December 2, 2005
stormhoek rant
I had just had a big ol' rant over at the Stormhoek blog:
BOGOF (Buy One Get One Free) is the UK wine industry’s drug of choice these days. The promotional mechanics take various half-price forms, but they revolve around wines sold briefly at prices like 7.99, then “promoted” at what cynics would call their "real" price, of 3.99.As the Stormhoek blog is read by a lot of their customers (i.e. the supermarkets who do a lot of the BOGOF stuff) this could be be considered rather contentious. Hopefully the other Stormhoek folk won't have a problem with it.The question that nobody seems to be asking is: Do half-priced features violate the trust of the consumer? Does it undermine the market for premium wine? How is the producer and retailer trade going to end a practice that moves so much volume on what many would consider to be a less than objective practice?
With English Cut ticking away nicely, most of my time these days is spent thinking about the wine business.
I am not a wine geek. I drink it often enough, but I wouldn't say it was one of my passions. However the marketing of it, I find utterly fascinating. Even a company like Gallo, with its tens of millions spent on advertising and virtually unlimited resources, only has a 2% total market share. So there's a lot of opportunity in the remaining 98%.
Stormhoek had nothing two years ago. Now, for South African wines retailing at over £5.00, it has a 20% UK market share. When it launches in the US in the first quarter of 2006, we hope for a similar chunk of the business, eventually.
[Definition of Business Porn:] "I am blogging this from my yacht..."
I have to say, I never, ever thought I would end up in either the tailoring or the wine business. A year ago, I was gearing up to become an over-priced marketing porn consultant. I am so glad that never happened.
Posted by hugh macleod at December 2, 2005 9:54 AM | TrackBackReally, 20%?
Um... if Gallo has only 2% then I seriously doubt Stormhoek could produce (much less sell) enough wine to cover 20% of the US market in any price category. Even if the 2% is global market share.
Care to break down those numbers a bit?
Posted by: frosty at December 2, 2005 7:39 PMGallo has an overall 2% market share of the entire wine market in the UK, in terms of cases sold.
Stormhoek has a 20% market share in the UK of all wines that (A) are from South Africa and (B) retail for more than £5 (about $10 US).
Posted by: hugh macleod at December 2, 2005 7:49 PMGreat news, Hugh
Out of interest (we're beginning work for a winery in Ontario) do you know that entire market share for wines from SA?
Posted by: Andreas Duess at December 3, 2005 12:58 PMSadly, Andreas, I do not. (I know, I know, I should etc). What I do know is this:
"Small, but growing very fast overall".
Posted by: hugh macleod at December 3, 2005 1:06 PMP.S. Congrats on the winery gig =)
Posted by: hugh macleod at December 3, 2005 1:07 PMA few questions/comments:
1. I really like the project, great way to get a bunch of heads together to work on something that is typically very internal (within a company.)
2. In reading the Part1/Part2 posts, I don't completely buy the 'vibe' you are shooting for. Apple? Google? I agree that something out of the box is called for, but this doesn't sound like the right landing point.
After all, at the end of the day it is still about the wine, right? Great marketing is more than catering to some lifestyle (real or fantasy), it is first about informing the customer of the actual product or service being offered. To say otherwise is a discredit to the company IMO, and a discredit to the Cluetrain Manifesto.
3. That being said, there is a great opportunity to differentiate Stormhoek via new marketing methods, rather than a new label that is uber-blogosphere.
Perhaps I am reading too much into your comments about this...
In going to Stormhoek's site, I see the blog but not sure it's so much to get geeked up about, or if it significantly affects my perception of Stormhoek. Actually, some more site organization or persistent links to certain pages would help (link to freshness post, member bios, photos of the company, how we make wine, etc...)
BTW- The manifesto is pretty nice, and I largely buy it. But I want Stormhoek to show me, not just tell me. Otherwise it will be no diffferent than so many other mission statements. If you show me, then I might actually feel the passion for the company that you are trying to impart.
4. Besides the attitude of the company, what exactly differentiates them from other wines? Or perhaps a better question is what differentiates SA wine from other wines? That would seem like a potentially good differentiator.
The other main differentiator I see is the freshness thing, as the company seems to be pushing it pretty hard on the label and in their blog. I would rather drink a bottle of fresh wine (if I know it matters), than a bottle of blogger wine. The internet and blogs are are great marketing tools, but not necessarily a great brand hook (have I beat this one to death yet?)
So I think a graphic design that emphasizes freshness might be a good possibility. A catchy label of course to grab customer's attention, and further enhanced by whatever internet marketing tools you want to use.
5. Distribution- if a huge company like Gallo only has 2% share, perhaps there are some distribution factors in play? It would seem that marketing to the buyers for the stores would have a large role in this, and there might be some novel marketing approaches there too.
6. One reason why people forget the brand of the $8 bottle they drank last nite (even if it was good) is that they just don't care that much. Even a catchy label can be iffy. I might remember the label, but not remember if that was the good bottle I just had, or the bad one (this has happened to me at Trader Joe's.)
7. I would make the www.stormhoek.com prominent somewhere on the label (of course.) But in addition, you might want to get a easier-to-remember domain name (freshnessmatters.com, etc.) because no one is going to remember Stormhoek.com (spelling is too hard.) BTW- freshnessmatters.com is actually available, believe it or not...
In that 3 seconds, a consumer will largely be making a gut reaction from a tiny label whether to pick up that bottle and maybe buy it. A catchy graphic might help convince the customer to pick the bottle up, a catchy domain might help convince the customer to check out the web site later (perhaps even if he/she didn't pick up the bottle.)