Wine Labels (Almost) Everything to Shoppers
How important are wine labels really? According to Nielsen, “the role of ‘the Label’, is critical for wine.” Do consumers prefer light hearted labels (critter brands, clever names) or serious labels? There is a lot of room for both, but it’s important to understand what kind of labels appeal to which kind of consumer.
The wine label is almost solely responsible for getting the brand’s message across to the consumer. It is the marketing strategy for most, and therefore very important. Just for the sake of comparison, wine spent about $43m on advertising in the first half of 2007, while spirits spent $233m and beer spent $516m.
In addition, wine shelves are getting more and more crowded with new entries, making it more important for labels to stand out. According to Nielsen, over 3300 wine brands have flood grocery stores since 1999 and they now represent about 70% of active brands today. Interestingly, most of the newer entries and growth have come from higher price points. In 2007, 27% of new wines fell in the $10-$14 price range, while 21% were $14-$25 and 19% ranged $8-$10, says Nielsen.
Unfortunately, wine consumers are fickle and tend to jump from brand to brand. They “tend to be variety seekers” and often become aware of brands in the wine aisle. However, if a wine consumer likes a certain package they are more likely to continue purchasing the wine. Wine buyers tend to care more about the label if they are drinking socially versus drinking alone or with a significant other. Also, women tend to put the most emphasis on the appearance of the label.
A whopping 78% wineries surveyed by Nielsen said it is “very important” for a wine label to stand out on the shelf, while 0% said it’s very important for the label to be serious. Winery staff thinks consumers believe it’s very important for wine labels to communicate the quality of the wine (60%), reinforce the brand name (55%), emotionally appeal to the consumer (42%) and appeal to the trade (40%).
But what do consumers think? Nielsen’s “Generations” study unveiled the habits and practices of different generations. Millennials (21-30) spend about $35 million or 26% of their beverage alcohol dollars on wine versus 20% ten years ago. Generation X (31-44) spends $25 million and Boomers (45-65) spend $77 million. As compared to beer and spirits, more wine consumers (49%) are influenced by packaging, which includes the description on the label, the label’s appearance or a new brand they want to try. Millennials are the most influenced by package browsing and less influenced by habit.
“While there is no such thing as a typical wine consumer, for several large consumer segments, labels matter the most,” Nielsen deduced in its study.
And most importantly, there is room for both traditional labels and entertaining labels. Entertaining labels include critter labels, celebrities and transportation, which grew 7.7%, 9.8% and 7% in dollar sales in the 52 weeks to December 2007, respectively. Based on Constellation’s Project Genome study in 2007, labels matter the most to the following consumer categories: wine enthusiasts (enjoy variety), overwhelmed consumers (spend a lot of time studying labels) and image seekers (looking to impress friends). However, be careful with labels changes for brands enjoyed by traditional wine consumers (enjoys traditional labels) and satisfied sippers (very brand loyal).
All in all, it’s important to understand the message you wish to convey and the type of consumers you are targeting your brand towards.
[Ed. Note: Nielsen presented this data at the Oregon Wine Symposium on February 11, 2008 in Eugene, Oregon.]
MILLENNIALS RESERVE CHAMPAGNE FOR SPECIAL OCCASIONS
A new research study coming from Sonoma State University in California sought to uncover the relationship Millennials (age 21-31) have with Champagne and other sparkling wine. The study featured five focus groups composed of Millennials with an average age of 22. Each focus group had 8-10 participants with a mix of 21 men and 25 women.
American Millennials came across as positive about Champagne and sparkling wine, with only 9 out of the 47 participants reporting that they disliked either the bubbles or the taste of Champagne/sparkling wine. In each focus group at least one person understood the difference between Champagne and sparkling wine, and the majority of participants perceived Champagne as more expensive. As a result, they would purchase sparkling wine for causal occasions, but only purchase the more expensive Champagne and high-end California sparkling for very special occasions.
When performing a blind taste test, the majority of Millennials (21) preferred a Spanish cava (priced $10-$12). The US sparkling wine was the favorite of 16 Millennials and priced similar to the Spanish wine. The Champagne, which was most expensive, was the favorite of 10 Millennials.
Most Millennials (57%) drink Champagne/sparkling wine infrequently on special occasions. Others (21%) said they drink it once or twice a month, and 22% said they drink it as least weekly.
Keep in mind that the study was based on focus groups in California and can't be generalized to a larger population, although it provides some insights on US Millennial perceptions of Champagne/sparkling wine.
To read more about the study, check out this article in Wine Business.
WSD BRIEFS:
MICHIGAN RETAIL BILL UPDATE. HB 6644 was quickly approved by the House Regulatory Reform Committee yesterday, which bodes bad news for in-state and out-of-state retailers. HB 6644 seeks to halt in-state and out-of-state retailers from shipping directly to consumers. The bill will not reach the floor before next month, reports the AP. Click here to review our coverage yesterday.
WINE INDUSTRY LOSING TRADE-UP POWER. In a research note, Morgan Stanley said the wine industry is losing its trade-up power. In the last four weeks, wines priced below $7 drove 90bps of share gain. Over the past three 4-week periods, the group says it has seen “an acceleration in the year over year share gains for this price class.”
Until Monday, Megan
“Style is knowing who you are, what you want to say and not giving a damn.”
Gore Vidal
--------- Sell Day Calendar ----------
Today's Sell Day: 10
Sell days this month: 19
Sell days this month last year: 21
This month ends on a: Fri.
This month last year ended on a: Fri.
YTD sell days Over/Under: +1
BEER SUMMIT 2009 - The Four Seasons, Austin, Texas - Join us for great speakers, intelligent discourse, good food, and of course great beer at the next Beer Summit on March 1 - 2, 2009. Click here: http://tinyurl.com/beersummit
WINE & SPIRITS DAILY
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© 2008 Wine & Spirits Daily, all rights reserved. May quote with attribution.
The wine label is almost solely responsible for getting the brand’s message across to the consumer. It is the marketing strategy for most, and therefore very important. Just for the sake of comparison, wine spent about $43m on advertising in the first half of 2007, while spirits spent $233m and beer spent $516m.
In addition, wine shelves are getting more and more crowded with new entries, making it more important for labels to stand out. According to Nielsen, over 3300 wine brands have flood grocery stores since 1999 and they now represent about 70% of active brands today. Interestingly, most of the newer entries and growth have come from higher price points. In 2007, 27% of new wines fell in the $10-$14 price range, while 21% were $14-$25 and 19% ranged $8-$10, says Nielsen.
Unfortunately, wine consumers are fickle and tend to jump from brand to brand. They “tend to be variety seekers” and often become aware of brands in the wine aisle. However, if a wine consumer likes a certain package they are more likely to continue purchasing the wine. Wine buyers tend to care more about the label if they are drinking socially versus drinking alone or with a significant other. Also, women tend to put the most emphasis on the appearance of the label.
A whopping 78% wineries surveyed by Nielsen said it is “very important” for a wine label to stand out on the shelf, while 0% said it’s very important for the label to be serious. Winery staff thinks consumers believe it’s very important for wine labels to communicate the quality of the wine (60%), reinforce the brand name (55%), emotionally appeal to the consumer (42%) and appeal to the trade (40%).
But what do consumers think? Nielsen’s “Generations” study unveiled the habits and practices of different generations. Millennials (21-30) spend about $35 million or 26% of their beverage alcohol dollars on wine versus 20% ten years ago. Generation X (31-44) spends $25 million and Boomers (45-65) spend $77 million. As compared to beer and spirits, more wine consumers (49%) are influenced by packaging, which includes the description on the label, the label’s appearance or a new brand they want to try. Millennials are the most influenced by package browsing and less influenced by habit.
“While there is no such thing as a typical wine consumer, for several large consumer segments, labels matter the most,” Nielsen deduced in its study.
And most importantly, there is room for both traditional labels and entertaining labels. Entertaining labels include critter labels, celebrities and transportation, which grew 7.7%, 9.8% and 7% in dollar sales in the 52 weeks to December 2007, respectively. Based on Constellation’s Project Genome study in 2007, labels matter the most to the following consumer categories: wine enthusiasts (enjoy variety), overwhelmed consumers (spend a lot of time studying labels) and image seekers (looking to impress friends). However, be careful with labels changes for brands enjoyed by traditional wine consumers (enjoys traditional labels) and satisfied sippers (very brand loyal).
All in all, it’s important to understand the message you wish to convey and the type of consumers you are targeting your brand towards.
[Ed. Note: Nielsen presented this data at the Oregon Wine Symposium on February 11, 2008 in Eugene, Oregon.]
MILLENNIALS RESERVE CHAMPAGNE FOR SPECIAL OCCASIONS
A new research study coming from Sonoma State University in California sought to uncover the relationship Millennials (age 21-31) have with Champagne and other sparkling wine. The study featured five focus groups composed of Millennials with an average age of 22. Each focus group had 8-10 participants with a mix of 21 men and 25 women.
American Millennials came across as positive about Champagne and sparkling wine, with only 9 out of the 47 participants reporting that they disliked either the bubbles or the taste of Champagne/sparkling wine. In each focus group at least one person understood the difference between Champagne and sparkling wine, and the majority of participants perceived Champagne as more expensive. As a result, they would purchase sparkling wine for causal occasions, but only purchase the more expensive Champagne and high-end California sparkling for very special occasions.
When performing a blind taste test, the majority of Millennials (21) preferred a Spanish cava (priced $10-$12). The US sparkling wine was the favorite of 16 Millennials and priced similar to the Spanish wine. The Champagne, which was most expensive, was the favorite of 10 Millennials.
Most Millennials (57%) drink Champagne/sparkling wine infrequently on special occasions. Others (21%) said they drink it once or twice a month, and 22% said they drink it as least weekly.
Keep in mind that the study was based on focus groups in California and can't be generalized to a larger population, although it provides some insights on US Millennial perceptions of Champagne/sparkling wine.
To read more about the study, check out this article in Wine Business.
WSD BRIEFS:
MICHIGAN RETAIL BILL UPDATE. HB 6644 was quickly approved by the House Regulatory Reform Committee yesterday, which bodes bad news for in-state and out-of-state retailers. HB 6644 seeks to halt in-state and out-of-state retailers from shipping directly to consumers. The bill will not reach the floor before next month, reports the AP. Click here to review our coverage yesterday.
WINE INDUSTRY LOSING TRADE-UP POWER. In a research note, Morgan Stanley said the wine industry is losing its trade-up power. In the last four weeks, wines priced below $7 drove 90bps of share gain. Over the past three 4-week periods, the group says it has seen “an acceleration in the year over year share gains for this price class.”
Until Monday, Megan
“Style is knowing who you are, what you want to say and not giving a damn.”
Gore Vidal
--------- Sell Day Calendar ----------
Today's Sell Day: 10
Sell days this month: 19
Sell days this month last year: 21
This month ends on a: Fri.
This month last year ended on a: Fri.
YTD sell days Over/Under: +1
BEER SUMMIT 2009 - The Four Seasons, Austin, Texas - Join us for great speakers, intelligent discourse, good food, and of course great beer at the next Beer Summit on March 1 - 2, 2009. Click here: http://tinyurl.com/beersummit
WINE & SPIRITS DAILY
Subscribe or check back issues at: www.winespiritsdaily.com
Send news and comments in confidence to: megan@winespiritsdaily.com
© 2008 Wine & Spirits Daily, all rights reserved. May quote with attribution.
posted at 12:50 PM
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