2 August 2018 Within hours of publishing the article below on Purple Pages, I received a press release from UK importer Red Squirrel Wine announcing their creation of a new role, a 'head of engagement, creating a new wine education programme for our clients across the UK'. Today we republish the article free as it is clearly a topical issue.
30 July 2018 Christian Holthausen, export director of Champagne AR Lenoble (seen here on the left with Anne and Antoine Malassagne of AR Lenoble), writes about the fast-changing relationship between wine consumers and wine professionals.
After a successful maiden voyage organised and hosted by Nicole Sierra-Rolet and Xavier Rolet at their Chêne Bleu estate in the Vaucluse department of the Rhône Valley last year, the second edition of Fine Minds 4 Fine Wines (FM4FW) was held earlier this month in Champagne.
Last year I wrote Beyond Bling – whither fine wine?, an article inspired by FM4FW 2017, and I have spent the last couple of weeks after the conclusion of FM4FW 2018 thinking about where we are as a fine-wine community once again. Where do things stand one year on – and how much work still needs to be done by us in the wine business?
Several defining aspects of the early-twenty-first century Zeitgeist continue to affect many industries – and as far as the fine-wine community is concerned, it is clear that we are still grappling with many of the themes that were discussed last year in the southern Rhône. We are still struggling to define and communicate the concepts of transparency and authenticity. We still don't know if the end-consumer is actually more empowered – or just more self-expressive – than he or she used to be. We're still obsessed with figuring out how to have conversations with generations Y, Z and Alpha – and in the process, we're probably missing out on the conversations we should be having with the overwhelmingly large group of consumers currently over 50 years of age. (Lulie Halstead of Wine Intelligence says that 20% of the wine-drinking population in Germany is over 65 whereas 27% of the wine drinkers in the UK are over 65 and 50% of the wine drinkers in the US are over 55. Who is speaking to them?)
It's not about the how, it's about the why
But perhaps most of all, we're still trying to deal with the fact that the experience economy has eclipsed the agrarian, industrial and service economies that came before it. The transition to an 'experience economy' as first defined by Joseph Pine and James Gilmore during the last days of the twentieth century continues to flourish and intensify. One's 'memory' of the experience has become the product. Wineries are no longer selling wines. They're asking people to visit them – either in person or via a virtual space – and pay money for the opportunity to interact with the brand. Perhaps these people will purchase wines on the spot, perhaps they'll purchase wines when they get home. But the important objective is for the memories of these interactions to become embedded in their brains.
(Interestingly, one of the theories discussed at FM4FW this year was that Instagram's prominence as the social network of choice for food-, wine- and travel-lovers is due to the fact that it's a purely visual medium that requires users to pause for a second to capture the image they want to post. In this overstimulated world, stopping for just a couple of seconds to take that photo imprints the image, and by extension the memory, into our subconscious.)
Just last month, Samsung opened up a 1,200 sq m 'ecosystem' in the Champs-Elysées in Paris, one of the most expensive shopping streets in the world, so that each end-user can have the ultimate Samsung experience by interacting with everything from televisions and washing machines to ordering a coffee with Samsung Pay or putting on a helmet and leaping into a world of virtual reality. The space is not a store, and there is no stock of smartphones on hand to be purchased. Samsung says, 'The idea is not to sell, but to dive into our brand universe.' You might not need a smartphone now, but when you do, you'll remember how much fun you had learning to virtually snowboard on the Champs-Elysées and so order your next phone from Samsung.
The experience economy has also informed the lucrative business that has become customer-experience management. According to a McKinsey report published by Stephanie Lotz, Julian Raabe and Stefan Roggenhofer in March 2018, 'Even as technology and data from engagement channels provide companies with increased visibility into customer touchpoints, weaving all of this information together into a clear and coherent picture of the customer can be a formidable challenge.' The McKinsey team suggests that a big part of improving the customer experience is by listening to the customer-care department, cross-culturally and cross-functionally. According to McKinsey, 'No function handles a broader range of customer touchpoints than customer care. Executives would be wise to make it the centrepiece of any effort to transform the customer experience … as consumer expectations are rising across the board.'
But even the way consumers interact with customer care has changed. A friend recently told me that her upcoming Air France flight was cancelled and her email to the customer care department produced no results. Three hours later she used Twitter to complain publicly to @airfrance and was contacted by private message within 15 minutes and re-routed through Amsterdam. In the end, she was impressed, although one suspects Air France replied more quickly via the social-media platform out of the fear of being publicly shamed. With the exception of the largest multi-national groups, I think it's fair to say that we don't yet have such an omni-channel culture in the world of fine wine. Producers need to be listening – and they need to be listening all the time. One corked bottle could have repercussions that linger on social media for ages if one irate customer feels seriously let down by the producer or retailer.
Nobody can ignore unsolicited brand encounters anymore. Wineries and brands of all types are being seen and discussed everywhere. There is a potential here for consumers to get the wrong message about a product or service, especially as the prevalence of viral videos is only going to become more prevalent in the future.
The classical linear communication model of yore has been replaced by a model of various diverse touchpoints. The category of paid touchpoints used to be considered the most frequently used channel of media. But consumers now expect various multichannel, multi-device experiences from which to choose each time they want to interact with a brand.
With regard to the future of fine wine, one of the biggest debates within the professional wine community remains whether established opinion leaders are as relevant as they were a generation ago – and many people don't seem to think they are. Most members of Generation Y in western cultures don't really care HOW a wine is made. They want to know WHY it was made.
Wine tourism continues to develop at the speed of sound as winemakers have become more important than their wines. Who makes this wine? Who picks the grapes? How does the owner treat the people who work in the vineyards and in the cellars? You say you're environmentally sustainable? Show me how. You say you care about human rights? Prove it. You say you are changing your ways in the face of climate change? Let me shoot a 30-second film on my iPhone and share it with my friends and family. At FM4FW this year, Steven Spurrier paraphrased the title of Bob Poole's 2009 sales and marketing guide Listen First, Sell Later when he encouraged winemakers to 'Receive First, Sell Later'. If winemakers receive consumers with open arms and tell them their stories, sales will follow in due course, not even because of the wines – but because of the people behind the wines.
Wineries come to terms with this by insisting that they're simply educating the consumer. As a wine producer, we're supposed to educate you, to empower you, to make you a better person, and to help you find yourself. You'll fall in love with us – and then you'll buy our wines.
In terms of consumer behaviour, many individuals today are more concerned about the right wine for the right occasion. Which wine do I serve at my twentieth wedding anniversary? Which of these wines will make the best first impression when I meet my boyfriend's parents for the first time? Which wine will console me after getting sacked from my job? I've just moved to a new city so which wine lets me make a statement about ME in my new home? How does this wine make me FEEL? All of this is a radical point of departure from even 10 years ago.
On another note, several appellations that used to be strong brands have seen their power diminish exponentially. It's no longer about brand Champagne v brand Prosecco or brand Bordeaux v brand Napa but about individual producers. Consumers realise that there are good producers and bad producers everywhere. They prefer to make direct connections with individual wineries as opposed to certain regions which no longer resonate emotionally, or may even seem aloof. Much of this has been exacerbated by an increasing transformation from business-to-business (B2B) to business-to-consumer (B2C) in the global wine marketplace. As direct routes to market for consumers continue to evolve, wine regions and appellations are also going to have to modify the ways they reach out to the consumer.
Data, data and more data
Right now there is plenty of crowdsourced information out there from apps such as Vivino and CellarTracker but there needs to be accurate information out there too. 'Crowdsourced information on top of factual information is extremely powerful, according to David Gluzman (below right), co-founder of the recently launched Global Wine Database with Justin Howard-Sneyd MW (left). 'Global Wine Database captures information from wineries that is factual, scientific-based information about each wine, information that consumers cannot provide.
'Crowdsourced data for consumer-oriented ratings (Vivino) or for collecting (CellarTracker) absolutely has a place within the consumer information ecosystem. The popularity of those apps speak for themselves. Where Global Wine Database steps in is producer-led accurate production data about the factual information regarding a wine. Most consumers don't have access to this information as it's either not disclosed at all or it's locked up on the producer's website or in PDFs. Consumers, even highly engaged ones, shouldn't be expected to hunt down this information in order to make a purchase decision, it should just be presented along with the useful tools and ratings from the likes of Vivino and CellarTracker', said Gluzman. 'When you see a wine on a crowdsourced platform which is completely inaccurate (wrong varieties, wrong vintage, wrong wine colour or even wrong country of origin) it hurts every single player on the wine value chain. It is a bad experience for the consumer, who may make decisions based on faulty data, it's a bad experience for the producer, which may have its reputation negatively impacted and it's a bad experience for the app, which isn't at fault for providing the incorrect crowdsourced information. Ultimately that one initial consumer who entered in wrong information into an application, knowingly or unknowingly, could be impacting thousands of consumer purchase decisions. Global Wine Database wants consumers to have access to the correct technical information.'
I thoroughly enjoyed meeting David Gluzman and appreciate what he and Howard-Sneyd are trying to do. Today consumers think they have so much power, but regardless of the topic or the industry, crowdsourced information is full of errors. If you don't believe me, just look up on Trip Advisor the top 10 restaurants in Paris or, better yet, in your own home town.
Connecting with the consumer
Wineries have traditionally interacted with consumers in a prescribed way, through winery tours, winemaker dinners, in-store tastings and so on. But Stephen Yiu (below), managing partner and chief investment officer of Blue Whale Capital LLP, thinks that wineries are still not using social media channels effectively to share the stories people want to hear, stories about the people who make the wines, about the harvest conditions, about the great wine moments that most people dream about from their desk jobs around the world. Much of that sharing can be done in the virtual space.
In addition, some wineries are implementing crowdfunding schemes, not necessarily to increase capital but to increase direct, intense relationships with their end-consumers. 'With the exception of the most affluent consumers, most consumers do not have the privilege or the know-how to regularly interact with fine-wine producers', said Stephen Yiu. 'Crowdfunding allows consumers to connect with the winery, and feel like they're part of the journey.'
According to Yiu, the winery isn't even obligated to give said investor very much in the way of return. 'Most crowdfunding outside of wine is not about equity stakes but about the privilege to get a new product at a discount and/or before anyone else. The amount of money pledged determines the privileges one gets in return, for example $250 for a case of wine before it's released or $1,000 for an exclusive visit and special dinner at the winery in addition to the case of wine. The rationale is all about making the crowdfunders feel special and part of something outside of their typical lifestyles. In the context of wine tourism, they are more motivated to visit "their" winery to see it for themselves.'
New types of engagement make consumers feel like they are also part of the world of fine wine, a place most people perceive as being very exclusive. 'The traditional marketing and branding practices such as trade fairs, awards, and tastings cater to the status quo', said Yiu. 'The new generation expects a new form of engagement, not only one that they need to see and taste, but also one with which they can engage to feel that this is a personal experience, the ultimate experience of all.'
One of the ironies of FM4FW was that there was much discussion about a need for diversity in the world of fine wine, yet the vast majority of the participants were white and western, with slightly more men than women in attendance. It is clear that we're not having the conversations we need to be having if we're going to build bridges and establish new relationships in the future.
One of the most brilliant people at FM4FW was Professor Bev Skeggs (above), director of the Atlantic Fellows programme, International Inequalities Institute at the London School of Economics & Political Science. She talked about Distinction: A Social Critique of the Judgement of Taste by Pierre Bourdieu (published in 1979 in French as La Distinction, published in English in 1984) and his findings that cultural capital, the 'non-financial social assets' such as education, style of speech and dress, determines what constitutes taste within society – and generates barriers of exclusion through taste. 'He isn't great on gender', admitted Skeggs, 'so when I reworked his analysis through a gender lens I could see how class and gender were tightly entangled. Women's bodies for instance are always inscribed with markers of taste. I expected the exclusions to be both gendered and classed as I entered the world of fine wine. They clearly are in terms of employment of women in key positions, authority in the wine world and even consumption based on who decides which wine goes into which restaurants. But when I conducted a brief survey with our international Fellows on the Atlantic programme for Social and Economic Equity, I soon learned it was about class, gender AND race. That was a wake-up call as many of our international Fellows mentioned colonial histories when all I had asked them was what fine wine meant to them.'
On another note, European wine producers keep hoping that China is going to wake up and start buying even more millions of bottles of wine from them, but perhaps their lack of knowledge of the Chinese markets, cultures and languages, to say nothing of a sense of tokenism, is preventing them from establishing themselves more importantly in China. How many European wine producers have tasted even one bottle of wine made in China?
Skeggs talked about Ann Anagnost, who wrote in 2004 about the Chinese state's emphasis on suzhi, encouraging educational attainment and adherence to social norms associated with urban models of civility. Commonly translated as 'quality', suzhi refers to physical, intellectual and moral cultivation of individuals. According to Skeggs, Anagnost 'details how the discourse of suzhi has now become a government imperative. Fine wine feeds into the idea of quality – knowledge, taste and epistemology, knowing what to do with objects such as wine.'
In the future, fine wine will come from places most people have never heard of before, especially China. The Concours Mondial des Bruxelles published some very interesting statistics earlier this year. 'Nearly one quarter of all samples in the higher price categories entered in the Concours Mondial in 2017 were from China. And nearly one third of them were awarded a medal by the judging panel. With 847,000 hectares of vineyards, China boasts the second largest area under vine in the world (with Spain at the top, France – third, and Italy – fourth).' The production of fine wine in China could soon surpass production by the traditional bastions of fine wine.
Skeggs agreed: 'The Chinese always make sure they can do everything the west does but better. So they used to rely on the US and UK for elite university education. Now their own universities are much better. I'm sure they'll surpass the Old World when it comes to wine production. They have all the ingredients: investment, land of various types, knowledge, interest, labour – and think of the size of the market. I'm always fascinated by the lack of knowledge about the incredible Chinese cultures — they probably know a lot more than we do.'
My conclusions this year are not much different from those of last year. The future is still about building alliances based on shared values, about building bridges and eradicating false dichotomies and sectarianism. The fine-wine consumer today enjoys Champagne on Monday and sparkling wine from Tasmania on Tuesday. She enjoys Barolo on Wednesday and Cabernet Sauvignon from Ningxia on Thursday. He enjoys Savagnin from the Jura on Friday and sake from Tohoku on Saturday. (Sunday is a day of rest.) If the fine-wine community is a global one, we need to do a better job of working together and understanding each other.
We must cultivate alliances between like-minded producers who care about sustainability, who worry about climate change, who champion human rights, regardless of where they are located in the world. This remains the ultimate vision for which the fine-wine community needs to strive.