A brand is a unique design, sign, symbol, words, or a combination of these, employed in creating an image that identifies a product and differentiates it from its competitors. A wine brand is strong when it has a high awareness level among customers, a high emotional connection with them, and has built a long-term relationship with them. This translates into both hard data Key Performance Indicators (KPIs) such as price, strength of distribution channels, sales level and its evolution, presence in social medial and soft data KPIs such as brand awareness and brand value. All wineries will not grant the same importance to all indicators, depending on size and ensuing strategic focus.
Basic economic indicators, which are linked to the survival of the winery are obviously the more used.
Price is one strong indicator of the brand’s power. Screaming Eagle Cabernet Sauvignon in Napa, fetching process of up to 1.700 $ a bottle is a stronger brand than Caymus, only fetching 110 $ a bottle. The same happens at appellation level where Chateauneuf-du-Pape wine has an average selling price of between 30 to 50 € a bottle – going as high as 450 € for the best producers – Chateau Rayas is a case in point – versus Gigondas, a neighboring appellation in Southern Rhône sold at much lower prices, usually 10 to 15 €.
Price evolution over time is also a sign of brand strength. Big companies like Concha y Toro do measure their brand power through their ability to increase their selling price, as Sebastián Aguirre, Marketing Director explains. Casillero del Diablo brand, part of Concha y Toro group, has increase its retail price from £5,99 to £7,99 over a period of 6 years (2010 – 2015). At the same time, selling at a higher price has helped raise the consumer perception of the wines, another KPI used by the company.
Along with price, sales level and evolution over time is another indicator of brand strength. But since this KPI is analyzed in more detail by wineries, it is linked to other more precise ones, which vary according to winery strategy. Gambino, a small winery producing 150.000 premium bottles a year in Sicily, relies on Direct to Consumer (DTC) and local sales for its survival. Therefore, it measures the number of restaurants in the island where it is present (55% - 2017 data) but also the number of cruise passengers they are able to attract to their winery (25% in 2017). Actions on these KPis will drive an impact on sales. Bigger brands – Casillero del Diablo – will measure their volume evolution year on year on their main market – the UK. 35% rise in volume from 2014 to 2015 is a positive sign of brand strength as well as their global presence (Casillero del Diablo brand sells in 140 different countries).
Since online and social media presence are increasingly important in the strategy of the wineries, that presence is measured carefully. Once again, depending on size and strategy, the KPIs will not be the same. The small Whitehall winery in Napa Valley, owned by the Leonardini family, are using social media to grow a loyal fan base outside the tasting room. In order to measure the success of their strategy, they measure Wine Club member Sales (+39%) and their Wine Club retention rate (+99%) for the period 2014-2015. Medium sized winery like Pacific Rim in Oregon, specialized in Riesling, communicates about the grape variety and measures the impact of that communication after having launched a book on Riesling rules. Figures were +7000% increase in traffic, +15% increase in revenue and +73% increase in transactions in 2015.
Big wineries, like Constellation brands, measure the financial impact of their online presence. The increase of the number of likes during the period 2012-2015 has resulted in a 41$ M increase in incremental retail value. They also measure the impact of promotions. For instance, over the same period, online promotions and mobile coupons for Woodbridge have increased sales by 127%. Besides those direct measurements of current brand performance, online KPIs are also used to compare online presence versus that of the competitors, using KPIs like Share of Voice (SOV), a measurement of mentions on the web allowing the winery to understand how often people are engaging with it around the topic of social analytics, and then measure the engagement level of the competitors, as well.
Other KPis are as important as those mentioned above, but are more difficult to measure.
Brand awareness – driving brand value and customer sales – is the rate of recognition of a brand and its overall evaluation. Brand equity, that is the intangible value of a brand, beyond financial results, is another way to measure brand strength. Referring to the Milward Brown’s Global Brand ranking 2018 of the most powerful brands, no single wine brand is present, meaning that overall, wine brands still have to work both on building increased strength and also on the way to measure it properly. Counterfeiting, in spite of all the negative impact in can have on the brand’s value, is also an indirect recognition of a brand strength. This can happen either at regional level (ice wine from Canada widely copied in China) or at brand level (according to Maureen Downey, counterfeiting specialist, 70% of Chateau Lafite-Rothschild wines sold in China are fake), proving in a way the power of the brand. Other intangible assets of a wine brand are the power to attract talent, maintain a low turnover of highly motivated people, reach profitable agreements with partners and easily get bank loans when needed. For instance, it is easier for Gallo and its Dark Horse brand to be the official sponsor of major music festivals in the US (Meiningers October 2017), than for Bottazzi’s winery in the Colli Tortonesi area of Piemonte, a rather unknown DOC, to reach agreements with the local McArthur Glen Outlet, the biggest in Europe, greeting over 4 million visitors a year, to attract visitors and promote his wines.
As stated above, each winery will measure brand strength according to its strategy, size and sales channels. Even though across differences, price and sales levels will be used as hard data to measure brand power, KPIs will be adapted to each situation. Across differences, online and social media presence measurement is a must, which has to be completed with more soft measurements, such as brand awareness, brand equity, counterfeiting importance and positive image among shareholders.