape colour, weight
- The product name invented brand name
producer or estate name - The label design and style front AND back
labels - Packaging has to differentiate successfully with
two essential audiences - Gatekeepers
- Consumers
Source Wine Intelligence 2004
37The majority of wines sold are branded
- Most of the wines sold in the UK are branded
and their power is increasing as the market place
becomes more marketing savvy - Own-label still commands a significant portion of
the market, but this is in slow decline in the
face of brand dominance
Source AC Nielsen 2004
38..with the USA taking second place for most
branded volume
- Australia leads the way with the greatest volumes
sold as branded wines 9 of top 20 brands are
Australian - USA wines are a strong second, but hold only 5 of
the 20 top brands a few brands are working very
hard!
Source AC Nielsen 2004
39New world brands dominate the marketplace in the
UK
- 17 of the top 20 brands are from new world
countries - Australia takes the lead with 9 brands
- California is the next most successful with 5
brands however 2 of these are from Gallo the
volume sales are not reflected in a healthy
diversity of brands
Source AC Nielsen 2004
40Section 1.2 Channels to market Off-trade
Multiple grocers
- Section 1 where are we now?
- 1.1 Market overview
- The key facts market size growth
- 1.2 Channels to market
- Off-trade
- Key facts
- Pricing
- Branding
- Multiple Grocers
- On-trade
- Key facts
- Pricing
41Multiple grocers dominate the UK Off-trade
- of 9-litre cases 2002
- Tesco 16 million
- Sainsbury's 13 million
- Asda (Wal-Mart) 9.5 million
- Safeway 6.5 million
- Morrisons 2.5 million
- Marks Spencer 6 million
- Somerfield 4 million
- Waitrose 3.5 million
Now merged
Source Wine Intelligence What Trade Buyers Want
Report 2003
42The top 4 UK Multiple Grocers
- Tesco
- Sainsbury's
- Morrisons (inc Safeway)
- Asda/Walmart
43Of the multiple grocers, Tesco leads the way for
California
- Tesco is the most important channel for wine in
the UK with 32 market share - Tesco also shows the greatest commitment to USA
wines of all the leading grocers - Sainsburys, the UK number 2 grocer, trails for
California wine at approximately half Tesco volume
Source AC Nielsen 2003
44What does Tesco look like? The current story
(2004)
- Advertising slogan - Every little helps
- 237,000 staff, biggest private sector employer in
the UK - 1878 stores (including 910 TS) in the UK 440
in other countries including Thailand, Japan,
Poland and Hungary - 64 new stores opened in 2003 / 2004 with 82
planned store openings for 2004 / 2005 - Annual turnover to 2004 24,760m
45Tesco (cont.)
- Wine team being re-structured in 2004 personnel
changes (2 tier system) - Biggest drivers for buying policy are the top
line revenue and gross percentage margin - Blind spot when it comes to selling wine over 5
linked to focus on top line revenue and margin
compared with their competitors
46The range at Tesco (June 14th 2004)
47The range at Tesco (June 14th 2004)
48Section 1.2 Channels to market On-trade key
facts
- Section 1 where are we now?
- 1.1 Market overview
- The key facts market size growth
- 1.2 Channels to market
- Off-trade
- Key facts
- Pricing
- Branding
- Multiple Grocers
- On-trade
- Key facts
- Pricing
49The On-trade shows a very different profile to
the off-trade
Source Wine Intelligence
50The On-trade is complex and diverse
- Despite 81 of wines selling through the
off-trade, the on-trade has over 3x as many
outlets - This reflects the diverse and fragmented nature
of the on-trade in the UK a significant but
difficult market
Source AC Nielsen 2003
51The On-trade has multiple Channels
- Based on analysis of many large and small
operations - Characteristics are generalised to provide a
top-line profile of the channel
Source Wine Intelligence
52Restaurants are the largest on-trade channel
Source Key Note Catering Industry 2003 other
industry sources
83
53How do UK restaurants work?
- How the restaurant pyramid works
share of 8Bn market
National operators Now only 7 companies with more
than 100 outlets
12
London regional operators 60 companies of 10
to 100 outlets
13
Specialist operators 800 businesses with 2 to
10 outlets
10
Single-outlet operators Still account for nearly
80 of total outlets
65
Source Key Note Mintel
84
54Examples of on-trade wine menus
Bistro style Restaurant Wine List
Pubco Wine List
55Section 1.2 Channels to market On-trade -
pricing
- Section 1 where are we now?
- 1.1 Market overview
- The key facts market size growth
- 1.2 Channels to market
- Off-trade
- Key facts
- Pricing
- Branding
- Multiple Grocers
- On-trade
- Key facts
- Pricing
56Cellar to seller On-trade pricing for California
wines
- Notes
- Actual numbers will vary e.g. gross profits per
operator size of deal exch. rates etc - Retail prices will be rounded to nearest
price-point e.g. x.49 x.69
x.99 x.95
Source Wine Intelligence
57Flow of presentation Section 2
- Section 1 where are we now?
- 1.1 - Market overview
- 1.2 - Channels to market
- Section 2 whats important when shopping for
wine? - 2.1 - Consumer wine buying process
- 2.2 - The role of wine
- 2.3 - Trade perceptions
- Section 3 who is drinking California wine?
- 3.1 Profile segmentation
- 3.2 - Behavioural attitudinal analysis
- Section 4 perceptions of California wine
- 4.1 - Consumer perceptions
- 4.2 - Trade perceptions
58Section 2.1 Whats important when shopping for
wine
- Section 2 Whats important when shopping for
wine? - 2.1 - Consumer wine buying process
- Key purchase criteria
- Shelf Stand-out
- 2.2 - The role of wine
- Occasions
- 2.3 - Trade perceptions
- Key selection criteria
59Consumers the essential basics
Occasion What is the consuming occasion?
Consumer choosing and buying
Situation Where is the wine being bought?
Influences What external factors influence
choice?
Source Wine Intelligence various sources
60Consumer wine choosing in the UK - it is all
about reducing risk
- The consumer dilemma in all wine choosing
situations - In this environment-
- Well-known brands provide reassurance reduce
risk - All the Wine Intelligence research fieldwork
identifies as the biggest choosing driver
familiarity drunk this wine before - Therefore, trial of unfamiliar (i.e. new) wines
needs clear and strong encouragement
Will I like it?
Is it right for the occasion I am buying it for?
Source Wine Intelligence various sources
61Section 2.1 Whats important when shopping for
wine consumer key purchase criteria
- Section 2 Whats important when shopping for
wine? - 2.1 - Consumer wine buying process
- Key purchase criteria
- Shelf Stand-out
- 2.2 - The role of wine
- Occasions
- 2.3 - Trade perceptions
- Key selection criteria
62Previous wine experience is the key factor when
shopping for wine
- Previously having tasted the wine was considered
the most important factor when shopping for wine
(mean score of 4.2) - Grape variety (3.9), price (3.8), promotional
offers (3.7) and the country of origin (3.6) were
the next most important factors
Source State of California/Mondavi Consumer
Quantitative Study 2004
63Word-of-mouth is an important information source
- The chart below shows all the sources of
information about wine that were mentioned by
more than 10 of the sample - The three most commonly mentioned sources were
Word-of-mouth - Recommendations from friends and
family (71), Information on the bottle (75cl)
itself (65) and In-store displays or promotions
(55)
Source State of California/Mondavi Consumer
Quantitative Study 2004
64New and Old World wines satisfy different
purchase drivers
- Respondents were only asked to rate the regions
that they had selected within their top 3
regions. - New world wines are being heard about more
recently and are perceived to match peoples
lifestyles better - New world wines are not perceived as strong in
terms of quality, and people are prepared to pay
more for wines from the old world as well as
perceive these wines as more of a treat
Source State of California/Mondavi Consumer
Quantitative Study 2004
65Key purchase criteriaOverall observations -
the less involved
- The majority of consumers at this end of the
spectrum are fairly conservative in their
approach to choosing wine - They are buying their wine mainly from the
multiple grocer Sainsburys, Tesco, Asda,
Waitrose, MS - but also from local high street wine merchants
for convenience
Theyre always doing good deals, special offers,
promotions
I get it with the weekly shop its convenient
Threshers because its just down the road from me
Source State of California/Mondavi Consumer
Qualitative Study 2004
66Key purchase criteria Overall observations -
the more discerning
- The more involved consumers are prepared to take
a considered risk - When looking for something a bit special, they
are using wine merchants, e.g. Oddbins, Majestic,
local independent merchants, where they can
discuss their choices with the staff and
sometimes get to taste before they buy. They are
prepared to take a detour for a good merchant - Some are stocking up abroad
- Some are buying on-line with confidence (e.g.
Sunday Times, Virgin) - They will visit the multiple grocers for wine as
part of the weekly shop, or for special offers on
favourite wines, but the experience is more
rushed and not as enjoyable (and often the domain
of women)
Its more pleasurable in somewhere like Oddbins
where its a bit dusty, and theyve got slightly
weird and wonderful things, all the staff.
Source State of California/Mondavi Consumer
Qualitative Study 2004
67Decision triggers and attitudes the 5 steps to
choosing the general pattern
- After the consumer has decided whether red or
white wine, the decision gates are generally
straightforward, involving high levels of
familiarity and reassurance
Have a price range in mind
1.
Look for familiar cues e.g. brand, country,
grape
2.
Consider recommendations, awards, etc
3.
4.
Look for motivating packaging e.g. labels,
bottle (75cl) shape
5.
Seek out other information about the wine
Source State of California/Mondavi Consumer
Qualitative Study 2004
68Decision triggers and attitudesThe steps to
choosing - step 1
1.
Have a price range in mind
I dont want to be paying an absolute fortune
- THE LESS INVOLVED
- Target price is typically around 4-8 a bottle
(75cl) most are cautious and reluctant to make
mistakes by buying too expensively - ..but can depend on the occasion, e.g. they
might spend more to impress friends - Promotions are always enticing and encourage
trial
4.99 is quite a benchmark
..if you can get 1 or 1.50 off and still spend
5-6 more you are getting that little bit more
6 or 7 unless its something exceptional
Price is a given - other decisions have to fall
within this
Source State of California/Mondavi Consumer
Qualitative Study 2004
69Decision triggers and attitudesThe steps to
choosing - step 1
1.
Have a price range in mind
- THE MORE DISCERNING
- Will be looking to spend more for a good quality
wine that they can really savour. It is not
unusual for this group to be spending 15 on a
bottle (75cl) of wine to consume at home - Will be looking at a wider price range, from
5, and will experiment within this - Promotions remain enticing for favourite wines,
but can also point to poor quality wines - However, this group still need to feel that they
have received good value they might shop around
for a recommended wine
I would expect wine that is under a fiver to be
not wonderfuland if I wanted to taste the wine I
would expect it to start at a tenner
Source State of California/Mondavi Consumer
Qualitative Study 2004
Price range still underpins the decision, but
this market are prepared to be more flexible
70Decision triggers and attitudesThe steps to
choosing - step 2
Look for familiar cues e.g. brand, country,
grape
2.
Sometimes I fancy a Rioja and at times I
dontthen perhaps you go with a producer you know
- THE LESS INVOLVED
- Familiarity and previous experience provide
essential reassurance and trust that this wine
will be safe territory. - It also aids ease of choice when faced with such
a variety, and when needing to suit a particular
mood - Known brand is a key factor for this group
- However, some grape varieties, e.g. Chardonnay,
Merlot, are also considered as generically
consistent and safe
Ive started trying a lot of Chilean wines and I
do like themwhen I like something I just stick
to it really
Penfolds seem to do really well
You know that when you open a Chardonnay, you
know what you are going to get
Source State of California/Mondavi Consumer
Qualitative Study 2004
71Decision triggers and attitudesThe steps to
choosing - step 2
Look for familiar cues e.g. brand, country,
grape
2.
Villa Maria has a quality threshold and I would
tend to trust them and try anything theyve got
- THE MORE DISCERNING
- Quality brands can still be very key, especially
when there is less time to browse - This group have clear ideas about country and
grape characteristics. Country/grape can be key,
depending on the mood or the occasion - Regionality holds strong quality associations
for this group who show good wine knowledge
I might drink Australian or New Zealand tonight,,
because Ill be expecting strong flavours and
fruit, but maybe if its winter Ill be thinking
more Claret
If I were doing a barbeque tonight Id be more
likely to want to drink a Merlot or a Chardonnay
When it says Sonoma valley or Napa valley, those
are good things..these are premium places.
Whereas if it just says California, I dont feel
as if as much effort has been put into it
Source State of California/Mondavi Consumer
Qualitative Study 2004
72Decision triggers and attitudesThe steps to
choosing - step 3
Consider recommendations, awards, etc
3.
- THE LESS INVOLVED
- Recommendation provides a vital safety net,
minimising the risk of mistakes - Friends, trials at dinner parties
- Shelf descriptors indicating award winning wines
- Recommended wines of the month, supermarket
tastings - Staff recommendations. The most knowledgeable
staff tend to be the wine merchants as opposed to
the multiple grocers, e.g. Oddbins, Unwins,
Majestic - In store magazines, e.g. Majestic, Sainsburys,
Tesco
Quality marks..the Wolf Blass one has got medals
from different wine show s and stuff..
Source State of California/Mondavi Consumer
Qualitative Study 2004
73Decision triggers and attitudesThe steps to
choosing - step 3
Consider recommendations, awards, etc
3.
- THE MORE DISCERNING
- This group are more inclined to experiment, but
still like to seek out a second opinion or try a
new wine based on recommendation - In store advice, long discussions (and
tastings), particularly Oddbins, Majestic and
independent merchants - Press recommendation. (e.g. the Spectator,
Telegraph, Times). This group tend to have
favourite wine writers whose tastes match their
own
I actually make a detour into our local place if
I have time, because you know you are going to be
there for hours and have an enriching experience
talking to the chap who runs it
Source State of California/Mondavi Consumer
Qualitative Study 2004
74Decision triggers and attitudesThe steps to
choosing - step 4
Motivating packaging
4.
The basic label look s really cheap Tesco
- THE LESS INVOLVED
- If the wine is not recognised, packaging needs to
convey reassurances of safety and appropriate
imagery - Descriptive imagery on labels work well for this
group, e.g. Turning Leaf, - The more simple labels can be perceived as
denoting a boring wine, e.g. Penfolds - Bottle shape and colour also have considerable
influence on a subliminal level - Screw caps present a deterrent for the less
involved
The colour I found a bit oldy looking didnt
really appeal to me
The labelling seemed cool. I liked the picture of
the beach, its a bit informal
I know its very shallow to say, but it is an
attractive looking bottle
The one I didnt like is Villa Maria its got a
screw capsomething you get on an airplane. Not
very nice
The actual shape Kumala it looks smaller and
almost more formal, which I dont like
Source State of California/Mondavi Consumer
Qualitative Study 2004
75Decision triggers and attitudesThe steps to
choosing - step 4
Motivating packaging
4.
If I didnt know the wine at all and I didnt
have any other cues and I havent got much to go
on other than its a Chardonnay and they are all
the same price from the same area, then I am
going to have a look at the label
- THE MORE DISCERNING
- Choosing the wine by the packaging introduces an
element of risk, which these consumers enjoy - Simple, spare traditional, honest labels work
well for this group - visuals are often seen as cheap, mass produced,
lesser quality - but sophisticated visuals can win through, e.g.
chateaux, cricket bats - Unusual names can aid choice, e.g. Cricket
Pitch - Screw caps becoming quickly accepted by
discerning consumers, particularly for white wines
If Ive got ten Riojas sitting in front of me and
it looks like a cheap label I wouldnt be
attracted
The label with the bell tower suggests its there
for the tourists its not quite classy enough
Source State of California/Mondavi Consumer
Qualitative Study 2004
76Decision triggers and attitudesThe steps to
choosing step 5
5.
Other information
- THE LESS INVOLVED
- Will often read the back label for helpful
information, e.g. - Food partnering
- Flavours
- ABV will also help consumers to match a wine to
their taste or mood
In the early days of our wine drinking and youre
thinking, what would go with lamb?
If youre not too sure about how heavy or light
it is..
Not too heavy on the alcohol
I like a few words that describes its flavour..
I just need to know its not going to be too
strong or something really rich.
Source State of California/Mondavi Consumer
Qualitative Study 2004
77Decision triggers and attitudesThe steps to
choosing step5
5.
Other information
- THE MORE DISCERNING
- The back label information can be interesting,
but can be a deterrent if too elaborate or
prosaic - Heritage of producer
- Year
It was quite extreme, and it made me take it less
seriously
Source State of California/Mondavi Consumer
Qualitative Study 2004
78Label design needs to deliver taste reassurance
- The most important aspects of label design were a
description of how the wine tastes (mean score of
3.7) and information on grape varieties (mean
score of 3.5)
Source State of California/Mondavi Consumer
Quantitative Study 2004
79California drinkers are more reliant on
word-of-mouth recommendations
- California drinkers get more information about
wine through friend and family recommendations
than average, they are similar to the rest of the
sample in the other information sources that they
use
Source State of California/Mondavi Consumer
Quantitative Study 2004
80Cork is the closure of choice
- California drinkers are similar to the rest of
the sample in their attitude to closures, cork is
preferred by approximately 80 of those asked
Source State of California/Mondavi Consumer
Quantitative Study 2004
81Screw cap has low quality associations
- Cork was considered the preferred closure over
screw cap by 82 versus 18 - Both groups indicated that they thought their
preferred closure created a better seal, though
this reason was given more by those who preferred
screw caps. - Those who preferred screw cap did not hold high
quality associations for this type of closure
Source State of California/Mondavi Consumer
Quantitative Study 2004
82Section 2.1 Whats important when shopping for
wine consumer shelf stand-out
- Section 2 Whats important when shopping for
wine? - 2.1 - Consumer wine buying process
- Key purchase criteria
- Shelf Stand-out
- 2.2 - The role of wine
- Occasions
- 2.3 - Trade perceptions
- Key selection criteria
83Key purchase criteriaShelf stand-out behaviour
- Focus group respondents were asked to select one
wine that they would be most likely to buy for an
informal dinner at home, and the least likely. - This exercise provides valuable insights into the
basis upon which consumers make choosing and
buying decisions. - The following wines were offered in the
simulated shop
Red wines Mosa Vin de Pays dOc Cabernet
Sauvignon Domaine Boyar Reserve Cabernet
Sauvignon Hardys Stamp Shiraz Cabernet
Sauvignon Penfolds Koonunga Hill Shiraz
Cabernet Kumala Shiraz Ruby Cabernet Goiya Ruby
Cabernet Pinotage EJ Gallo Cabernet
Sauvignon Tesco Californian Cabernet
Sauvignon Blossom Hill Cabernet
Sauvignon Woodbridge Merlot 35 South Cabernet
Sauvignon Casillero del Diablo Cabernet Sauvignon
White wines Goiya Colombard Chardonnay Barramundi
Semillon Chardonnay Lindemans Cawarra
Chardonnay EJ Gallo Chardonnay Tesco Californian
Chardonnay Blossom Hill Chardonnay Woodbridge
Chardonnay Villa Maria Chardonnay Casillero Del
Diablo Chardonnay Herrick Vin de Pays dOc
Chardonnay Sainsburys Cuvee Prestige
Chardonnay Antonopoulos Chardonnay
Source State of California/Mondavi Consumer
Quantitative Study 2004
84Simulated shop white wines Focus group choices
- Most referenced wines in bold
Source State of California/Mondavi Consumer
Quantitative Study 2004
85Simulated shop red winesFocus group choices
- Most referenced wines in bold
Source State of California/Mondavi Consumer
Quantitative Study 2004
86Simulated shop wines Familiarity and trust
drive choice
- MOST LIKELY TO BUY
- Blossom Hill Chardonnay
- A brand that I know, you see them on the TV
commercials. - Im just completely familiar with it and trust
it. - Its always good for everyone.
- Its a wine that I drink.
- E J Gallo Chardonnay
- I just want to go with something that I know
everyone likesthey recognise it, and thats
important. - Because I know it and I like it.
- Ive had it before and I like it, I like the
bottle, I like the shape of it. - EJ Gallo Cabernet Sauvignon
- I always drink it
- Very easy drinking.
Source State of California/Mondavi Consumer
Qualitative Study 2004
87Simulated shop wines Names labels can be key
rejection triggers with unfamiliar wines
- LEAST LIKELY TO BUY
- Goiya Colombard Chardonnay
- Sounds a bit odd a bit cheap.
- I just didnt like the labelsa bit cheap.
- Goiya Ruby Cabernet Pinotage
- Just not very exciting.
- Its a bit plain and its quite tacky.
Source State of California/Mondavi Consumer
Quantitative Study 2004
88Section 2.2 Whats important when shopping for
wine role of wine
- Section 2 Whats important when shopping for
wine? - 2.1 - Consumer wine buying process
- Key purchase criteria
- Shelf Stand-out
- 2.2 - The role of wine
- Occasions
- 2.3 - Trade perceptions
- Key selection criteria
89The role of wine wine is very much a part of
everyday life
- Consumed nearly every day at home
- relaxing at the end of the day, before dinner
- or with dinner
- ..as well as socially with friends/family
- For restaurant consumption, but not as often in
pubs, where beer (for men) is predominant
No way are we alcoholics but theres always cold
wine in the fridge if you want a glass
Its a sign of the end of the day
Source State of California/Mondavi Consumer
Qualitative Study 2004
90Wine is a source of enjoyment, with varying
levels of involvement
- Most of the respondents felt they were on the
know little about it side of the balance (59)
rather than the know a good deal about it side
(35)
Source State of California/Mondavi Consumer
Quantitative Study 2004
91Role of wine in life
- Experienced consumers suggest that they started
drinking wine 15-20 years ago - and are still learning.
- Many drank wine as students to get drunk,
buying largely on low price - but all consumer types become more discerning as
they get older, drinking on a regular basis, but
less quantity and more quality - Most have now reached a comfortable level of
knowledge about what they like
Probably when you are 18 you drink it just to try
and get drunk and then as you get older and more
mature your taste buds change and you start
drinking nicer wines rather than 1.99 bottles
Im starting to get more of an appreciation for
older wines now after a while you start finding
your palette and what suits you best
Source State of California/Mondavi Consumer
Quantitative Study 2004
92Section 2. Whats important when shopping for
wine role of wine occasions
- Section 2 Whats important when shopping for
wine? - 2.1 - Consumer wine buying process
- Key purchase criteria
- Shelf Stand-out
- 2.2 - The role of wine
- Occasions
- 2.3 - Trade perceptions
- Key selection criteria
93Wine is drunk at most social occasions
- Wine is an integral part of social activity and
is consumed at most social occasions as well as
at home - Wine is less likely to be consumed in a pub or
bar where other alcoholic drinks may take
priority - The USA loyalist appears to be less social they
are less likely to drink wine in a pub or bar,
restaurant or in a friends home - The trialist however, is more likely to drink
wine on all occasions suggesting a more
sociable, adventurous consumer
Source Wine Intelligence Wine Institute of
California Research Project 2004
94California wines are associated with everyday,
but not special occasions
- The respondents felt that the most appropriate
occasions for Californian wine were when at home
relaxing (73), with meals (66), and at casual
gatherings with friends (57) - The respondents felt that the least appropriate
occasions for Californian wine were for special
occasions (43 indicated that they would not feel
that Californian wine was appropriate for this)
and for gift giving (33 rejected Californian
wine for this) - This indicates California is perceived not to
offer serious wines for more formal occasions,
but is strongly associated with everyday drinking
Source State of California/Mondavi Consumer
Quantitative Study 2004
95..however, those loyal to California wine do
associate special occasions
- Those who rate California within their top 3
regions strongly associate California wine as
most suitable for everyday drinking, however they
are more likely than the sample to consider gift
giving special occasions as suitable for the
wines - Some California drinkers do feel that the wines
are unsuitable for gift giving and special
occasions however this is on at a lower level
than the sample
Source State of California/Mondavi Consumer
Quantitative Study 2004
96Key purchase criteriaBehaviour according to
occasion
- Paired/one to one interview respondents were
asked to select one wine that they would be most
likely to buy for each of their chosen key
consumption occasions. - The following wine bottles (75cl) were offered,
with individual prices clearly stated for
off-trade occasions
Wines to drink at off-trade occasions
Source State of California/Mondavi Consumer
Quantitative Study 2004
97Key purchase criteriaBehaviour according to
occasion
Restaurant wine menu for on-trade occasions
Red
White
98Consumption occasion choices reasons casual
dinner friends/family
- CHOSEN WINES
- Wolf Blass Chardonnay
- Chateau Laroque
- Woodbridge Chardonnay
- EJ Gallo Turning Leaf, Zinfandel
- Penfolds
- WHAT THEY ARE LOOKING FOR
- Often more than they would spend at home for
personal consumption - Needs to taste and look good quality (on the
label) - To impress discerning friends something quite
individual looking More showy off if the
dinner is more formal, or if friends are more
sophisticated - Risk reduction strategies Involve the use of
grape variety and country of origin - But for the less discerning, they still need to
play safe on grape/brand if not sure what their
friends like previously tasted - Essential to provide a selection (red and white)
regardless of food choice
I do believe youve got to give people
choices (Depth, Male)
I would go for New Zealand or California (Depth,
Male)
Theres an element of trying to impress, or
treat people to something they are not
necessarily familiar with
Source State of California/Mondavi Consumer
Qualitative Study 2004
99Consumption occasion choices reasons Relaxing
at home without food
- CHOSEN WINES
- Penfolds
- Via Herminia Rioja
- EJ Gallo Turning Leaf
- Woodbridge Chardonnay
- WHAT THEY ARE LOOKING FOR
- Easy drinking, reliable, and familiar
- Not too expensive, good value, e.g. 5-6. maybe
more for a treat
Good, solid, reliable, quality, quite
affordable. Its the sort of thing Id drink
every day of the week quite happily.
(Penfolds) (Depth, Male)
Source State of California/Mondavi Consumer
Qualitative Study 2004
100Consumption occasion choices reasons Casual
dining - restaurant
- CHOSEN WINES
- Philippe de Rothschild Chardonnay
- Pinot Grigio
- Chablis
- Woodbridge Merlot
- Penfolds Rawsons Retreat, Shiraz Cabernet
- WHAT THEY ARE LOOKING FOR
- Mid-range price not too cheap
- Trusted grape variety, often overriding country
due to matching with food, and sometimes brand - Familiarity, however, for some, something more
interesting than they would drink at home
representing an opportunity to experiment and
trial
I tend to go in the middle of the list because I
know the beginning of the list is going to be
cheapos, the end of the list is going to be
really expensive (Depth, Female)
I tend to look for the grape (Depth, Male)
Source State of California/Mondavi Consumer
Qualitative Study 2004
101Consumption occasion choices reasons Formal
dinner at restaurant
Id choose if (Cheateau Roques) because its sort
of showy-off wine. Thats a dreadful thing to
say, but for a formal dinner party (Depth,
Female)
- CHOSEN WINES
- Chablis
- Wolf Blass Chardonnay
- EJ Gallo Turning Leaf Zinfandel
- Chateau Roques
- WHAT THEY ARE LOOKING FOR
- Good, reliable quality need safety if
presenting at a formal occasion - Essential to have a nicely presented bottle/label
- Largest influencing factor other guests at the
dinner party - Higher tendency to spend more, but not up to
18/bottle (75cl) usually 8 - 10 per bottle
(75cl) - Essential to have at least one red and one white
option
You need a safe one for a dinner party if you
dont necessarily know what people like (Depth,
Male)
I think I need to take something that looks a bit
better, silly isnt it (Depth, Male)
If I were with clients I might think that I felt
obliged, rather stupidly, to spend more (Depth,
Female)
Source State of California/Mondavi Consumer
Qualitative Study 2004
102Consumption occasion choices reasons outdoor
events
- CHOSEN WINES
- Penfolds
- Woodbridge Chardonnay
- Villa Maria Sauvignon Blanc
- EJ Gallo Turning Leaf Zinfandel
- Chablis
- WHAT THEY ARE LOOKING FOR
- A risk reducing wine that is reliable grape or
brand, e.g. Chablis - White wine dominance
- Light, fruity, fresh
- Not too expensive, e.g. 5-7
Source State of California/Mondavi Consumer
Qualitative Study 2004
103Section 2.3 Whats important when shopping for
wine trade perceptions
- Section 2 Whats important when shopping for
wine? - 2.1 - Consumer wine buying process
- Key purchase criteria
- Shelf Stand-out
- 2.2 - The role of wine
- Occasions
- 2.3 - Trade perceptions
- Key selection criteria
104The consumer does not see California on the
shelves
- Wine Intelligence conducted a mini-survey of
multiple grocer shelves which revealed the
California share of facings is under-represented
on several key measures - California offers very few brands to the
consumer - Calif. White 4 x Gallo Blossom Hill, Fetzer, 2
x own-brand - Calif. Red 3 x Gallo Blossom Hill Fetzer, 2 x
own-brand, 2 others - Both Italy and South Africa have more facings and
brands - For example, Italy White Approximately 20
facings on each of 5 shelves - Signage for California is The Americas
- Out-of-stock facings seemed more pronounced for
California than the other country categories
spot-checked - Of the total of 40 facings allocated to
California White, 9 had no bottles (75cl) - NB There are 2 Sainsbury's own-brand offerings
on all 4 categories sampled - California W R Australia W R
Source Wine Intelligence Multiple Grocer
Analysis - Sainsbury's Richmond July 2004
105Comparative fixtures - California and Australia
White
13
11
9
7
23
20
20
34
27
Source Wine Intelligence Multiple Grocer
Analysis - Sainsbury's Richmond July 2004
106Comparative fixtures - California and Australia
Red
23
14
13
7
33
29
26
22
18
Source Wine Intelligence Multiple Grocer
Analysis - Sainsbury's Richmond July 2004
107Flow of presentation Section 3
- Section 1 where are we now?
- 1.1 - Market overview
- 1.2 - Channels to market
- Section 2 whats important when shopping for
wine? - 2.1 - Consumer wine buying process
- 2.2 - The role of wine
- 2.3 - Trade perceptions
- Section 3 who is drinking California wine?
- 3.1 Profile segmentation
- 3.2 - Behavioural attitudinal analysis
- Section 4 perceptions of California wine
- 4.1 - Consumer perceptions
- 4.2 - Trade perceptions
108Section 3 who is drinking California wine -
profile
- Section 3 who is drinking California wine?
- 3.1 Profile segmentation
- Label leds
- Boutique buyer
- 3.2 - Behavioural attitudinal analysis
- Purchase behaviour
- Consumption behaviour
109Polarised consumer segments exist for California
- A dichotomy of consumers appears to exist for
California
Label led
A large group of less wine involved, brand
driven, low spend consumers
82 of sample
Boutique buyer
A smaller group of enthusiasts who are older,
spend more and who are prepared to hunt to find
their wines of choice
18 of sample
110Section 3 who is drinking California wine -
profile
- Section 3 who is drinking California wine?
- 3.1 Profile segmentation
- Label leds
- Boutique buyer
- 3.2 - Behavioural attitudinal analysis
- Purchase behaviour
- Consumption behaviour
111Summary Profile for Label Leds
- Young (below 40) and female
- Low spend typically purchasing wine at around
5 - Do not know much about wine (enjoy wine and know
little about it) - To get information from what friends/family
recommend and info on the bottle itself - Like to experiment at the 5-6 price point, but
will often seek familiar brands to minimise risk
of mistakes - Not to be high income people (10,000 - 40,000)
nor very well educated (GCSE equivalent) - Not to buy wine from the internet or
cross-channel trips - Not to indicate France, Argentina/Chile, Italy or
Spain as top-3 region
Source State of California/Mondavi Consumer
Quantitative Consumer Qualitative Study 2004
112Summary Profile for Label Leds
- They will not store vast quantities of wine at
home. They will tend to have up to 6 bottles
(75cl) at one time in their wine rack, and will
make frequent trips to the supermarket or wine
merchant to stock up for a few days - California as a country driving choice is
irrelevant they enjoy Blossom Hill, and
purchase it because of its safe, easy drinking
brand values - They like Californian wine because it suits their
lifestyle, desirable, prestigious, exciting
and/or traditional
Im quite happy to spend 2 on a wine if
somebody says its nice
I would say we know what we like. Im definitely
not a connoisseur on wine. I just know what we
like and we like a glass of wine its nice to
unwind.
Source State of California/Mondavi Consumer
Quantitative Consumer Qualitative Study 2004
113Label led tend to be less wine involved
- California drinkers tend to be less knowledgeable
about wine than the sample as a whole - This is consistent with a more brand driven
consumer who is less concerned with country of
origin
Source State of California/Mondavi Consumer
Quantitative Study 2004
114Label led is more likely to be female
- USA loyalists are more likely to be female
Source Wine Intelligence Wine Institute of
California Research Project 2004
115Label led is younger
- California drinkers (those who rate California as
one of their top 3 regions) tend to be under 40 - Compared to the sample average, they are most
likely to be 18-24 or 30-39 and least likely to
be 40-60 - They are also slightly more likely to be female
than average, 54 were female as opposed to a
sample average of 48
Source State of California/Mondavi Consumer
Quantitative Study 2004
116Label led earns less
- California drinkers tend to be lower income
drinkers (10,000-40,000) and are most likely to
be earning between 30,000 and 40,000 (The
average wage in the UK is approx 24,000)
Source State of California/Mondavi Consumer
Quantitative Study 2004
117Label led is less educated
- Compared to the whole sample California drinkers
tend not to be educated at University - Although a slightly higher proportion of them
than average have doctorates - The greatest difference between the California
drinkers and the whole sample is the higher
proportion of them who are educated to GCSE level
only
Source State of California/Mondavi Consumer
Quantitative Study 2004
118Label led is more likely to be in the brand-led
segment
- Analysing the elements that are considered
important when shopping for wine, four segments
emerge, their preferences are illustrated in the
chart below - People who indicated that California was one of
their top 3 regions were most likely to be in the
price/design/description segment indicating a
more brand led consumer, or in the
environmental/charity segment - California is not attracting the consumer who is
more wine involved and concerned with wine origin
- Other source countries with a stronger generic
pull may command stronger category growth
Source State of California/Mondavi Consumer
Quantitative Study 2004
119Section 3 who is drinking California wine -
segmentation
- Section 3 who is drinking California wine?
- 3.1 Profile segmentation
- Label leds
- Boutique buyer
- 3.2 - Behavioural attitudinal analysis
- Purchase behaviour
- Consumption behaviour
120Summary Profile for Boutique buyers
- They adore their wine and enjoy researching,
browsing and experimenting - They display considerable knowledge about wine
and are articulate when discussing it - Will happily spend 15 on a good bottle (75cl)
of wine on a regular basis - Tend to believe that wine for under 5 is of poor
quality - Typically male, 35
- Purchase triggers are less about brand and more
about regions and grape varieties - They are well travelled and will have often
visited vineyards on holidays and purchased wine - They often buy their favourite wines by the case,
but will also visit their wine merchant on an ad
hoc basis to buy and experiment with single
bottles (75cl) - They are prepared to seek out good Californian
wines from specialist merchants
We go through phases at the moment its New
Zealand sauv