Tag Archives: Craft Spirits

Is Wine Losing its Prestige Image?

While I was at Unified two weeks ago, during the State of the Industry talk, Jon Fredrickson of Gomberg, Frederickson, and Associates was giving his Wine Market Update.  I wrote down one sentence that didn’t really strike a chord with me until I was typing up all my notes from the sessions I had attended, earlier last week.  There, buried as the fifth and last bullet point under the justifications as to why wine is dropping placements on- premise was this sentence…

  • Wine is losing its prestige image.

As I retyped this sentence into my document, the MW student side of my brain took over.  This would be a great Contemporary Issues question for the MW theory exam when changed to this…

  • Wine is losing its prestige image. Discuss.

Now obviously this is not a question since there is no question mark.  That is the tricky thing about MW exam questions. There is often what I like to call “hidden questions”.  Questions within questions and unless one can figure out how many questions you are REALLY answering one does not have a chance at passing.  There are three hidden questions in the statement above.

  1. What is a Prestige Image?
  2. Does wine have a Prestige Image?
  3. Is wine losing whatever Prestige Image it does have?

One could also add a fourth question to answer as well.  4) Is this a bad thing for the wine industry?  The general opinion I gathered is that Frederickson seemed to think it was.  Now customers going to restaurants and bars have other options to choose from such as craft beers and spirits.  Wine listings by the bottle are down 16% year over year and by the glass options are down 12% according to research done by Charles Gill of Winemetrics in Fairfield, CT. However, later in his talk Frederikson eludes that the decline seems to be focused on the low end of the market (wines below $9.00) and that above that, the premium category is still growing.

Which brings me back to the questions above.

  1. What is a Prestige Image?

There are two definitions that one must consider here both from Webster’s Dictionary.

Prestige = Widespread respect and admiration felt for someone or something on the basis of a perception of their achievements or quality.

Image = a representation of the external form of a person or thing.

Therefore it is safe to conclude that a Prestige Image is defined as widespread respect and admiration felt for a representation of something on the basis of a perception of their achievements or quality

        2. Does wine have a Prestige Image?

Among wine industry folks I would have to say that it does.  However, we are not the majority of the population that we would like to think that we are.  Again, according to Frederikson’s talk 40% of the population of the US doesn’t drink any alcohol, at all.  I would venture a guess that among the 60% that ARE drinkers the predominant drink of choice is likely to be beer or spirits just based on the cultural significance of these beverages which is greater in the US than the cultural significance of wine.  Now there is plenty of evidence that wine DOES have a prestige image in our culture if one looks at wine’s placement in movies, television, and books.  In these Medias, it is generally highlighted as the drink of choice for the influential and wealthy. In turn, this makes it an aspirational drink for those who may not live the lives that are highlighted in these vignettes.  It turns wine into the drink for special occasions and celebrations rather than the everyday luxury that wine marketers would love.

3.  Is wine losing whatever Prestige Image it does have?

Wait? Isn’t this what marketers have been wanting for years?  For customers to become more comfortable choosing wine off of a wine list for their casual date night or to bring home for dinner with friends.  The picnic wines or wines at the beach meant for wide accessibility with creative packaging that are meant to compete against beer and wine coolers.  Now we are surprised when craft beers and ciders have decided to use the wine model but position themselves at a more budget friendly price point?  The very fact that sales of wines above $9.00 continue to grow is evidence that wine is NOT losing the prestige image that it holds in the minds of consumers.  The issue is that craft beers and ciders have been able to also don the cloak of a prestige image and have ended up being far more accessible to the everyday consumer.  Budweiser even took aim at this philosophy during their Super Bowl commercial recently (See it Here if you missed it) trying to distance themselves from the craft beer movement by positioning craft beers in a “snobbish” light.  Paste Magazine breaks down this ad in spectacular fashion here if you are interested including pointing out that AB-Inbev actually owns craft breweries.

Awkward…

Anyway, the underlying issue is not that wine in general is losing a prestige image.  It is that wines sub $9.00 are losing market share by customers are turning to other beverages in the same price points that are perceived as slightly more prestigious.

     4.  Is this a bad thing for the wine industry?

Not really.

For makers and marketers of wines above $9.00/ 750mL, congratulations!  According to Charles Caleb Colton , imitation is the sincerest form of flattery so continue doing what you’re doing but just be aware that other beverages are starting to imitate your “terroir” focused marketing and authentic story by highlighting the people behind the “craft” so to speak.  Don’t get comfortable.  It’s only a matter of time, particularly at the lower end of this price zone, before craft takes aim at you if it hasn’t already.

For makers and marketers of wines below $9.00/ 750mL, consider this your warning shot!  You can no longer think of your competitive set as wines only.  You are making a beverage.  You have consumers that consider if they should have a casual glass of wine, a craft beer, or a cocktail with dinner.  However, this shouldn’t be depressing.  It is an opportunity to embrace new technologies, innovative packaging, and a history of an industry that was the “Original craft beverage”.  So interlace your fingers, crack your knuckles, and get a nose to the creative grindstone.  This segment of the market just got a whole lot bigger so these brands are going to have to fight harder for attention.

This is just my two cents…  I would love to get other opinions on this!

  • Wine is losing its prestige image. Discuss…