Saturday, July 28, 2007

Wine Therapy

"Anti-wrinkle cream there may be, but anti-fat-b*stard cream there is not" Dave

What is "Wine Therapy"?

This is a detox treatment for the serious oenophile (wine lover), but with a difference. Instead of focusing on the consumption of wine, this is about those parts your regular tipple just can't reach.

Wine Therapy (Oenotherapy, Vino Terapia, ... etc.) claims to take the health benefits of wine to a new level by slapping them on your face, rubbing them on your skin or reducing them to a pill format that you can swallow without having to swirl.

Sound like fun yet?

I was recently invited to such a treatment whilst visiting Rioja. My treatment involved turning up at a spa, dressing only in the flimsiest shorts on Earth, and lying on a plastic sheet on a heated bed. Pretty dodgy so far.

Next, my therapist slathered my skin with a mixture made from honey & the tartrate deposits from wine barrels. How these "polyphenol rich deposits" (or something like that) are supposed to pass their antioxidant, and therefore anti-ageing, properties to me I'm not sure. However, having gritty goo rubbed all over you for 40 minutes is surprisingly enjoyable.

Next comes the wrap. Feeling like a certain overweight character about to do a Full Monty, I lay there wrapped in that plastic sheet to "absorb" (and sweat) whilst more vinous treatments were applied to my feet.

Next a strong mit and a shower, ready for the oil rub (I think there was some grape must extract there somewhere). Finally, feeling all rosy and fresh, I was served a delicate infusion (no grapes, and certainly no wine) and told to swallow a Resveratrol pill made from the concentration of grape skins and pips.

I must admit I felt good, but any form of massage and skin treatment would do that. As for any "health benefits" from the natural properties of grapes ... well, maybe there was, and maybe there wasn't, but I think I'd still rather take my grape-based medicine by the glass-full instead.

Monday, July 09, 2007

Cost of wine on the High Street

Once again Peter has challenged me, so here is my response on excess drinking and the cost of business. Thanks Peter!

I mentioned that I thought the Threshers "3 for 2" campaign was a good thing, to which Peter asks:

"So you don't agree with recent claims that such offers encourage binge drinking?"

In general terms no, I don't agree that a "3 for 2" encourages binge drinking. I am still of the opinion that all consumers (who can legally buy alcohol) should be treated as reasonable and responsible adults. I really don't like this government's campaign to control personal decision-making in all sorts of areas and not just alcohol.

Do you think that Majestic insisting on people buying a case of 12 is 4 times as bad as Thresher? Of course not. Binge drinking is an issue I'm sure, but restricting the sale of these products is not the answer.

So, assuming people can buy more than one bottle without drinking them all at once, why should we encourage this?

"The real problem with Threshers is that the single bottle price is so inflated. With Tesco, their instore prices are equivalent to the discounted Threshers price, and so an additional 30% is a deep discount."

The issue is cost and convenience. Threshers operates out of small shops on high streets. They specialise in certain types of wines, those the consumer is familiar with and wants to buy fairly regularly. This means that they are not competing with independent wine specialists whose niche are small production, probably higher cost wines, but directly with the supermarkets who sell the same wines. Of course the supermarkets can afford to get prices very low because they have bulk buying power and other economies of scale.

So where does it leave Threshers? We cannot really expect them to be able to sell the exact same wine as Tesco for the same price can we? Why should they? We really ought to be prepared to pay a premium of some sort to be able to buy that single bottle of wine on our way home without having to negotiate all the aisles and checkouts of the supermarket.

They could have left it at that, and maybe survived, but the pressure would have been ongoing (arguably what is happening to Oddbins). So instead, they have a contract of sorts with their customers that goes something like this:

"If you are prepared to buy in slightly greater volume (thus increasing our cash flow and turnover of bottles), we will reduce our total price to you to be in line with those places you might otherwise shop"

That is obviously too complicated a message, but anyone can understand "3 for 2" and it is therefore a good marketing concept. Do I begrudge them trying to survive? Not at all. You can still buy that single "emergency" bottle on the way to the party, or after a tough day or whatever. If you think that premium is too much, you can still go to the supermarket instead.

No-one criticises Majestic in the same way for a vaguely similar model, quite the opposite. In fact their prices are also more or less in line with other retailers but only because they demand that you buy in volume. They won't even allow that single bottle purchase. Surely this is something we could praise Threshers for?

When Tesco, Sainsburys et al offer a further 25% or 30% discount, Threshers and other smaller retailers simply cannot compete and still make money. However, they have to find ways to stay in touch as they still need to trade. Where I have the problem, as I have raised elsewhere, is when they try to do so by 'bamboozling' customers by talking about percentage discounts instead. I would like to see them try and find a differentiator that was not price and discount driven instead (as discussed many moons ago here and here) - it seems a sensible suggestion for longer term differentiation.

I should state for the record that indirectly I am involved as a supplier to Threshers (as well as Tesco, Sainsburys, Majestic and many others), but that my views on this are quite definitely my own and presented in the spirit of improving wine knowledge and discussion rather than promoting or knocking any specific retailer or wine.

Thursday, July 05, 2007

Threshers' incredible disappearing discount

Now this is the kind of thing that brings marketing a bad name.

At Christmas Threshers started a viral campaign that offered a discount voucher worth 40%. It seemed a great deal, until it was pointed out that they ALWAYS offer a "3 for 2" deal which equates to 33% discount anyway. Of course, many of those receiving the vouchers were not regular customers and therefore were probably unaware of this.

The reaction was mixed. Some saw this as a "rip off", others as a genuine additional discount even if not nearly as substantial as at first glance. Either way, it seemed to work.

My own view at the time was that this was still a good deal as it represented the equivalent of a further 10% discount on the "normal" price*.

As of today, Threshers are offering 35% off 6 or more bottles until 22 July. "Get the Barbie out of the shed" they say. Hurrah!? That lot at Tesco are only offering 30%.

But, hold on a minute. This is apparently also instead of the usual "3 for 2" offer. Therefore, the additional money you save for buying 3 more bottles is ... 2.5%. We all like deals, but this one is rather small.

This time I can't help the feeling that the only justification for such an "offer" is to dupe customers into thinking they are getting a better discount without actually offering one. They are not actually ripping anyone off of course, they are offering something of genuinely greater value to the customer, but in this case it is very small.

For example, if you pick up 6 bottles of a wine worth £5, the additional saving is worth 50p. Hardly the kind of thing worth creating a poster campaign about or updating the tills for is it?

Whilst I applaud their "3 for 2" campaign to encourage high street shoppers to buy in slightly greater volume, I suspect that the outcome of this campaign could be to damage the reputation of Threshers as offering a good deal, and once again equate "marketing" with "rip off".

Or have I missed something here?

Of course the reason they are doing it is that consumers are so addicted to "deals" that they are now probably losing out heavily to Tesco and others who are currently offering large discounts of their own. Selling wine on the high street in competition to supermarkets is a tough business. I wonder how long Thresher will be able to try and play the same discounting game, or whether it is time for some more of that creative thinking that created the "3 for 2" in the first place.

* the "normal" price is 66% of the single bottle price, so the 'extra' discount is calculated as a % after the initial discount, therefore:
(.4-.3333)/.6666 = 0.1 or 10%

Wednesday, July 04, 2007

Varietal labelling - some clarifications (Varietals: 3)

Peter May, of the Pinotage Club and also the author of a site and book about wine labels that is definitely worth checking out, made some comments on my pet subject which I thought I ought to post here to clarify a few points.

You can read his comments on my posts on varietal labelling here. In response, I would say:

First of all, I have nothing against listing the varietal make up of a wine. Whether this should be 85% or 100% of the wine is open for debate but it isn't the fact that it is listed, but rather that the wine packaging focuses too heavily on this one element to speak to the consumer.

Second, with regard to the "flaw in the argument", I would have to disagree. It is EXACTLY because Stellenbosch, Napa and Margaret River cannot be linked to one style that I argue that the old world countries SHOULD do more to focus on regions. Although this is often regarded as negative, this could be a positive thing. A (protected) regional name is unique, uncopyable, defensible. However, it must be made to be meaningful through proper quality systems and common agreement otherwise it will be eroded.

If, as many believe and you seem to agree, the right (or even best?) varieties are planted in such regions, then there is no need to change the product itself, but maybe focus on the other elements, especially communication. They may not have done it well to date, but that is not in itself a reason not to do it.

I agree that my points were made with a very "old world" view of the world, and you rightly point out that the same argument does not necessarily transfer to New World regions. However, there are many regions of the world that are trying to replicate this model, so there is a future for it. Hunter Semillon? Barossa Shiraz? These regions do try and associate style with the regional name.

Let me make it clear that I am not advocating removing the varietal information from labels. I just think that marketers should be willing to consider relegating it a little further down the order of importance. The current mantra in the industry seems to be "varietal above all else" and I'm only trying to raise a possible counter argument.

I may, of course, be totally wrong.

Isn't that the wonderful thing about blogs?