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What’s next for premiumisation

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A New Zealand wine lover's wine blog.

 

What’s next for premiumisation

Elissa Jordan

Premiumisation has been around a while. It’s a buzzword in the drinks business made famous by Pernod Ricard. While it was originally attached primarily to spirits brands, the term and treatment continues to come up and has attached itself more recently to craft beers and artisanal wines.

Let’s start with what this doesn’t mean: premiumisation is not simply the marketing department slapping the word premium (or reserve, private selection or any other term that lacks a standard meaning) on the bottle. It also doesn’t mean pushing the price point up without first doing work on the packaging, brand associations and endorsements. The whole game needs to be lifted. There’s some well-defined criteria that goes into what makes up premiumisation: high quality ingredients; an environmentally friendly product; having an authentic product story; and small batch production.

When premiumisation entered the drinks vocabulary it looked at spirits that were dressed up in fancy bottles with celebrity endorsements. Now the same effect can be achieved by telling the brand’s story: how the drink is made, the philosophy behind it, what makes it stand out, what makes it special. From the business’s side of things they’re charging a premium for their wares while building brand loyalty. In return the consumer should be getting an exceptional product experience.

Who is the modern consumer

By all accounts, and something I’ve tested out with friends, the modern consumer wants a story. They’re a more educated breed, with a broader global outlook and so they want to better understanding how and where something is made. This not only changes the experience the consumer has with the drink, it makes it more likely they’ll shell out $21 for a glass of vino, when they would normally only spend $12. They are people who started (or will start) their families later in life, thus allowing for more disposable income. This group is drinking less and spending more.

What doesn’t work for this group is following blindly the recommendations of an expert, 90+ scores or even talk of the varietal characteristics that are expressed in the wine.

One of the problems we face is that producers, and especially marketing departments, have clocked this trend, where premium is a wine with a compelling backstory. The problem now becomes that the faith in the validity of these stories can be eroded as they become more crafted and less genuine. Also, when everyone has an interesting snippet to set them apart then what was once unique now becomes an expected sameness that loses its impact.

What’s next for premiumisation

So, what is next? Producers have embraced this new direction, but writers, critics and those in hospitality are still a step behind. The changes need to be seen in how we talk about wine.

Here’s what can be done to keep all the good things about premiumisation (improved taste and quality, use of local ingredients), while letting go of those extraneous bits (high prices, celebrity endorsements, marketing guff):

Create brand ambassadors: when Whittaker’s released their new artisan collection last month they got onto social media and let their legions of brand ambassadors spread the word for them. Ditto for Lewis Road Creamery chocolate milk (which used Whittaker’s chocolate). How do they do it? First they make a product that warrants such organic fervor. Secondly they had a story that focused on simple, quality ingredients.

Build trust by being selective: if you deal in wine, make every wine work for you. By hand selecting the wines with purpose you can offer an experience at a range of price points. You’re also able to build trust by basing your reputation on always offering reliable recommendations.

Try before you buy: start a dialogue, offer up promotions, deals or instore tastings that look to attract people seeking out new experiences rather than just focusing on price discounts. Provide them with choices, have a few bottles opened. Describing the fruits, florals or oak in a wine is never going to be as effective as giving a wee taste.

Change the way you talk: people who talk about wines need to talk differently. Move away from reviews and ratings, towards pairing with food, production, producers or regions. A conversation is far more interesting when you have more to say than 95/100. Tell the consumer not just that the wine is premium but rather what makes it premium.

It takes a village: there’s a trickle down effect. If you’re a producer, be selective about who you pick to distribute your product, the distributors can create brand ambassadors of the hospitality staff and retailers, they in turn will work to get customers to fall in love with your product. Anywhere in this distribution chain there’s a chance to pair up with other regional producers to share the cost and effort involved in getting people excited about your product.