The trend for 2015 en primeur wines in Bordeaux is now clear: “Bordeaux First-Growth Price Increases Reach 60% for the 2015 Vintage”, Bloomberg reported. Social media is awash with negative comments on the subject. “It’s too expensive, much too expensive!” cry wine-lovers and buyers. I must say that for our part, here at VitaBella Luxury Wine we are rather delighted. The marketing of luxury wines has a great future ahead of it.
If prices are high at the moment, what will they be in 20 years? If one considers that the en primeur offer is an attractive one compared to future prices – which is after all the definition of en primeur, is it not? – then the question you need to ask yourself is, what is your definition of the future? Five years from now? Ten years? Twenty years? Certainly in 2016 you would be better off buying vintages from the ready-to-drink 1960s, 1970s, 1980s and 1990s, great Bordeaux which seem to be going for a song compared to current en primeur wines. And you can drink them now…But maybe we will be saying exactly the same thing about 2015 in 30 years’ time. In any case one thing is sure: the luxury wine market is not “efficient”, as they say in the world of Finance, because if it was then these old vintages would be much more expensive.
Personally I am delighted, because it means the future of marketing of luxury wines is bright. Yes, bright, because with prices like these, there is going to be a need for marketing campaigns that are large-scale and suited to the problems currently facing luxury products. What are these problems? The need to focus on the consumer, build the brands, segment the markets and differentiate. In a recent article in Decanter magazine, Jane Anson outlined an approach that will certainly mean great days ahead for luxury wine marketing. For the major châteaux, these ever increasing prices make it impossible to remain in a system aimed solely at négociants: they need to take control of their relationship with buyers and consumers. The increase in château stocks mentioned by Jane Anson will lead them naturally in this direction. Looking at the 2015 vintage, all the elements are in place to encourage them to develop and strengthen their relationship with consumers.
Indeed, it is a completely logical evolution in the world of luxury, with many brands now restructuring to prepare for the future. Ralph Lauren announced restructuring strategy to lead brand forward. Unveiling the new “Way Forward” plan, Stefan Larsson – president/CEO of Ralph Lauren – said in a statement: “We have a powerful, authentic brand with unique elasticity, and we will bring our company to a stronger place than ever before by connecting our brand voice more closely to consumers“. Beauty marketer Estée Lauder has also launched a multi-year initiative called “Leading Beauty Forward”. Meanwhile, a brand like Mulberry has decided to completely review its positioning and return to affordable Luxury roots, to more accessible prices. It’s a strategy that is paying off incidentally, and this success is something to think about because it could be that, sooner or later, we will realise that some châteaux have aimed too high too fast. You can’t imagine going back to more affordable prices? Mulberry did it, so why not some chateaux?