Saturday, January 21, 2017

The "Robert Mondavi" strategy and new wine regions

Coming out of Tuesday's session on Robert Mondavi, I reflected a lot on his role in creating both the Mondavi and Napa wine brand. I would argue the average consumers don't have the skills or resources to discern between quality of wine (beyond a threshold), wine regions, let alone wine brands. As a result, willingness to pay is heavily determined by brand, friend/expert recommendation and availability. For both Robert Mondavi's own winery and Napa as a whole, the investment he made in hosting events, marketing himself as a wine expert, and educating (at that point, less sophisticated) US consumers about wine and Napa went a long way.

In some ways, other Napa wineries benefited from Robert Mondavi's investment, as Napa as a whole became well known and more popular. This analysis hasn't been done yet but I wonder if the total cost of creating his own and the Napa brand, to Mondavi, exceeds the total economic gains that his winery received. Robert was clearly very passionate about wine and creating a heritage, and so probably wouldn't be deterred from doing this, even if this investment per my speculation didn't pay off. But I wonder if is why in other new and emerging wine regions today, we don't see a brand or winery that is investing to educate consumers and elevate the status of the region as a whole (I'm thinking places I recently visited, e.g. Croatia, Israel, China). Given the amount of information distraction consumers face today in making wine purchases, they need strong and clear signalling -- and that can only be created through heavy, region-level, branding and marketing.

So maybe - the solution for new wine regions is to have either the government, or the wineries get together and invest in large-scale, region-level branding?



1 comment:

  1. Carrie, I wondered the exact same thing. As we have discussed on this blog, other regions haven't benefited from the drama of the 1976 Judgement of Paris which hugely contributed to the elevation in the profile of Napa wines. It seems that Chile has been successful in doing this since in the last 30 years without a Mondavi or a Judgement of Paris - perhaps new wine regions could look there for inspiration?

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