Marketing Greek Wine to Consumers in the UK
Wine has become one of the main accompaniments with our everyday meals.
It seems that the British wine drinkers are drinking more and more of their old time favourites. According to the Guardian newspaper, Chardonnay, Cabernet Sauvignon and Merlot account for about 80% of wines sales in the U.K.
The reason for this buyer behaviour could be their availability at competitive prices and occasional wine tasting at supermarkets and wine merchants. Britain itself is not a wine making country, therefore probably one of the biggest wine importers in the world. The article further suggests that French wines comprise of 30% of the wine market in the U.K (in 2001), whereas Australia makes up 15%, half as much as France. Both USA and Spain comprise about 8% of the market each.
The main reason behind the immense popularity of French wines is the general perception that the French know how to make good wine. Perhaps the British have become more accustomed to the exceptional quality and taste of French wine and are reluctant to try and explore new tastes, hence the same buyer behaviour.
Recently, New World countries have started emerging on the wine market scene. These include regions of South Africa, Australia and New Zealand, etc. These countries produce good quality wines and are becoming popular with the U.K consumers.
However, the European or Old World share relies partly on traditional wines, which seem to be going out of fashion with the UK consumer. These include wines such as Vermouth and Sherry. So basically it is the New World wine market and it is the fierce competition that drives the wine sales.
The countries which cope with this pressure well are likely to succeed. Others who seem to have a lax attitude towards marketing, however, have a long way to go and Greece is probably one of them.
This essay touches the marketing issues related to Greek wine in the UK and the general perceptions consumers have in this regard. A few suggestions for improvement are also given towards the end.
2. GENERAL PERCEPTION OF GREEK WINE IN THE U.K
There are different views and perceptions about Greek wine among U.K consumers. With over 600 years of war and occupation of the Ottoman Empire, Greece has faced economic hardship therefore was unable to concentrate on quality wine making. But until recently, and partly due to its membership with the European Community (since 1981), has been able to improve its image of wine making.
In order to explore the myth, that Greek wines are badly made and oxidized or heavily flavoured with pine resin (particularly in the case of Retsina), Joanne Simon set out to explore the Attica and Peloponnese regions of Greece.
The eastern plain of Attica is famous for making wine in bulk, particularly Retsina. Non Greek people usually say that Retsina is an acquired taste, while some consider it to be ‘sappy and turpentine like’. However, it is recommended that Retsina should be tried with Greek cuisine, in its native environment.In her search for an answer, Joanne talked to many producers of wine in that region. According to the Commercial Manager of a family winery, ‘everyone knew Retsina 10 years ago,, but no body knew that Greece could produce good wine’. He claims that his winery, including several others, has recently made a considerable improvement in wine making.
On speaking to the Assistant manager of an Odd Bins U.K, retail outlet, in Greater Manchester, it was discovered that people who have already been to Greece on holiday, tend to come to the shop and ask specifically for Greek wines. Odd Bins has recently listed some good quality Greek wines as a result of personal field visits conducted by experts on behalf of Odd Bins, in an endeavour of getting something new and exciting for the wine lovers to try. He added further that Odd Bins are pioneers of bringing Chilean wines into the market, which are rapidly gaining popularity. The manager is convinced however, that the trend in consumers may shift towards trying Greek wines. The process may be initiated as a result of a promotional wine tasting campaign every month for a different country each time, so at some stage, there is a probability that Greece will play its part there as well. On the other hand however, Victoria Wine, one of UK’s biggest wine merchants, does not stock Greek wines because they only want to concentrate on what the buyers really want.
According to the buyers of one of the largest suppliers to restaurants and pubs,’ Clean, pure, simple wines, make people feel comfortable. Anything too complicated puts them off’.
The image a wine promoted to the consumer also plays an important role. Jancis Robinson describes the image of Greek wines in an interesting way: “It is that of indigenous blends of varieties with modern know how. Those who have tasted Greek wines are impressed. Those who haven’t, dismiss Greece as a Retsina bath”. Gaia Vineyardsis is one of the few companies in Greece attempting to improve the quality and image of restina overseas. However, it is thought that the change of name will also impact sales in the overseas markets.
Looking at evidence so far, it seems that there is a mixed reaction about Greek wines. The main hurdle however is to convince the buyers to go ahead and explore them.
Anglo Hellenic Services are importers of Greek wine in the U.K and are based near Worcestershire. In a conversation with the owner, Nick Contarinis, some general problems, other related issues facing Greek wine and consumers perceptions in the U.K market were highlighted. According to him, most wine is bought by looking at the label and most consumers buy the wrong kind of wine. But if the label says ‘produce of France’, it is usually perceived that it will be good. So it may be argued that people are willing to pay for just the name ‘France’ written on the label. He adds further that countries such as Australia and France have an upper edge, as they have established themselves in the U.K wine market. Their wines are usually subject to wine tasting in supermarkets and they occupy the prime spot in the wine section of those supermarkets. Nick also emphasises the fact that there are only a few producers of good Greek wine, therefore, cannot be produced in bulk. So the wine tends to be towards the expensive side_ another put off factor for the consumer. He argues that it is not that the Greek wines do not taste good; it’s just that they do not know how to market themselves. He therefore strongly suggests more gathering of information regarding the U.K consumer’s tastes and likenesses.
Here were the views of an importer of Greek wines in the U.K. But if the problems are back traced, we can find their roots in Greece itself.
3. THE PRODUCTION OF GREEK WINE
The wine sector in Greece is divided into two, namely, Cooperatives and Private Sector.
The cooperatives usually make wine in bulk and have strengthened ties and close integration with the agricultural sector in Greece. However they face a few management and financial problems.
The private sector concentrates mainly on bottled wine (such as Tsantali, Boutari etc) and is involved in a high level of exports. Small and medium sized firms comprise mostly of the private sector. They face problems of limited production and distribution facilities. This leads to further problems for them such as standardisation of quality.
3.1 Problems associated with production
Some problems being faced by wine producers in Greece have been mentioned briefly above. An important point to be noted here is that consumer preferences have been reoriented towards quality wines such as Domaine, Chateau etc, produced in limited quantities or by small sized firms. Another serious problem is with the cooperatives, which seem to have limited resources. Thirdly, there is the problem of quality control. One of the owners of a winery located in the Northeast of Athens, on the foothill of the Mount Penteli, Anne Kokotos, mentions that in the days if bulk production, no one wanted this particular land because its high altitude made the wine turn out to be low in alcohol and high acidity. She adds that the vineyard has been progressively planted with Sauvignon Blanc and Chardonnay varieties, brought in from abroad, and now production is some 250,000 bottles a year.
According to Constantine Stergides, there is an obvious absence of exciting, fruit driven wines in the mid-price range which is damaging Greek sales in the supermarkets. Basically the above example must be followed by the other wine producers. The need is there for the restructuring of viniculture.i.e by gaining through knowledge of own territory, and invest in cultivating better quality vines, which can result in better raw materials, and hence better products and controlled cost of production, therefore, making spare resources available, for concentration on marketing. Once these problems are dealt with, it will be considerably easy to target the international market.
4. MARKETING PROBLEMS
A serious problem being faced by Greek wine in the U.K is bad marketing and lack of knowledge concerning the U.K consumer. Some of the marketing issues, along with possible suggestions for improvement are outlined as follows.
4.1 Market Research
The most important aspect of a good marketing strategy is market research. Perhaps the New World countries, (i.e. Australia, South Africa) etc in this case are doing rather well in terms of meeting customers expectations. The market research may touch areas such as what the customers want in terms of presentation of the wine labels, and most importantly, the taste. This information may also be used to develop new products for the market at a later stage, once the main problems regarding production and increasing production costs are dealt with.
The prices of Greek wines may be determined by the regulatory aspects in both the country of production, as well as the country of export. Within five years, the value added tax on alcoholic drinks has risen from 6% to 18%, which has had a significant impact on the consumption of wine. It is worth mentioning here that due to this reason, there may be a shift towards drinking of other drinks particularly at meal times, such as beer, or something non-alcoholic altogether, such as soft drinks, which are extremely popular with the young generation. Coming to the point, some Greek wine producers argue that the U.K is a difficult market as importers want to pay £2 for a bottle which takes £2.50 to make. Another producer argues that the best price, making provisions for cost of production, VAT and duty, is approximately £7.
This was one aspect of pricing. The other aspect, discussed in sections 3 and 3.1, is the increased cost of production.
4.3. Packaging and branding
Packaging and branding plays a very important role in the consumer’s buying process. But unfortunately, not much is being done by the Greeks in this regard. According to a source, a wine producer complained, that just designing s new label sometimes took more work than the cellar. This proves that there is lack of interest and knowledge in the perfection of this marketing aspect. The solution to this problem may be to design labels which are consumer friendly and very simple. The help of marketing management consultants, based in the UK may be required, to help with this, as they would be better aware of the wants of the UK consumer. There are such companies based in the UK, and one of them, MPC associates, help wineries from around the world to maximise the sales of their wines in the UK.
They insist, that in order to be successful, strong emphasis should be paid on the taste, i.e. developing the right taste for the UK consumer therefore conducting considerable research and development before hand. Other important very technical issues they suggest is laboratory testing the wine, and comparing them to its competitors, paying attention to the contents, i.e. in terms of the wine being oxidised, mouldy, acidic etc. The key activity in the background suggests continuous improvement until the desired taste is reached. The emphasis is on quality. MPC associates strongly emphasise that the UK supermarkets are highly critical organisations and unless the quality of wines is good, there is no way a strategically important shelf place will be allocated to that particular wine.
Another suggestion could be to change the names of the wines. Usually Greek wines are named in Greek which may be somewhat hard to pronounce, let alone be remembered by the consumers. On the other hand, Sauvignon Blanc, Cabernet etc are varieties of grapes and wines are usually named after them. These names have a French feel to it, even though as mentioned earlier, these varieties are now also being cultivated in Greece. The mere French feel to the name may be quite attractive to the consumer, therefore an encouraging factor. An alternative suggestion could be to name the wines in words which emphasise purity, and simplicity.
4.4. Extensive Promotions
The key factor for Greek wines is their extensive promotion, in the press. According to MPC associates, most international wineries want to enter into the UK market with the perception that they will win their consumers with extensive promotions, which causes them disappointment. The fact of the matter is that promotion has its utmost importance, but preliminary research is a prerequisite of a good promotional campaign.
There is another problem that there seems to be reluctance for specialists to invest in Greek wines, while Odd bins are quite heavily involved in this area. It seems that Odd bins are trying to break the misconception that Greeks cannot make wine. However, despite this popularity, the market share of Greek wines still remains negligible.
In terms of volume of wine bottles produced, according to a source, Greece comes in the medium sized category. It is there for difficult to obtain distribution on large levels. There are problems associated with viniculture itself and with the example of a winery, things are progressing well.
There is a potential for Greek wine to cater for a niche market, which can compromise on quantity but not on quality. Meaning establishing a market, taking into account consumers who enjoy excellent food and wine but willing to pay a high price for it.
4.6. Exploring buyers at different levels
It seems evident from the review of the situation so far, that it is difficult to enter the supermarket scene. However, there are other channels which can be explored in order to promote Greek wine. It is the general conception that Greek wine goes well with Greek cuisine. Therefore, involving Greek Restaurants and specialist Greek shops in the process and looking into the possibility of holding wine tasting promotional events at such venues could prove beneficial.
4.7. The Tourism Industry
The tourism industry may help indirectly in resolving the image problem that Greek wines face. Over the past few years, the Greek Islands have become a very popular holiday resort, especially for British tourists. Various holiday companies may help to promote and organise wine tasting holidays, so the tourists have a chance to judge for themselves, what Greece has to offer them, in terms of wine.
Usually tourists find Greece attractive in the way holiday companies promote its image. The key could lie in attracting tourists to Greece, so they can try and explore new tastes and get rid of the misconception that the Greeks do not know how to make wine.
5. CONCLUDING REMARKS
We have seen that there are only a limited number of small sized wineries, in Greece, which produce good quality wine in order to cater the U.K Market. The root cause of the problem lies in the production facilities.
The wineries should carefully observe their wine making processes and be attentive to strict quality control measures. This is the first step in improving the image of the wine itself. The highest of quality will help target various distributors on different levels such as wine merchants and supermarkets.
Next is tackling the problem of packaging. The key issue before designing an appropriate bottle label would be to get a complete insight of the wants of the UK consumer. This may be done by carrying out preliminary research, or done with the help of Marketing Management consultants, many of which are based in the UK.
The other hurdle to cross is to make appropriate use of promotional activities. Other countries have carried out extensive marketing promotions whereas Greece seems lax in this endeavour. According to Nick Contarinis, an importer of Greek wine in the UK, the Greeks dislike competition, therefore are reluctant to fight back. He stresses however that it is about time to adopt a proactive approach to marketing.
Some wineries have identified the problems related to production and their eventual consequences and have made appropriate changes in their business processes, therefore ending up with better raw materials and thus improved finished products in accordance with the tastes of the UK consumer.
The resolution of these problems is an uphill task but has to be undertaken. Gradually, the confidence among some Greek producers is building up, that better times are around the corner.
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Lawrence F, Britain’s world-beating thirst for wine. The Guardian. February 19, 2003
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Robinson J, The Importance of Image. www.jancisrobinson.com
Simon J, Grecian Turns. Harpers News. www.harpers-wine.com
Messini C, the Greek Wine Industry. A study for the Sectoral Research Department of the Foundation for Economic and Industrial Research (IOBE) January 1997
MPC Associates, marketing and management consultants. www.mpcassociates.com/wines_and_spirits.htm