by Tamara Scully
While cold hardy wines might be gaining prestige in regions where these grapes are grown, they still aren’t given much respect elsewhere. Cold hardy wines remain a local product, one whose reputation for quality isn’t known outside of their home environs. Developing an industry-wide brand for cold hardy grapes and wines, as well as a brand for various regions in which the wine is produced, is an important factor in expanding the reach of these wines.
Northern climates are “not often associated with good grape growing,” Bill Garten, Applied Economics, University of Minnesota said, and wines from grapes grown in these regions can be treated with prejudice. Conveying an image of cold-hardy wines that invokes the particular climate, soils and growing conditions in a positive light is needed.
Garten, along with Dr. Dan McCole, Department of Community Sustainability, Michigan State University, spoke to producers via a Northern Grapes Project recent webinar, “Branding and Best Management Practices for Cold Hardy Wines and Wineries.”
For producers who want to expand their distribution nationally or internationally, branding of cold hardy wines is going to have to occur. Increasing the awareness of the characteristics of cold hardy grapes, creating a positive image of the climate — and nuances of the grapes — and the strategic marketing of these wines is needed.
Branding Basics
Branding, whether for the industry as a whole, a region, or an individual winery, involves several steps. Creating an awareness of the wine, promoting a positive image of the product, establishing the quality of the product, and developing loyalty to the product are all necessary steps. Entering competitions and winning awards is imperative.
When building a brand, connecting with the tourism industry, joining wine trails, participating in events, and using the media are steps to success. Educating consumers about the unique characteristics of your product creates a positive image. One producer promotes the unique microclimate and characteristics of his soil, including five distinctive yeast varieties found there, that make his wines special.
To develop a loyal following, pay attention to who is visiting your winery. Are they local? What are their age and income brackets? What qualities are they seeking?
“If we understand these characteristics, we can have a core group of customers that are loyal,” Garten said. “It’s much cheaper to keep a loyal customer than it is to go out and get new customers. “A critical mass of loyal customers will almost guarantee you success.”
Consumer Perceptions
In experiments conducted both in Hong Kong and in Oregon, participants were given wines in a blind test, given the same wines with varietal information, and then given the wines with varietal and regional information. While Garten is still analyzing all of the data, preliminary results emphasized the importance of brand awareness and image in formulating consumer perceptions.
One particular red wine from Nebraska was clearly favored and rated highly in the blind taste test. But it fell in its rating when the region of origin was revealed. In general customers were not willing to pay for cold hardy wines or for wines made from unfamiliar varietals. And when it was known that the wine was made from cold hardy grapes the rating of that wine decreased.
Dr. McCole conducted experiments utilizing Marquette wines to determine what factors influence a consumer’s willingness to pay. In order to control customers stating a higher purchase price than they would pay in reality, participants were told that they might have to actually purchase the bottle for their named price at the end of the experiment.
“They had to be willing to put their money where their mouth is,” McCole explained.
The study was conducted at a Michigan winery and four bottles of wine labeled “Marquette” were tasted and rated by participants with little knowledge of the varietal. They rated the wine, and what they would pay for the bottle. They then tasted the wine and rated it again indicating their price. There were a lot of changes in ratings and price after participants were allowed to taste the wines.
Next, participants were provided with a bit more information about the wine. They were either told that the wines were “local” wines, that the Marquette grape had specific characteristics which imparted given properties to the wine – which were described; or they were given the varietal information plus the general information that awards have been won by wines made from Marquette grapes.
Participants rated each wine again, along with their willingness to pay, after being exposed to one of the three pieces of information. Results demonstrated that those told about grape origin were willing to pay an average of 58 cents more than before they had that information. Those told about varietal characteristics were only willing to pay 4 cents more, while those told about varietal characteristics in conjunction with general information on Marquette wine awards were willing to pay $1.15 more per bottle.
Entering wine competitions – whether large or small – is a good way to build consumer confidence, McCole said.
As a part of the experiment, one-half of the participants were tested as above, but were shown false names for the wines. Rather than seeing “Marquette” on the label, they saw artistic names created by the researchers. Participants who saw the artistic names on the bottles were willing to pay, on average, a slightly higher price per bottle than those whose bottles were labeled “Marquette.” Across all variables, participants were willing to pay an average of $15.75 for the wine that rated most highly overall.
Purchasing Decisions
The three distribution points for wines are retail, restaurant and tasting room. Factors used in making purchasing decisions for wine include pricing, label information, information provided by service personnel, and possibly sampling of the wine.
“Those factors are different at each point of distribution,” McCole said.
In the tasting room, the atmosphere and ambience, as well as the service, influence purchasing decisions, along with the samples. At a restaurant, price, varietal information, descriptions, origin and vintage may be available, along with any knowledge provided by the sommelier. In the retail setting, label information may be the only guideline, along with price, that is considered.
“Wineries have a limited amount of space on a label,” McCole said. “They have a limited amount of time” to communicate information to a potential customer, and the information provided could sway purchasing decisions.
Conveying the right information about cold hardy wines to consumers can affect purchasing decisions. Perceived value changes with the information made available, and can even impact taste ratings. Creating a positive image of cold hardy grapes and wines will help the industry and individual wineries thrive.
For more information visit http://northerngrapesproject.org and choose the webinar tab.
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