(This is an executive Summary written by Guillaume Jourdan. Follow us on Facebook)
After the Stop Bordeaux Bashing campaign that we launched in 2014, the criticisms that we’ve heard for quite a few years already are back, in chorus, for the new 2014 Futures opening: 1) Prices for top Bordeaux wines are too high 2) The Bordeaux wine selling system is outdated. I think that the real problem with Bordeaux lies elsewhere. In fact, Bordeaux is going through a period of major transition. In a recent article from WINE SPECTATOR entitled “Bordeaux’s Futures Trap”, Jean-Louis Carbonnier – who handles U.S. marketing efforts for Château Palmer – explained: “The problem with futures is that all the best properties of Bordeaux are simply competing on price (…) All the wines are released at once, and the only thing the consumer can use to judge them are price and score.” The transition famous Bordeaux chateaux are going through is a troubled period when they have to rethink their marketing strategy in order to find a solution to this problem. In her brilliant piece in Decanter Asia, Jane Anson explains: “Chateaux need to be much more active in the markets either through advertising and marketing”. Why? Because the real problem is not the high prices of the top châteaux. Nor of an outdated Négociant system. No, Bordeaux top wines simply have to give themselves the means to back up their claims and adopt a luxury brand strategy.
A luxury brand strategy? But what is luxury first of all? Luxury is the ordinary of extraordinary people and the extraordinary of ordinay people. In fact, luxury brands can’t live without both targets. But, I would also immediately add: Luxury represents first of all the future of tradition. And the prestigious chateaux have all the assets to succeed as more and more affluent clients look for a great tradition made modern, a culture anchored in a country and exclusivity
Every year, when I talk with chateaux about their En Primeur pricing strategy, long term is always favoured over the short term approach. Defining high prices for an En Primeur wine does not make the chateau a luxury brand. Chateaux need to build a high level of perceived luxuriousness and dreamability in order to be a luxury brand. Small volume does not make your chateau a luxury brand either. In fact, today in luxury market, niche is out. Why? Because an unknown luxury brand cannot gain the symbolic capital that its clients require: status and respect. And the need for status necessarily calls for well known and visible brands. As an example, let’s refer to the article from Adam Lechmere in Wine Searcher published today, where we can read that 2014 Mouton Rothschild and Lynch-Bages were “snapped up”. Both chateaux have a pretty good volume to sell and have made enormous efforts to promote their brands internationally for decades.
Prestigious chateaux go through a transition phasis. Luxury wine brands need to reach new clients. High prices only won’t make the deal. There must be also some seduction behing your brand. Small volumes only won’t make the deal. The desirability of your brand is correlated with the difference between brand awareness and brand penetration. Great scores only won’t make the deal. The new clients choose brands by contagion of desire, not by adhesion to their values, nor by connoisseurship. Failing that, in the long run, the strategy of Bordeaux’s top chateaux cannot succeed. Today the fine wines of Bordeaux must face reality and make sure they have the means to reach their aspirations.
More about high prices in this article from Richard Hemming: Do You Need a Time Machine to Find Value in Wine?
(*Since 2003, VitaBella Luxury Wine has been advising more than 200 prestigious wine estates for their international communication strategy incl. Chapoutier, Hugel, Dr Loosen, Famille Perrin, Brad Pitt & Angelina Jolie’s Miraval…More about VitaBella – Write to firstname.lastname@example.org)