Hot Category
Properties Harvest New Dollars From Wine Industry’s Major Players
2006 TOP 20 U.S. WINE COMPANIES
Source: Wine Business Monthly
: Looking to capitalize on U.S. consumers’ growing demand for their product, as well as gain a point of differentiation in an increasingly competitive category, wine makers are turning to sponsorship in greater numbers.
Most significantly, wine brands are branching out beyond sampling opportunities at wine and culinary festivals and aligning with non-endemic properties ranging from nonprofits to festivals to sports events.
For example, Constellation Wines U.S., Inc. aligned in April with the Tribeca Film Festival on behalf of the Mouton Cadet label, which it distributes in the U.S. Constellation also will sponsor this August’s Lollapalooza music festival on behalf of its Blackstone brand.
Wine’s appearance at properties where beer and spirits sponsors are much more common reflects its growing popularity.
More wine was sold in the U.S. in ’06 than ever before. U.S. retail table wine sales in food, drug and major-market liquor stores were $7.4 billion for the year ended May 5, up 6.2 percent over the previous year, according to The Nielsen Co.
And consumers have a wide variety to choose from, with producers flooding the market with new labels, both domestic and imported.
“With such an influx of new brands, how do you get a point of differentiation from your competitive set without spending a lot of money? Sponsorship is the perfect way to align with something that consumers value,” said John Tichenor, group brand director for Brown-Forman Corp., which in April kicked-off a new event marketing program on behalf of its Fetzer wines.
A key driver for Brown-Forman and other vintners is reaching consumers in their 20s and 30s, an age group that traditionally favors beer and spirits, but is catching on to the overall wine trend.
“Younger consumers are purchasing more wine, and sponsorship provides a different way to talk to them and engrain wine as part of an everyday lifestyle, not just Thanksgiving,” Tichenor said.
Fetzer Goes Green To Expand Market For Reds And Whites
Brown-Forman launched the Fetzer Green Tour to reach young adults and introduce them to the brand. The mobile marketing tour, which provides information on environmentally conscious living, is slated to visit Seattle’s Seafair festival, Milwaukee’s Summerfest and 28 other lifestyle-centric events over the next year.
The tour is designed to reach younger consumers by highlighting the brand’s well-established sustainable business practices, including its commitment to growing and purchasing only organic grapes by 2010.
“Our core consumer is in their early 40s, and we’re using this tour to expand our customer base to consumers in their 20s, a demographic with whom this environmental message hits home,” Tichenor said.
At each event, Fetzer will set up a display centered around a Fetzer Green Tour-branded Toyota Highlander hybrid SUV. The company will use its display area to sample wine–where legal–and discuss its commitment to the environment.
To add credibility, Brown-Forman is supporting the program through a $20,000 partnership with the National Arbor Day Foundation. At the tour’s microsite–Fetzer.com/GreenTour–the company offers to make a $1 donation to the foundation for each visitor who subscribes to the free Fetzer Green Newsletter, up to $20,000.
The company also is offering to send a free sapling to the first 100 consumers in each market who visit its display space. The company will use the donation, tree giveaway and an ancillary sweepstakes dangling a hybrid vehicle to acquire a database of consumers with whom it can continue a dialogue after the program, Tichenor said.
To generate a buzz prior to the events, Brown-Forman is running radio ads two weeks prior to each stop. It also will bring the program to retail accounts, Tichenor added.
Brown-Forman’s other major wine sponsorship is by its Bonterra Vineyards label, which is in the second-year of a multiyear partnership with the PGA of America. The company markets 15 other wine brands.
Tips On Selling The Wine Category
Below, IEG SR offers tips on how properties can secure a wine sponsor.
Go big. Despite the fact that there are nearly 6,000 wineries in the U.S–not to mention import brands–the top 30 wine companies by case sales represent more than 90 percent of the market, according to Wine Business Monthly (see table).
Thus properties should target those large, commercial operations that produce hundreds of thousands or millions of barrels of wine each year and have corresponding marketing budgets, as opposed to boutique wineries.
Go for “fun.” To make their wines more accessible, particularly to young adults, wine producers have introduced a host of what have become known as “critter” and “adventure” brands that do away with traditional names and vineyard imagery.
Critter brands feature animals in the name and on the label, while the so-called adventure brands use catchy or clever names and visual cues. These upstart brands rely more on promotion than others in the category, making them good sponsorship prospects.
For example, E. & J. Gallo Winery’s Barefoot Wine uses its partnerships with the Crocs AVP Pro Beach Volleyball Tour and the Surfrider Foundation to highlight its casual, good-time positioning that “captures the spirit of California.”
The brand leverages its two-year-old partnership with the AVP with “foot-o-graph” autograph sessions by barefoot AVP players and a Soles of Summer promotion offering a trip to the Las Vegas AVP tournament and other prizes.
Barefoot is leveraging its Surfrider partnership with a Beach Rescue Project that includes six beach clean-up events in California, Florida, Hawaii and New York, plus a seventh to be selected by online voting. Each event includes music performances, volleyball lessons and food and wine tasting.
Meanwhile, “critter-labeled wines are on the rise, quickly gaining share in the table wine category,” said Danny Brager, vice president client service, for Nielsen’s Beverage Alcohol team. Sales generated by new brands featuring a critter outperform other new wines by more than two to one, he added.
Look to tie-in retailers. Like other products that sell through retail, wine marketers look for promotional opportunities to build relations with the trade, especially with so many brands fighting for shelf space.
Australian wine maker
Aussie Vineyards attributes last year’s partial season title of a NASCAR Craftsman Truck Series team with securing placement in 80 of The Kroger Co.’s Smith’s Food & Drug Stores. That success prompted the company to expand its NASCAR involvement this year with title of a NASCAR Nextel Cup Series team for a minimum of two races and cosponsorship of a Busch Series team for the entire season.
And retailers, especially supermarkets, are particularly interested in wine, as Nielsen research shows that shoppers who include a wine purchase account for higher per-visit sales than those who purchase beer, spirits or no alcoholic beverages at all. Many retailers are remodeling and expanding their wine sections to accommodate consumer demand, according to Wine Business Monthly.
Offer on-site sales and/or sampling. Where possible, properties should include in their sponsorship packages opportunities to put wines in the hands of their adult audiences.
For example, wine distributor Premier Beverage Co. of Florida signed a first-time deal earlier this year to sponsor a wine tasting area at the Coconut Grove Arts Festival presented by BlueCross BlueShield of Florida.
“Premier paid a considerable amount for the exclusive rights to this area and brought in over fifty brands,” said Andrew Korge, president of Korge & Co., an event marketing agency that represents the festival. ”The response from our patrons was overwhelming and exceeded both our and the sponsor’s expectations.”
Before offering on-site sampling or sales, properties must check state and local laws to make sure the practices are legal.
Know who to approach. At most large wine producers, sponsorships are spearheaded by brand marketing managers.
Some of the biggest players have dedicated sponsorship staff to help negotiate and execute ties. For example, Woodinville, Wash.-based Jennifer Jones, Constellation Wines’ national sponsorship & event manager, helps brand marketing managers negotiate and execute ties.
Sponsorships also emanate from local wine distributors, such as Florida’s Premier Beverage Co.
Sources
Brown-Forman Corp., Tel: 502/585-1100
Korge & Co., Tel: 305/476-9782
The Nielsen Co., Tel: 847/605-5312