The trials of building a model to explain the influence of brands on consumer behaviour in the global wine category
Building a successful international wine brand is notoriously difficult. A brand manager approaching this task must first overcome the large and fragmented nature of the global wine market and the inherent complexities of wine production itself (the wide span of grape varietials, styles and not to mention vintage variations). Margins on wine are typically a lot thinner than in other consumer goods categories, so there’s less marketing budget to put towards building awareness and positive perceptions compared to, say, soft drinks, spirits or beer. And then there is the inherent snobbishness of the wine category: if a wine is a ‘brand’, it automatically becomes a problematic product for some people within the supply chain.
Over the past 15 years, the team here at Wine Intelligence has closely monitored the performance of a number of wine brands across the 32 markets that we cover in terms of wine consumer usage and attitude. While the environment remains tough for brand growth within wine, we have witnessed a number of transformational success stories: brands that didn’t exist 20 years ago have become world leaders, and older brands that have done well at a national level have managed to internationalise. To mark the company’s 15th anniversary, Wine Intelligence has published The Global Wine Brand Power Index report. This reveals the most powerful 15 wine brands in each of 15 key wine markets, but also the top 15 global wine power brands – all based on consumer feedback.
The Global Wine Brand Power Index is the result of on an algorithm developed by Wine Intelligence using data from our wholly-owned Vinitrac® surveys of roughly 16,000 respondents in 2017, which is representative of approximately 380 million wine drinkers in 15 key wine markets. As well as measuring the consumer’s consumption behaviour and attitude towards wine, Wine Intelligence Vinitrac® surveys also determine the health of a brand by asking respondents the following questions:
Which brands they have heard of from a list of 40 to 60 brands (we tailor each brand list for each market)
Which they have purchased in the past 3 months
Which they would consider purchasing
Which they feel an affinity towards
Which they would be likely to recommend to a friend.
Based on our understanding and past knowledge of what makes a power brand, the theory of which we look into in this report, we combined these measures to create an algorithm that revealed the top 15 wine brands for 15 key wine markets.
To create a global index, we combined the results from the 15 markets; however, since the size of those markets vary considerably, we’ve had to weight the index based on the number of wine drinkers of each market in order to give a fair representation (see more about why this is important in analysing data here). For example, while the US data represents 95 million regular wine drinkers, Ireland represents a much smaller population of 2 million regular wine drinkers.
Even with this taken into consideration, the results show that US wine brands dominate the global wine brand power with 40% of the most powerful wine brands in the world, due to the size of the US population and their preference for domestic wines. Other countries of origin that perform well with their wine brands are Australia and Chile. Australia has 3 of the top 15 global wine power brands whilst producing 5% of the worlds wine (OIV) and Chile produces 4% of the worlds wine (OIV) yet has 4 out of the 15 most powerful wine brands in the world.
The brand that takes first place in the global wine brand power index is Yellow Tail. A relative newcomer, Yellow Tail leads in terms of global brand power due to its success in the USA and also a range of other key markets including Australia, Canada, China, Ireland, Japan, South Korea and the UK.
So why is branding so important?
Today, the average wine consumer at a supermarket or in a wine shop is faced with lots of brand options, and therefore it is very rare to find a consumer who is 100% loyal to one wine brand – a finding which also holds for consumer products generally. Throughout a year they tend to have a large wine brand repertoire – one wine brand buyer is also likely to be buying the competitor brand. The ultimate aim of a power brand is to be the most purchased wine brand and the key to achieving this is to be in as many consumers’ brand repertoires as possible.
To be in as many consumers’ brand repertoires as possible, it is fundamental to drive awareness among category users. Having a low awareness in a wine market means that you are more likely to be limited to the heavy category users, or those who drink wine on a very regular basis. The issue with heavy category users is that because they tend to be more knowledgeable, they tend to buy a wider variety of brands. Sticking with one or two brands is not their forte. In addition, because they are knowledgeable they tend to have adventurous tastes, always looking for new brands to try.
Therefore, if the aim is to grow a brand the best method is to focus on light category users – those who drink wine less frequently. These consumers make up a larger proportion of wine drinkers compared to heavy category users and because they only drink occasionally, they do not know or buy many brands. As a result of their limited brand repertoire, they tend to show a bit more loyalty just because they have fewer brands to choose from. They are difficult to reach, but growth depends on acquiring them.
After achieving a wide distribution, building brand awareness and recognition is the key first step in growing business for your wine brand. It is important to be aware of these top 15 brands in order to learn from their successes and think about how you can apply strategy to your own brand. You can learn more about our Global Wine Brand Power Index in our report that was published on March 1st 2018.