Luxury Wine Marketing: The art and science of luxury wine branding
By Peter Yeung and Liz Thach
()
About this ebook
Peter Yeung
Peter Yeung is a leading wine-business consultant. He was previously Vice President of Strategy and Business Development at Kosta Browne Winery and Realm Cellars, both in California, where he developed and executed strategic marketing plans, and a senior consultant at McKinsey & Company. He holds an MSc from the London School of Economics and a BA in Economics from the University of California, Berkeley.
Related to Luxury Wine Marketing
Related ebooks
The Wines of Greece Rating: 0 out of 5 stars0 ratingsThe Wines of Northern Spain: From Galicia to the Pyrenees and Rioja to the Basque Country Rating: 0 out of 5 stars0 ratingsThe Taming of the Screwcap Rating: 0 out of 5 stars0 ratingsWine By Design: Santa Barbara's Quest for Terroir Rating: 0 out of 5 stars0 ratingsGeorges Meekers' Wines of Malta: The Definitive Guide to the New Heritage Wines of Malta and Gozo | 2011 Rating: 0 out of 5 stars0 ratingsInside the Chines Wine Industry: The Past, Present and Future of Wine In China Rating: 0 out of 5 stars0 ratingsSweet, Reinforced and Fortified Wines: Grape Biochemistry, Technology and Vinification Rating: 0 out of 5 stars0 ratingsWines of the New South Africa: Tradition and Revolution Rating: 0 out of 5 stars0 ratingsVintage Crime: A Short History of Wine Fraud Rating: 0 out of 5 stars0 ratingsThe Wines of Southern Italy: Colloquial Wines, #1 Rating: 0 out of 5 stars0 ratingsWines of The French Alps: Savoie, Bugey and beyond with local food and travel tips. Rating: 0 out of 5 stars0 ratingsBeauty and the Yeast: A Philosophy of Wine, Life, and Love Rating: 0 out of 5 stars0 ratingsHow to Drink Like a Billionaire: Mastering Wine with Joie de Vivre Rating: 0 out of 5 stars0 ratingsWine Politics: How Governments, Environmentalists, Mobsters, and Critics Influence the Wines We Drink Rating: 3 out of 5 stars3/5Sommelier at Home Rating: 0 out of 5 stars0 ratingsAnthony Dias Blue's Pocket Guide to Wine 2007 Rating: 0 out of 5 stars0 ratingsTalking About Wine with Ease Rating: 0 out of 5 stars0 ratingsThe Complete Wine Book Rating: 0 out of 5 stars0 ratingsWine Growing in Great Britain 2nd Edition - Ebook Rating: 0 out of 5 stars0 ratingsWine: Guidance in Mixology, Pairing & Enjoying Life’s Finer Things Rating: 0 out of 5 stars0 ratingsWine Secrets Rating: 4 out of 5 stars4/5American Wine Economics: An Exploration of the U.S. Wine Industry Rating: 0 out of 5 stars0 ratingsBecome a Wine Expert; How to Taste & Drink Wine Elegantly Rating: 0 out of 5 stars0 ratingsWines of the World: A Connoisseurs' Guide Rating: 0 out of 5 stars0 ratingsLet Me Tell You About Wine Rating: 0 out of 5 stars0 ratingsHello Burgundy: A Guide to the Great Grand Cru Vineyards of Burgundy Rating: 0 out of 5 stars0 ratingsIn Vino Veritas: A Guide for Hoteliers and Restaurateurs to Sell More Wine Rating: 0 out of 5 stars0 ratingsWine 101 Rating: 0 out of 5 stars0 ratingsFacts About Champagne and Other Sparkling Wines Rating: 0 out of 5 stars0 ratingsThe Wine Etiquette Guide - Your Defense Against Wine Snobbery Rating: 0 out of 5 stars0 ratings
Beverages For You
Fancy Af Cocktails: Drink Recipes from a Couple of Professional Drinkers Rating: 0 out of 5 stars0 ratingsThe Joy of Home Brewing Kombucha: How to Craft Probiotic and Fermented Drinks Rating: 0 out of 5 stars0 ratingsBlackthorn's Botanical Brews: Herbal Potions, Magical Teas, and Spirited Libations Rating: 4 out of 5 stars4/5Wine All-in-One For Dummies Rating: 5 out of 5 stars5/5Eat Like a Gilmore: The Unofficial Cookbook for Fans of Gilmore Girls Rating: 4 out of 5 stars4/5The Wildcrafting Brewer: Creating Unique Drinks and Boozy Concoctions from Nature's Ingredients Rating: 4 out of 5 stars4/5The Bar Book: Elements of Cocktail Technique Rating: 5 out of 5 stars5/5Craft Coffee: A Manual Rating: 3 out of 5 stars3/5Bartending For Dummies Rating: 5 out of 5 stars5/5Mocktails: More Than 50 Recipes for Delicious Non-Alcoholic Cocktails, Punches, and More Rating: 5 out of 5 stars5/5Detox Juicing: 3-Day, 7-Day, and 14-Day Cleanses for Your Health and Well-Being Rating: 5 out of 5 stars5/5The Juice Generation: 100 Recipes for Fresh Juices and Superfood Smoothies Rating: 4 out of 5 stars4/5The Complete Cocktail Manual: 285 Tips, Tricks & Recipes Rating: 4 out of 5 stars4/5Wild Tea: Grow, gather, brew & blend 40 ingredients & 30 recipes for healthful herbal teas Rating: 5 out of 5 stars5/5Wild Fermentation: The Flavor, Nutrition, and Craft of Live-Culture Foods, 2nd Edition Rating: 5 out of 5 stars5/5New Mocktails Bible: All Occasion Guide to an Alcohol-Free, Zero-Proof, No-Regrets, Sober-Curious Lifestyle Rating: 0 out of 5 stars0 ratingsWitchCraft Cocktails: 70 Seasonal Drinks Infused with Magic & Ritual Rating: 5 out of 5 stars5/5The Ultimate Bar Book: The Comprehensive Guide to Over 1,000 Cocktails Rating: 5 out of 5 stars5/5The Unofficial Disney Parks Drink Recipe Book: From LeFou's Brew to the Jedi Mind Trick, 100+ Magical Disney-Inspired Drinks Rating: 0 out of 5 stars0 ratingsCocktails: More Than 150 Drinks +Appetizers and Party Menus Rating: 0 out of 5 stars0 ratingsThe Good Living Guide to Medicinal Tea: 50 Ways to Brew the Cure for What Ails You Rating: 4 out of 5 stars4/5Wine: Become A Wine Connoisseur – Learn The World Of Wine Tasting, Pairing and Selecting Rating: 5 out of 5 stars5/5Homemade Ice Cream Recipes: Over 200 Sweet Daily and Seasonal Recipes for Your Homemade Ice Creams with Local Ingredients Rating: 0 out of 5 stars0 ratings
Reviews for Luxury Wine Marketing
0 ratings0 reviews
Book preview
Luxury Wine Marketing - Peter Yeung
LUXURY WINE MARKETING
A meticulously crafted analysis of luxury wine marketing. This book needs to be on every wine executive’s desk.
Glyn Atwal, Associate Professor, Burgundy School of Business, France and co-author of Luxury Brands in China and India.
A thorough and enjoyable examination of the past, present and future of the global luxury wine business – a somewhat elusive, yet highly sought-after sector, particularly in Asia. With extensive focus on practical approaches and real-life case studies, it is a must-read for those focused on developing successful strategies to compete in the luxury wine space.
Debra Meiburg, MW, Founding Director,
Meiburg Wine Media, Hong Kong
The wine market has usually been divided into beverage/commercial wine and premium. Although luxury wine exists, there has never been a reference to analyse and understand the luxury wine market, from history to management to marketing, and even to manage imitations and counterfeits. Peter Yeung and Liz Thach have now provided an outstanding book that covers all the issues and guidelines in developing and managing a luxury wine brand. Highly recommended for wine industry professionals, wineries, and students of wine business.
Dr Larry Lockshin, Professor of Wine Marketing,
University of South Australia
An insightful look into marketing wine that goes beyond Marketing 101. Liz and Peter have brought their unique perspectives and knowledge to share with others in the wine business. For marketers and executives this is an indispensable reference.
Heidi Barrett, Winemaker, La Sirena/Barrett & Barrett,
Napa Valley, California
Yeung and Thach tackle an interesting and often misunderstood subject with diligence and care, offering a framework that is sure to stimulate understanding and progress.
Jean-Michel Valette, MW, Chairman, Vinfolio, USA
To be successful in any luxury business, it is important to understand the specialized type of marketing that is necessary to engage with luxury consumers. This book provides an excellent overview of how to accomplish this successfully in the world of global luxury wine.
Tom Bonomi, Kistler Vineyards, Sonoma County, California
CONTENTS
Foreword by Clive Coates, MW
Acknowledgements
Introduction
1. LUXURY WINE DEFINED
The luxury wine experience
Luxury wine: luxuriously defined
What luxury wine is not
The vision behind luxury wine
Vignette: the epitome of luxury wine – Dom Perignon
2. THE HISTORY OF LUXURY WINE AND KEY PLAYERS TODAY
The origin of the term luxury
A brief history of luxury wine
Luxury and the impact of economic growth
Key players in luxury wine
Vignette: Screaming Eagle transitions from cult to luxury wine
3. LUXURY WINE MARKET SIZE AND PROFITABILITY
The luxury wine business model
Luxury wine: global market size
Luxury wine profitability in context
Luxury wine market by region
Profitability of luxury wine
Benefits and challenges of the luxury wine business
Vignette: delivering a vision, the global success of Opus One
4. LUXURY WINE CONSUMERS
Who is the luxury consumer? Motivations and perceptions
Luxury consumer segmentation
Global differences in luxury consumers
Analyzing the luxury wine buyer
Creation of a luxury wine consumer segmentation
Vignette: Château Lafite Rothschild taps into consumer desires
5. HOW LUXURY WINE STRATEGY WORKS
Standing out from the crowd
A pyramid approach to strategy
Vision provides the North Star
Strategy – the where and how to compete
The 5P+S of luxury wine marketing
Tactics and initiatives – implementation
Luxury wine business models
Measurement is the key to success
Managing luxury wine and keeping the brand fresh
Vignette: Guigal – building a luxury wine empire with a long-term view
6. CRAFTING THE LUXURY WINE PRODUCT
Eight critical elements of the luxury wine product
Sacred location for high quality
Master vigneron and team
Balance of nature and technology
Quality craftsmanship to highlight the vintage
Aging with grace
Art of the blend
Authentic luxury service
Entry level for dreamers
Vignette: crafting the product
of Domaine de la Romanée-Conti
7. SETTING LUXURY WINE PRICING
The importance of pricing luxury wine
The luxury wine price continuum
Determining pricing structure
Price evolution: the implications of changing pricing on luxury wines
Bordeaux en primeur: a market-based pricing system
Second labels: a method for luxury wine price reductions
Vignette: Harlan Estate – creating global scarcity to preserve pricing power
8. TELLING THE LUXURY WINE STORY
Defining the luxury wine brand story
Research on the power of brand storytelling
Key components of the brand story – setting, characters, plot, moral
A symbol arising from the story
Crafting a distinctive luxury wine story or adding a new chapter
Focus on craftsmanship and authenticity
Importance of the human element – building relationships through storytelling
Communicating consistency, integrity, and humility
Delivering the story
Vignette: master storytelling at Tenuta Tignanello, Italy
9. LUXURY WINE PACKAGING
The importance of luxury packaging
Luxury bottles – from historic to futuristic smart bottles
The luxury closure – to cork or not?
Consumer research on label design
Luxury boxes and containers – environmentally friendly
Tracking and shipping considerations
Dos and don’ts of luxury wine packaging
Vignette: crystal clear Cristal
10. MANAGING SCARCITY AND PLACEMENT
The importance of managing scarcity and placement
Overview of DTC and trade placement
Direct to consumer sales channels
Trade sales channels
Vignette: Vega Sicilia – the original allocated offering
11. PROMOTING LUXURY WINE
Promoting luxury softly
How luxury promotion is different from commercial wine promotion
Luxury wine promotion toolkit
Launching a new luxury wine product
Vignette: the Berlin tasting – establishing Chilean wine in the luxury marketplace
12. LUXURY WINE MANAGEMENT
It is always about the people
Sales and marketing convergence
Building long-term relationships with customers
Continuous improvement
Motivating luxury employees
Succession planning
Vignette: Artemis Domaines – driving beyond a first growth
13. MANAGING THE SECONDARY MARKET AND COUNTERFEITS
Secondary market overview
The auction market
Major auction houses
Auction buyers
Retailers in the secondary market
Managing the secondary market
Counterfeits
Preventing counterfeits
Vignette: Pétrus – the world’s most counterfeited wine
14. KEEPING THE LUXURY BRAND FRESH
The importance of long-term vision
Traditional ways of keeping the brand fresh
Staying relevant in a changing world
Penfolds: innovation and collaboration to keep the brand fresh
Managing through an economic downturn
Vignette: the continual evolution of Gaja
References
About the authors
Index
FOREWORD
BY CLIVE COATES, MW
The world of fine wine has never been so vibrant and so healthy. Yes, the wines are more and more expensive. That is the inevitable consequence of the laws of supply and demand. But the number of wines and domaines of the very highest quality has never been so large, and the perfectionism of these estates has never been so high.
To take one simple but crucial technique, only in the last thirty years has the concept of triage – the sorting through of the fruit on arrival at the winery to eliminate the unripe, the over-ripe, and the rotten – been undertaken with any seriousness. After all, you cannot make the very best wine without the healthiest and ripest fruit in the first place. To take another, Burgundian, example, in the 1980s there were only, say, half a dozen domaines in Gevrey-Chambertin who bottled and marketed their own wine. Today, there are many more. Elsewhere, Bordeaux and Napa Valley have also been early adopters of optical sorters and winery management software that has enabled continued advancement in wine quality.
Anyone with premier or grand cru vines wishes to exploit them themselves. What can be more conducive to the highest quality than to put your own name on the label, where its quality can be pronounced upon by the world’s press and noticed by the trade and consumer? Moreover, there are more and more estates in parts of the world not renowned hitherto for fine wine which today deserve consideration. The choice is enormous, which requires clear and distinctive marketing to be heard. Luxury Wine Marketing creates a bridge for the ever-growing band of fine wines globally. We live in exciting times!
ACKNOWLEDGEMENTS
There are so many people we would like to thank and acknowledge for assisting us in the development of this book. First, we would like to express our appreciation to all of the wineries, distributors, retailers, importers, exporters, wine business researchers, luxury wine consumers, and other professionals in the global wine industry who took the time to meet with us to answer questions and review sections of the manuscript. Without their time and patience this book could not have been developed.
Our publisher, Infinite Ideas, based in Oxford, England, is high on our gratitude list, because Richard Burton, CEO, was willing to take a chance on publishing a book that has a very specific audience. Thank you, Richard! Also special thanks to Rebecca Clare, Editorial Director, for her responsiveness and patience with us as we consulted on book design cover, formatting, and proofreading. Likewise, we extend gratitude to the wineries who gave permission for us to publish their wine labels and bottle shots in the book.
We would also like to extend a huge round of applause and thanks to Alexandra James, our Sonoma State University (SSU) student intern who assisted us in developing the database of more than 8,500 luxury wines around the world, representing over 1,200 luxury wine brands. Her double concentration in Wine Business and Finance was very useful in assisting with this important research project. We are happy to say that Alexandra has now graduated from SSU with a B.S. degree and is blissfully working in the California wine industry.
We extend a very grateful thank you to our families, friends, and colleagues who supported us through the years of writing this book. They were always positive and patient with us as we spent long days and some nights typing at the computer.
Peter: This book is dedicated to the female mentors in my life – my mother, grandmothers, Susan Wuerer, Clair Brown, and Liz – who have taught and inspired me with the meaning and value of resiliency, humility, and hope. I would also like to thank Lauren McPhate and Ana Margarida for their assistance in filling data gaps for the Luxury Wine Database and my current and former colleagues at Kosta Bowne Winery and Realm Cellars, who have taught me a tremendous amount about luxury wine.
Liz: Special thanks to my husband Michael, daughter Zia, and supporting relatives and friends. Also to all of my wonderful wine business students at Sonoma State University, along with our industry supporters who donated funds to the SSU Wine Business Institute that partially supported some of the research required to write this book. Finally, much gratitude to my fellow SSU professors and staff, as well as my friends, colleagues, and mentees in the Institute of Masters of Wine.
INTRODUCTION
It was wine education that brought us together. When Peter was studying for the Wine & Spirit Education Trust’s Diploma program, one name kept coming up in the business of wine – Dr. Liz Thach, MW. When Peter started working with luxury wine brands, he realized how different luxury wine was from commercial wine as a business, and also how little information and research there was out there in the market. At the same time, Liz was getting a lot of requests around luxury wine and it was becoming a topic of interest for her research. Serendipitously, in 2015 Peter reached out to Liz to see if there was an opportunity to collaborate and build knowledge together on luxury wine. That was the beginning of the journey. A couple of years into it, Peter suggested they should write a book on the topic, and this is the product of those four years of effort.
Having seen not only the explosion of luxury wine around the world – and at home in California – but also how knowledge on how to sell and market luxury wine was scattered and anecdotal, we set out to try and establish a baseline of knowledge. This began with an extensive review of the existing research literature on luxury products in general as well as what little had been published on luxury wine. Next, we spent several years interviewing luxury wine executives, producers, marketers, distributors, importers, and other experts around the globe to gather firsthand knowledge of what works and does not work in luxury wine marketing. At the same time, we conducted two online surveys with an attempt to profile the luxury wine consumer, including their values, motivations, lifestyle preferences, and demographics. Another major piece of our research was to develop a database of 8,500 global luxury wines from over 1,200 luxury wine brands so that we could analyze the size and composition of the luxury wine market, a first of its kind. Through all of this, we were able to compile best practices and strategic tactics for what we call the art and science of luxury wine branding.
The goal of this book is to help the industry move forward and innovate more quickly by laying out current best practices. We have strived to do this in a clear and simple manner. We hope this book is educational, useful, entertaining, and enduring; that it helps improve your business and can provide a roadmap for improvement, in all economic environments. Experts have reported that in the past several recessions wealthy customers continued to purchase luxury products, including wine. One of the keys to success in all economic environments is continual improvement. It is a theme throughout the book and we hope you take that to your business and give back to the industry we are all lucky to be a part of.
To constant evolution
Peter and Liz
1
LUXURY WINE DEFINED
Visiting the great châteaux of Bordeaux is a dream to which most luxury wine consumers aspire. One of the most special is Cos d’Estournel, located on the Left Bank in the northern appellation of Saint-Estèphe. As the visitor drives through the perfectly sculptured vineyards of Pauillac the road rises slightly and, cresting a small knoll, the towering Indian-inspired pagodas of Cos d’Estournel come into view. Approaching the enormous wooden front door, the image of a castle arises, but this château is unlike any castle in Europe – with its fanciful arches and stone carvings, it has a closer resemblance to the Taj Mahal. Stepping into the inner sanctum, the space opens into a modern lounge, replete with Indian motifs, including statues of elephants, bamboo lounge chairs, and ornate reliefs carved into the wood. A sense of anticipation swirls through the air, and the visitor feels as if they have entered a magical place.
An elegantly dressed Frenchwoman in a navy dress, with a Cos d’Estournel silk scarf tied expertly at her neck, welcomes the visitor and explains the history of the château. Established by Louis Gaspard d’Estournel in 1811, he preferred to sell his wine directly to consumers, with a large portion exported to India. It was during his many visits to that country that he became enamored with the architecture, and incorporated many Indian design elements into the château.
However, when entering the modernized wine cellars, there is an abrupt shift from the elegance of ancient India to a scene reminiscent of an alien spacecraft. Most visitors gasp and catch their breath in astonishment at the complete change in scenery. Massive conical stainless steel tanks are lined up in neatly organized rows, their silver color shining in the dim light of the cellar. Huge catwalks tower above, and the hum of humidifiers and air conditioners fill the air. The scene is almost eerie, like walking into a movie set from The Wizard of Oz.
Upstairs there is a clear glass walkway providing a dizzying view of the barrel cellar underneath. The lights are purposefully dimmed to enhance the sense of walking on air. There is the sound of soft clinking as workers below move hoses to rack barrels, providing the visitor with a temporary sense that they are members of a royal family observing their kingdom and workforce from above. The glass pathway continues, leading to a treasure hidden behind another door. Slowly the door opens into a temple of wine – the château’s library of wines, with the Indian motif as a backlit display. Here the history of the château is encapsulated in every bottle, a message delivered with each vintage.
The tour concludes in the tasting salon where the visitor is allowed to taste both the Grand Vin and the near-equally compelling Second Wine, Les Pagodes de Cos. However, unlike many other winery tasting rooms around the world, wine cannot be purchased here because it is carefully allocated. Instead the taste is designed to tease and entice the visitor to want more – to dream about and seek out the special luxury wine at a high-end wine shop back home or an online auction.
THE LUXURY WINE EXPERIENCE
This story, about a luxury wine experience at Cos d’Estournel, is similar to other stories around the world where a consumer has an experience with wine that enchants them. It could be as simple as sharing a glass of wine with someone who is a wine collector, or being introduced to wine by a friend. It could be a parent’s gentle tutelage about wine, or the result of traveling the world and learning about the magic of food and wine combinations.
Regardless of how a consumer enters the wine category, it is usually the story of the wine brand that captures the attention and can lead to a desire for more wine and, eventually, luxury wine. Therefore, when a winery wants to learn about the art and science of luxury wine branding, or to enhance an existing luxury wine brand, it is critical that the story emphasize what is unique about the wine, as well as provide the consumer with a sense of pleasure and privilege.
The story of Cos d’Estournel, with its Indian design set in the heart of Bordeaux, is unique and helps to differentiate it from other Grand Cru visits. The intimately crafted details and aesthetics create a setting that is well suited to the brand and its storied history. Visitors cannot help but depart with a feeling of privilege for being allowed to visit the enchanted kingdom, and the memory will remain with them for a lifetime, recounted to friends and family as an unforgettable and pleasurable experience.
LUXURY WINE: LUXURIOUSLY DEFINED
The French term elevage, meaning to be grown or reared, with regard to winemaking is a good starting point for understanding what luxury wine is. The wine world at the highly commercial end is made up of manufactured commodities, wines made by formula and at industrial scale, often to great effect, but manufactured more than grown. The other extreme is the small farmer, meticulously tending to his or her small plot and raising
the wines from the vineyard to the cellar to the bottle. Though luxury wine is the opposite of a commercially manufactured product, that still does not fully encapsulate the definition of luxury wine.
In order to define luxury wine, it is useful to begin with some basic definitions of the term luxury.
Merriam-Webster provides the following:
1. a condition of abundance or great ease and comfort: sumptuous environment // lived in luxury
2. a: something adding to pleasure or comfort but not absolutely necessary //one of life’s luxuries
b: an indulgence in something that provides pleasure, satisfaction, or ease // had the luxury of rejecting a handful of job offers
These definitions showcase that luxury should provide a sense of a sumptuous lifestyle, refinement, privilege, and pleasure. However, it is also instructive to examine luxury from an economic standpoint. In his book Macroeconomic Analysis, Hal Varian states that a luxury good is a good for which demand increases more than proportionally as income rises.
This definition adds the element of high price and scarcity to the mix. Therefore, when all of these concepts are combined, some boundaries are created around what luxury wine is.
DEFINITION OF LUXURY WINE
Luxury wine is of the highest quality, coming from a special place on earth, has an element of scarcity, an elevated price, and provides a sense of privilege and pleasure to the owner.
THE SIX ATTRIBUTES OF LUXURY WINE
The above definition can be further explained by delving more deeply into the six attributes of quality, place, scarcity, price, privilege, and pleasure.
1. Highest level of quality – globally recognized for producing a wine of the highest quality that can age and is suitable for cellaring. Must have achieved this for a long period of time with consistency – at least twenty years – proving the unique heritage of the brand.
2. Coming from a special place – recognized as coming from a special wine-grape-growing region with cultural significance. High-quality grape vines can only be grown in unique places in the world that have a special climate and soil. Many of these locations have long been recognized as supreme wine-grape-growing areas and have a strong sense of heritage.
3. Sense of scarcity – part of the branding component of luxury wine is that it is difficult to obtain, which can be developed through actual scarcity (hard to find), perceived scarcity (barriers to purchase), or price (so expensive it feels scarce). Often luxury wine has the ability to achieve higher prices on the secondary market.
4. Elevated price point – a foundational element of luxury wine, high price creates a barrier to purchase, higher perceived quality, and, if sustainable, higher willingness to pay by consumers. Generally speaking, luxury wines should be $100/bottle or greater in US retail.
5. Provides a sense of privilege – part of the exclusivity of luxury, be it from price, scarcity, or the symbolic nature of the brand and product is the status it confers on the owner, or in this case, drinker. This provides a sense of privilege to be able to partake in a wine that few others may have the opportunity to enjoy. The bottles in the cellar are the envy of other wine geeks globally. Luxury, by its definition, is a privilege, and wine is no exception.
6. Provokes pleasure – provides an aesthetically pleasing experience by viewing the bottle/collection and showing it to others. Also provides a hedonistic experience through consumption.
THE GROWING IMPORTANCE OF SUSTAINABILITY
Having both the highest level of quality and coming from a special place, luxury wines exhibit a character common amongst many luxury products, which Kapferer and Bastien describe in Luxury Strategy as timeless
– the ability to be relevant decades from when the product was produced. When this is applied to wine, several elements come into play. The ability to improve with age and be of consistently high quality are both fundamental elements of luxury wine. Being relevant over a sustained period of time, to produce the highest quality, creates the special places where luxury wine is grown. For all those attributes to flow into luxury wine, both the viticultural and winemaking practices must be increasingly sustainable, often incorporating elements of organics, biodynamics, and environmentally sustainable practices. If they are not, the land and the vines will no longer have the energy or the nutrients to consistently, continually, produce the quality necessary for a luxury wine. Interestingly, most luxury wines do not aggressively market themselves as organic or biodynamic, though most utilize those practices, in order to focus on their brand and the quality of their product as opposed to the farming methods.
A similar case can be made for economic sustainability as well. Without generating strong enough returns to survive, the winegrower will no longer be able to continue producing top-quality wine. For luxury wine, this is embedded in the elevated price, as crafting luxury wine with meticulous care often requires a great deal of investment in facilities, tools, and labor.
WHAT LUXURY WINE IS NOT
Just as important to understand what luxury wine is, is to understand what it is not. The world of wine is privy to trends like the fashion industry, technological revolutions on par with the digital revolution for an agricultural industry, and instantaneous hits similar to food fads – yet luxury wine separates itself as being classic and timeless. It may be easy to consider wines marketed with a luxury lifestyle component – advertisements set on yachts or in high-end clubs – as luxury wines, but more often than not they fail to live up to the definition of luxury wine.
THE LUXURY LIFESTYLE
Often, the term luxury and luxury wine are directly associated with a luxurious lifestyle. Many aspiring luxury wine brands believe they must appear to fit in with a lifestyle of private jets, yachts, and twenty-thousand-dollar watches to be a successful luxury wine. However, the two are not always related. Many top Burgundian producers will often profess that their wines are not luxury, that they are farmers, and their wines are merely an expression of the land. In their way, their marketing focuses on the special place where their wines are grown and their focus on making wines of the highest quality. These wines also happen to cost hundreds of dollars, are limited in production, are scarce, and are sought after by a global set of wine collectors. They fit the definition of luxury wine more easily than other wine brands with multi-million-dollar marketing budgets.
THE LUXURIOUS CULT
A common and confusing subset of fine wine is the notion of cult wines. Cult wines have a rabid, loyal following and are generally very small in production, often with fewer than 2,000 cases produced a year. However, it is possible, given enough time and with consistent high quality over a long period of time, that a cult wine can become a luxury wine. Two good examples of this are Napa Valley’s Screaming Eagle and Harlan Estate, which have built their history and heritage and now firmly belong in the luxury category. They meet all the criteria – high quality, from a special place, elevated price, scarcity, aesthetically pleasing, and imparting a sense of privilege. However, there are equally as many cult wines that do not meet the definition but do have scarcity from low production and a loyal following. This could apply to Frank Cornelissen’s wines from Mount Etna in Sicily and Clos de la Roilette in Beaujolais. Their wines are unique, small production, and high quality, but generally not with an elevated price and are generally appreciated by specific niches of consumers. For example, Cornelissen’s wines are natural with no SO2 used in winemaking and Roilette is a sommelier favorite, partially due to its relative value as a Cru Beaujolais, and would not meet the definition of a luxury wine.
THE VISION BEHIND LUXURY WINE
The vision behind a luxury wine brand is the key element that will define the brand’s ethos. It provides the North Star
for the strategic direction and decisions the brand will make around messaging and marketing. The vision is what brings together all the elements of the luxury wine brand and gives it cohesion and meaning.
Vision can have many shapes and forms in luxury wine. Some brands, like Krug in Champagne, view the luxury lifestyle as inherent in their vision, explicitly promoting the aesthetically pleasing, luxury-lifestyle elements in their marketing. Krug ties music, luxury experiences, and fine dining into all its marketing. Others, such as Vega Sicilia in Ribera del Duero, Spain, built its own unique vision of crafting a unique wine over decades in its 150-year history. It is now symbolic of the entire region and Spain itself, paving the way for the Ribera del Duero appellation and its regulations. Another vision, focused on sustainability, is Nicolas Joly, a leader in the biodynamic movement. The vision for Nicolas Joly is on the sustainability of the land itself, its impact on his specific site, La Coulée de Serrant, and spreading the embrace of biodynamic principles globally.
Sometimes this vision is explicitly set by the wine brand from the start. At other times, it evolves as a construct of history and falls into place over time. However the vision comes about, it is critical in providing a guiding light for how to market a luxury wine brand. The vision establishes guidelines around how to take a wine to the market and what marketing elements make sense for a particular brand. A brand with a vision centered around being a sustainable farmer and steward of the land may seem out of place if served and marketed with non-sustainable food, such as shark. The vision sets the direction from which a strategy can be developed. Both the vision and the strategy must map back to the definition of luxury wine: being of the highest quality, coming from a special place, having a sense of scarcity, having an elevated price, providing a sense of privilege, and bringing pleasure to its owner.
VIGNETTE: THE EPITOME OF LUXURY WINE – DOM PERIGNON
No wine screams luxury like Champagne, and no Champagne is more iconic than Dom Perignon (Dom
). Part of the LVMH (Louis Vuitton Moët Hennessy) group, Dom is a world leader in luxury wine marketing. A vision steeped in the creative, in the world of fine art and music, Dom positions itself as a symbol of the luxury lifestyle.
Wandering onto the perfectly manicured lawn of the Abbey of St Peter, Hautvillers, an expansive view of the rolling hills and vineyards of Champagne opens up. The host escorts the group through a hallway of pristine white marble into an expansive room, shaped like a long rectangle. The large table in the middle feels tiny in the space and grandeur of the room. Three assistants, dressed in black suits, move effortlessly in the background as the last five vintages of Dom Perignon are poured for the group of three people. The host waxes poetically about the intricacies of each vintage and how the wines differ as a result. A small taste is poured in each glass with most of the bottle remaining on the table. The experience is hard to describe as anything but luxury, imbuing the guests with that feeling