The document discusses the importance of branding in the global wine industry. It provides statistics on wine production and consumption worldwide and in key countries. Branding is important because wine is a competitive global industry and consumption is concentrated in countries with strong consumer markets. The document outlines the key elements involved in winemaking and production. It explains how branding helps create perceptions of quality, awareness, associations and loyalty for wine brands. Strong branding distinguishes wine and creates emotional connections with consumers.

1. Wine Branding’s Magic
Ingredients
Nick Ursini
American Marketing Association
July 21, 2016

2. Why is Wine Branding Important
Production
• 68 nations have 18 million acres of wine grapes – close to the
size of South Carolina
• Top 10 nations by acreage account for 68%
• Spain, China, France, Italy, Turkey, USA, Argentina, Chile, Iran, Portugal
• 7.4 billion gallons of wine world wide – 294 million (750 ml) bottles
• Top 10 nations by gallons account for 81%
• France, Italy, Spain, USA, Argentina, Australia, South Africa, China, Chile,
Germany
• California Produces 85% of USA wine -- # 4 in world
• 10,417 USA wineries – 4,285 (41%) in California
Wine is a competitive industry
2014 acreage data from TDA and United Nations Food & Agriculture Organization
2014 production data from Trade Data and Analysis (TDA)
California data from U.S. Tax and Trade Bureau and the Wine Institute, July 20 2015

3. Why is Wine Branding Important
Consumption
• 186 nations consume wine
• Top 10 nations by consumption account for 67%
• USA, France, Italy, Germany, China, UK, Spain, Argentina, Russia,
Australia
• 4.4 billion gallons – 172 million (750 ml) bottles
• Consumption is growing fastest in 4 of the top 10
• Australia -- 19% (displacing beer)
• UK -- 13% (Italian Prosecco & Spanish Cava)
• Spain –10% (shift to lower price points)
• USA – 3% (Millennials)
• Consumption dropped 1% to 10% in other top 10 nations
Top nations have strong
consumer markets making brand
management a success factor
2014 consumption data from Trade Data and Analysis (TDA)

4. Why is Wine Branding Important
California Dreaming
0
2000
4000
6000
8000
10000
12000
1980 1985 1995 2005 2015
California
USA
Total
Source: U.S. Tax and Trade Bureau and the Wine Institute, July 20 2015

5. Why is Wine Branding Important
Wine Fundamentals
Success in the Wine Industry requires competencies in
four distinct occupations
1. Land selection – elevation, soil, rain, sun exposure,
temperature, appellation
2. Viticulture -- the science, production, and study of
grapes -- events that occur in the vineyard
3. Chemical processing -- harvesting, crushing & pressing,
alcoholic and malolactic fermentation, clarification,
cooperage, aging, and bottling.
4. Consumer marketing skills – Think like P&G
Quality is a function of the winemaker’s
skills in all areas -- specialists are often
hired. Production volume, quality, and
price points are the critical outcomes

6. Why is Wine Branding Important
18 Noble red and white grapes define the complete range of wine flavors
deep, dark red wine to clear, zesty white wine.
Grenache
Pinot
Noir
Merlot
MalbecSangiovese Tempranillo Syrah
Cabernet
Sauvignon
Semillon Viognier
Riesling
Sauvignon
Blanc
Chenin
Blanc
Moscato
Chardonnay
Gewurztraminer
Noble grapes are also called International Varieties -- grape varieties that are widely planted
in most major wine regions and have widespread market appeal.

7. Why is Wine Branding Important
The 100 most valuable brands in the
world are worth $3.3 trillion
Wine starts as a creation, a piece of art, and a gift that can become a brand
A Brief History of Branding
 Ancient Egyptian brick makers used symbols to mark their
products
 Medieval European trade guilds created “trademarks” for
legal protection and to signify quality
 18th Century producers used pictures to strengthen
associations with a name
 19th Century whiskey producers used perceived
associations to create a sense of value – Old
Smuggler Scotch in 1835 took advantage of the
smuggler’s reputation for being better

8. Why is Wine Branding Important
 Brands capture what we want the consumer to remember
 Brands help manage customer perceptions
 Innovative products and designs create relationships with
consumers and market channels
 People do not “buy” products they buy “trust”
 Smell & flavor excite the taste buds
 Label design is unique and attractive
 Bottle is thick and a unique shape for the wine varietal
 Cork is firm, clean, and meets perceptions of quality
 The name conveys a sense of ownership and uniqueness
 The brand is a reflection of individual self worth
People buy Dom Perignon to show off – they could
buy another Champagne that is just as good
or even better for a lower price –
Source: Tim Atkin MW, U.K. Wine Critic
This is Brand Power!

9. Why is Wine Branding Important
 A brand is a collection of ideas that the consumer consistently
associates with your product
 The consumer recognizes the brand through sensory signals
 Winery and winemaker’s name
 Logo design
 Label design and consistency
 Packaging – bottles and cartons
 Product quality and reputation – publicized points count
 Advertising and promotions
 Services such as websites, direct shipping, wine clubs,
social media and more

10. Why is Wine Branding Important
Critical Brand Equity Elements P. 1
 Perceptions of Quality
 Reason to buy
 Helps differentiate and position
 Superior value
 Price premium expectations
 Awareness
 Familiarity and liking
 Anchors for associations
 Driven by purchase and use
 Signals substance and commitment

11. Why is Wine Branding Important
Critical Brand Equity Elements P. 2
 Associations
 Helps retrieve information (recall)
 Creates positive feelings and attitudes
 A reason to buy
 Supports differentiation and positioning
 Brand Loyalty
 Lowers marketing cost
 Provides leverage with the trade
 Supports new customer acquisition
 Increases customer’s perceived switching
cost

12. Why is Wine Branding Important
Create a mental image
to connect with
consumers on an
emotional level

13. Why is Wine Branding Important
Rich Parducci owns McNab Ridge Winery
In Mendocino, California, north of Sonoma
 Mendocino land prices
 Operating expenses
 Proximity to Pacific Ocean
Nichelini is one of the oldest Napa
Wineries started in 1890
 Made wine for local miners
 No distributor relationships
 Special etched large format bottle
no longer produced (collectors)
Build Relationships

14. Why is Wine Branding Important
Movie Bottle Shock dramatized the May 24, 1976
French wine tasting that changed the Industry
Rank Wine Vintage Origin
1 Chateau Montelena 1973 USA
2 Meursault Charmes
Roulot
1973 France
3 Chalone Vineyard 1974 USA
4 Spring Mountain
Vineyard
1973 USA
5 Beaune Cos des
Mouches Joseph
Drouhin
1973 France
6 Freemark Abbey
Winery
1972 USA
7 Batard-Montrachet
Ramonet-Prudhon
1973 France
8 Puligny-Montrachet
Les Pucelles Domain
Leflaive
1972 France
9 Veedercrest
Vineyards
1972 USA
10 David Bruce Winery 1973 USA
California Chardonnay vs.
French Burgundy Chardonnay
Owner of Chateau Montelena sent
skids of the wine to a landfill
 Brown color from reductionist
techniques (low oxygen)
 Retrieved & color changed
 Won French Blind Wine tasting

15. Why is Wine Branding Important
Movie Bottle Shock dramatized the May 24, 1976
French wine tasting that changed the Industry
Rank Wine Vintage Origin
1 Stag's Leap Wine
Cellars
1973 USA
2 Chateau Mouton-
Rothschild
1970 France
3 Chateau Montrose 1970 France
4 Chateau Haut-Brion 1970 France
5 Ridge Vineyards
Monte Bello
1971 USA
6 Chateau Leoville Las
Cases
1971 France
7 Heitz Wine Cellars
Martha’s Vineyard
1970 USA
8 Clos Du Val Winery 1972 USA
9 Mayacamas
Vineyards
1971 USA
10 Freemark Abbey
Winery
1969 USA
California Cabernet Sauvignon
vs. French Bordeaux
(called Claret in Britain)
 French had decades of experience
 California producers had a few years
 1972 was Clos Du Val's first vintage
yet performed better than the French

16. Why is Wine Branding Important Results
from the 30th Anniversary in 2006
Rank Wine Vintage Origin
1 Ridge Vineyards
Monte Bello
1971 USA
2 Stags Leap Wine
Cellars
1973 USA
3 Tie Mayacamas Vineyards 1971 USA
4 Tie Heitz Wine Cellars
Martha’s Vineyard
1970 USA
5 Clos du Val Winery 1972 USA
6 Chateau Mouton-
Rothschild
1970 France
7 Chateau Montrose 1970 France
8 Chateau Haut-Brion 1970 France
9 Chateau Leoville Las
Cases
1971 France
10 Freemark Abbey
Winery
1969 USA
California Cabernet Sauvignon
vs. French Bordeaux
(called Claret in Britain)
Rankings & Ratings
drive market
perceptions

17. Why is Wine Branding Important Creating
Brand Magic in the Wine Industry
Create a unique attribute of the winery
 Features such as winery history, size, varietal, vineyard
geography, special harvest (e.g., ice wines)
 Benefits such as low tannins, alcohol %, avoiding
headaches, fortified dessert wines
 Application such as food pairings, seasonal treat
 Target market segments such as baby boomers, millennials,
alternative live styles, corporate or special events
 Category Leadership such as grape varietal,
environmentalist, organic farming, special processing
 Winemaker’s unique varietal blending
 Focus on wine tasting awards, but not quality comparisons
 Focus on Brand marks such as label design, unique
bottle shapes, glass thickness, cork
size–material-logo

18. Why is Wine Branding Important Creating
Brand Magic in the Wine Industry
Create an intimate knowledge of the target market
 Restaurant patrons
 retail consumers
 Relations with trade members’ strategy aligned with the
winery
 Reach over distributors and retailers shoulders to create
relationship with targeted consumers
 Tasting room design and management
 Participate in local wine events
 Hold private wine tastings and wine pairing dinners
 Create wine clubs offering special selections, special
pricing, travel programs, winery entertainment