Wine sales, like the sale of all goods considered luxuries, were hit hard over the last couple of years. And no one has felt the effects more than France, which last year ceded its place as the world’s second largest exporter of wine by volume to Spain. In the United States, French wine and spirits sales dropped some 22 percent in 2009, with the one growth category being – of all things – French vodka. The numbers may be troubling, but there is hope on the horizon. An increasingly sophisticated and adventurous consumer is seeking out wines from emerging, more value-driven French regions. And, as the economy slowly recovers and diners return to restaurants, a taste for French wine has been reignited, which is sure to have a positive ripple effect on off-premise sales, too.
Mention French wine and most people still think of Bordeaux and Burgundy. While these two well-known regions are generally associated with high-end producers and expensive bottles, a wealth of affordable, accessible wines can also be found from there. The key is to unearth wines from smaller producers and lesser-known appellations, a feat best achieved by building strong relationships with wholesalers over time. Emerging regions, such as the South West of France, can also offer unbeatable value, but even in a difficult economy price is never the only factor at play. Consumers are looking for offerings that fit their budget, but are increasingly savvy and open to discovering hidden gems.
Promoting Affordable Products
Bordeaux continues to be one of the most recognizable French brands to Americans. While there is more to the region than Grand Chateaus like Lafite and Margaux, it’s still associated with luxury and high prices in the minds of consumers. Yet, like every wine producing part of France, Bordeaux is home to its share of good-value wines. Sopexa, the marketing and communications agency for French foods and wines, has focused on promoting affordable Bordeaux over the past year in an effort to change people’s perception of the region as a producer of expensive wines.
“Bordeaux is, of course, well known in the U.S., so it’s not about raising awareness, but about developing the point of sale and driving consumers to the wine,” says Sopexa’s managing director Serge Lozach. “The issue Bordeaux has is that people know about it and think it’s expensive. It’s really a misrepresentation. So, we are working with Bordeaux wines at the $20 price point. We’re doing a nationwide program with retailers, with close to 2,000 tastings and 270 seminars educating consumers and professionals.”
The approach has worked for New York retailer Sherry-Lehmann, which specializes in wines from Bordeaux and Burgundy, but has a healthy contingent of what it calls “French country wines.” The company has gone to such lengths to seek out good, affordable producers from the two regions that in 2008, at the height of industry-wide panic over plummeting sales, Sherry-Lehmann actually saw growth in the category.
“Bordeaux is such an important part of what we do. So, it’s the perfect place for us to go for [value wines],” says chief executive Chris Adams. “There’s always going to be the perception of Sherry-Lehmann that we’re expensive. But the truth is that the vast amount of wine we sell is under $15 a bottle. It’s always been that way. We were caught off guard by what’s been happening the last couple of years, but we’ve been able to react pretty quickly.”
At Astor Wines, wine buyer Lorena Ascencios believes that good relationships with wholesalers are key to unearthing good-value wines. She tries to select wines from lesser-known appellations that could easily stand in for higher-profile, more expensive wines.
“What I like to do is work with small wholesalers, who offer better pricing on lesser-known brands,” she says. “Not being afraid to embrace the less-known labels is really crucial in this market. It’s something that we’ve been cultivating for years. For example, not necessarily going for a Meursault or Puligny-Montrachet, but maybe veering off to St. Aubin or Pernand Verjelesse, which maybe didn’t have as much pull in past years, but people are willing to drink now. We try to push these on our customers – not just because we want to sell it to them, but because we think that these truly are the better value.”
Another region that has fallen victim to its own popularity is Beaujolais. The Nouveau category has been such a success that it has come to overshadow everything else the region has to offer. Now, consumers associate Beaujolais with nothing else. The team at Sopexa has been working to shift attention away from Nouveau and focusing on the 10 crus of Beaujolais through tastings and promotional materials. As a result, Morgon, Brouilly, and Moulin-à-Vent are becoming more common sights on store shelves.
“Beaujolais has been another growth category for us,” says Adams. “It’s always a big part of what we do. The wine is getting better and better from that region, and the price point is always attractive.”
Emerging Wine Markets
Last year, South West France Wines embarked on its first ever U.S. communications campaign, targeting trade, press, and consumers. The region, France’s fourth largest in terms of both sales and volume, stretches from just beyond the southern edges of Bordeaux down to Basque Country. Its grapes include such varietals as Baco Blanc, Folle Blanche, Fer, and Gros Manseng – all relatively unknown to the average consumer. But anonymity can be a boon: the wines, Bordeaux-like in style, offer exceptional value.
“South West France is quite unknown in the U.S. so we are trying to educate distributors and importers, and are doing in-store tastings where possible to educate consumers,” says Lozach. “We’re also educating the opinion leaders in the market, which are the sales reps selling the wines and the sommeliers.”
Other regions that have successfully emerged and are becoming increasingly recognizable to consumers seeking good, well-priced wines include Languedoc, Alsace, and Côtes du Rhône. Languedoc-Roussillon, which produces more than a third of France’s total wine volume, has been touted in a recent edition of The New York Times for its vastly improved and good-value offerings. Not that price should not be the only focus, according to Oriane Beloud, export marketing manager for Inter-Rhône. Marketing campaigns for both Alsace and Côtes du Rhône are centered on the pairing of wine and food, as a means to target both on- and off-premise audiences with a single, unified message. Inter-Rhône’s campaign, “Côtes du Rhône: Always Right,” includes a book of recipes, published in conjunction with Elle magazine, that retailers can give away as incentives to customers upon purchase.
“Wine, to me, is about food. Pairing is a natural thing to do,” says Stephanie Teuwen, a consultant for Deussen Global Communications, which represents Alsace. “Especially in this country, that’s how people enjoy it.”
Inside (and Outside) the Shop
French wines traditionally do well on-premise, but that doesn’t mean they can’t also shine off-premise. In fact, as restaurants start to see a boost in business, retailers are likely to feel the effects, too: diners who fall for French wines at their favorite bistro are likely to seek these out again the next time they visit their local wine shop.
Sopexa’s Beaujolais campaign, for example, includes an annual Best Beaujolais Bistro Cup, in which 10 restaurants’ Beaujolais selections are evaluated by a panel of secret judges. Educational materials are placed strategically throughout each restaurant, intended to raise awareness of the region’s 10 crus. What the customer learns from onsite materials at the restaurant, he or she is sure to take home and, eventually, to the store.
Certain retailers have even teamed up with local restaurants for cross-promotional campaigns that successfully target consumers in both the dining room and the shop. According to Teuwen, it’s easy for retailers and restaurants to partner because the two aren’t in direct competition. As part of Alsace’s summer campaign, Chambers Street Wines in New York will display flyers and business cards for Brasserie (which has an Alsatian chef), The Sea Grill, and Café Centro, while each restaurant does the same with the wine shop’s cards. The intention is not only for both entities to access a wider audience, but also to reinforce the pairing of Alsace wines with food. And so, while the restaurants host Alsace pairing dinners, the retailer hosts in-store tastings.
“As we begin the white wine season, we’re starting to do tastings with retailers interested in selling Alsace wines, and these always prove to be extremely successful,” says Teuwen. “It’s exciting how many bottles you can sell in two hours of pouring. Plus, you get to interact with the consumer, and they inevitably come back. You definitely get a return customer.”
Of course, the most effective way to move any wine is to place it where the consumer can see it. According to Lozach, getting people to understand the varietal nature of French wines is key to selling it. He often recommends that retailers try switching to a varietal-based layout in the store. One of the biggest challenges to French wines is creating brand awareness in markets, like the U.S., that favor varietal labeling. While the French government recently has relaxed laws to allow winemakers to use grape varieties on labels, this is still rare in France. And so, stocking wines by grape variety can be an effective way to educate customers on which grapes are associated with which regions.
“If someone is looking for a Merlot, they may not choose a Pomerol. But when you re-arrange the wines by varietal, in your Merlot section you’ll see Pomerol. So people will say, ‘Oh, a Pomerol is a Merlot from France. Let me try this,'” explains Lozach. “I think a lot of the retailers who have changed their store displays in this way have benefited the France category in particular, but also other countries with similar labeling laws to the French.”
Looking Forward
Surveys show that wines from France are still the most talked-about on the Internet, and French wine brands are responding by jumping on the social media bandwagon. In addition to in-store tastings, a number of retailers – especially those with an online sales presence – are using to Twitter and Facebook to promote their wines. Clark Z. Terry, a sales rep at Kermit Lynch in Berkeley, CA, believes that outstanding customer service in the shop should be complemented by an aggressive outreach effort via the Web. The store’s blog is updated regularly and its Facebook page counts nearly 2,000 fans.
“Basically what we’ve done is increased our Web presence. We are trying to communicate with our clients more using social media and email and, in turn, increase our customer base using the Internet,” he says. “Like everyone out there, we are focusing some of our marketing on our value selections – $20 and under – but we are also trying to be innovative with how we discuss our wines. We do our best to avoid big sales and discounts, so finding different angles to discuss and highlight certain selections is essential.”
Industry experts like to speculate on what the future holds. Will wine prices return to pre-economic downturn levels? Or will consumers become accustomed to the better value wines offered by small, boutique producers that retailers are pushing now?
“Part of what you have to do in this environment is create excitement,” says Adams of Sherry-Lehmann. “The consumer is looking for something to be excited about at a certain price point. But not everything is about price. When you have a good story and a good wine at a good price, you can flesh it out. Certain consumers are going to work their way back up, but many won’t. I think the consumer is going to find out that you don’t have to spend a lot to get quality.”
Lozach agrees: “What we do know is that people who once spent $40 on wine are now spending $20 and realizing that the quality is different from what they expected. We may have changed the consumer’s expectations.”
Sidebar: 10 Tips for Selling French Wine
• Seek out smaller, lesser-known producers from the best-known regions, like Bordeaux and Burgundy.
• Build lasting relationships with good, small wholesalers, who are the gatekeepers of good, small producers.
• Discover wines from emerging regions, like South West France and Languedoc-Roussillon. A number of appellations offer programs for retailers to help you learn about the grape varieties of these regions. (Have you ever heard of Folle Blanche?)
• Educate your customers on what they think they know. For example, there’s more to Beaujolais than Nouveau (10 crus more, in fact!).
• Conduct in-store tastings: you’ll be surprised how much wine you can move in two hours of pouring.
• In your in-store tastings, focus on pairing information: your customers are probably going to drink the wine they buy with dinner that night.
• Speaking of pairing, French wine does great on-premise, so try teaming up with a local restaurant to cross-promote a certain type of French wine.
• Consider switching to a varietal-driven layout to make customer favorites like Chardonnay and Pinot Noir easier to find.
• Do you have an online presence? Try reaching out to customers via a blog, Twitter or Facebook.
