Posted on | July 22, 2014
Written by | Jeff Siegel
Columbia Crest’s Grand Estate line of wines is a best-seller at Kreston Wine & Spirits, but owner Bob Kreston did a double take when a shipment arrived not that long ago. “I thought it was a mis-shipment,” recalls Kreston, who owns two full-service stores in Dover, Delaware. “I was ready to send it back, tell them I hadn’t ordered that. And if I was confused… I had customers coming up to me to ask why we had stopped carrying Columbia Crest.”
The new Grand Estate label, with its shield shape, clean lines and dominant “C,” was night-to-day from the old one. “Sometimes I wonder,” says Kreston, “why they need to fix something that isn’t broken.”
That’s a question that more and more retailers are asking—more and more often. It may be that a brand that has fallen out of favor, or they may be aiming at a different demographic target. Some suppliers make small changes to their labels regularly, as part of an overall marketing plan. While the motivations may be diverse, the packaging adjustments can add up—and it’s retailers who wind up having to deal with it.
In fact, say a number of branding and marketing experts, this re-jiggering is likely to continue apace. Producers (and not just the multinationals) are bigger, have deeper pockets, and are better able to revise their brands when they see a need. Also, as the number of wine SKUs, which may be high as 15,000, continues to grow, producers large and small will keep striving to stand out from the pack.
Label tweaks are generally more common than wholesale changes, notes Courtney Holmes of Talk is Sheep Marketing in Sacramento: “The goal is to shake the brands up, and sometimes they achieve the objective, but some don’t. But when they confuse the buyers, they’re not helping themselves.”
A wine’s label is its identity, and in a category where consumers are often faced with a literal wall of wine, many shoppers are more likely to remember the label rather than the name of the product (or recognize). Says Chris Battista, who owns the 7,500-square-foot Ledgebrook Spirit Shop in Winsted, CT, “A decent amount of consumers, they don’t know a lot about wine, but the label will catch them up to what they’ve bought in the past.”
Scott Stern, of the CBX marketing consultancy in New York City, who has worked with drinks companies Allied Domecq, Miller Brands, LVMH and Gallo, points out that wine makeovers are a special case. With typical consumer goods, the consumer is the primary target audience for the new label. In wine, though, thanks to the three-tier distribution system, a new label first has to appeal to the distributor, says Stern, and the retailer almost as much as the distributor.
“The distributor has to buy in to what’s going on. They have to be excited about what’s happening,” says Stern. “Otherwise, they don’t have any motivation about the new label.”
Carmen Castaldi, senior vice president of sales and marketing at Rodney Strong Wine Estates in Healdsburg, CA, says “distributor fatigue” is an ongoing concern for suppliers. “And it’s a vicious circle,” he adds. “They have so many SKUs that they’re cutting them, so when someone says, ‘Sell our wine,’ they need a good, compelling reason to do so.”
Hence, the pressure to re-jigger a product to earn the attention of the distributor, who then, at least in theory, transfers enthusiasm for the new look to the retailer. Unfortunately, word of Columbia Crest’s new label never made it to Bob Kreston before the first case of “C” wine arrived.
Retailers, to their credit, say they understand much of what is going on and why it is happening. But they still have concerns—not only for themselves, but for their customers.
“Some brands may need a boost,” says Megan Shervin, a partner in the 5,400-square-foot The Liquor Store in Jackson Hole, Wyoming. “Normally, when someone changes a label, they’re changing the face of their brand. So they wouldn’t go to all that trouble unless they really needed to. But it’s scary when they do it. We changed the store’s logo after 29 years, and I know how much trouble that was.”
CBX’s Stern cautions that brands who leave retailers out of the makeover process risk having their wine suffer as a result. Understandably, Kreston wonders why brands publicize their changes to the media and distributors, so why not at the retail front line, with straightforward POS material? “I’ve always thought a case card with the two labels—what it was and what it is—would help people recognize the new label,” he says.
Chris Battista, in Connecticut, shares Kreston’s frustration: “I’m seeing new products almost weekly,” says Battista. “The distributors are choked up. Is this a new wine, or the same juice with a new label?”
It’s surprising that suppliers don’t consistently make a more concerted effort to pre-publicize a label change. Because the whole idea of a re-jiggered label is to sell more wine. And retailers, distributors and suppliers all like the idea of that.