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A View on Wine: An Interview with a Marketing Expert in the Wine Industry

This week, I interviewed Greg Berti, Vice-President, Estate Wineries and Global Markets for Andres Wines Ltd. Greg has 20 years of experience within the wine business. He holds a B.Sc. (Guelph) and an MBA (Bordeaux) and serves on the Board of the Vintners Quality Alliance and the Niagara Culinary School.

Harbus: Greg, can you tell us about some of the new ‘trends’ or developments in the wine industry?
Greg Berti: The wine industry is full of trends – in other words, it is very fluid and is always changing. I think this is part of the appeal. It always seems that if there is a movement too far one way, a new movement emerges that goes against it. For example, as many of new world wines have moved to high alcohol, jammy, full-bodied reds, some lighter reds have started to become very popular (Pinot Noir for example). When consumers are getting used to buying wine with ‘traditional’ product cues (heritage, classiness, etc.), a whole range of counter culture wines come out (Yellow Tail, Fat Bastard, etc.). And when these become too big for some, there are a whole range of smaller, premium offerings (Red Truck and Seven Deadly Zins from California. When ‘big brand’ wine starts to become too similar, wineries are beginning to launch ‘single vineyard’ wines that have an enormous amount of character and a great story to boot. Just when you thought that ‘wine-by-the-glass’ in restaurants was for low- to mid-priced wines, you can now get a three ounce pour of some of the greatest icon wines in the world.

Harbus: Let’s talk a little bit about what you see as the emerging “flavors of the year”. First off, what are some of the new trendy whites, as alternatives to Chardonnay?
GB: We are seeing a renewed interest in Riesling (dry Riesling in particular). At the start of the 20th century, Riesling was far more popular than Chardonnay. It eventually fell out of favor when consumers moved to drier wines as these Rieslings were sweet (emerging from Germany).
To spot trends, we look for ‘leading indicators’ from various sources since, like most wine trends, the gestation can be very long – let’s say ten years in the making. For example with Riesling, we have seen sales in the UK increasing from both old world and new world countries (UK market trends tend to lead the North American market by five years or more); we have seen magazines such as Wine Spectator writing about it, and when our “highly involved” wine customers start asking for Riesling by name – we start to pay attention. Many (but not all) wine trends start with influencers within the wine community and ‘trickle down’ from there to the broader consumer base.

Harbus: And what are the new trendy reds, as alternatives to Cabernet Sauvignon?
GB: In recent years, Pinot Noir has shown strong growth – I believe that it is the fastest growing red wine in the US right now – and that was before the movie Sideways (it is the favorite wine of the main character of the movie). Given that Pinot Noir is lighter than many of the popular reds available today, this could be the start of another trend – a movement away from high alcohol, soft reds towards mid-weight more elegant reds. We believe that another variety that is in the early stages of ‘trend’ is Cabernet Franc (though it was not preferred by the main character in Sideways, the fact that it was even mentioned is important!). It is the variety that winery retail employees in Napa are keeping ‘under the counter’ for special guests – always a good sign that it is getting good ‘buzz’. And why not? Cabernet Sauvignon had stellar success and then Merlot. Why not the third part of the famous three Bordeaux varieties?

Harbus: There has been much discussion about synthetic corks within the industry, especially since many wineries have begun experimenting with plastic corks or even screw-top bottles (especially on bottles of Sauvignon Blanc). What do you think about the move to these new synthetic closures?
GB: I am fond of all bottle closures – cork, plastic and screw cap. However, not all consumers feel this way. Our research has shown that the most ‘highly involved’ wine consumers are OK with (or even prefer) screw caps, but most mainstream consumers are not. The ‘trade’ (i.e. grocery giants in the UK) love the alternative closure, since there are fewer wines returned due to corkiness. At the end of the day, wine needs to deliver to consumers on many fronts. Occasion of consumption is one of the most important drivers of consumer choice of a wine. For occasions that have a need for more traditional wine cues (i.e. a business dinner at a top restaurant) wines with cork will likely be chosen – whereas at a casual lunch with friends, an alternative closure might feel appropriate. In my opinion, alternative closures are here to stay but I would doubt that there would be any sudden movement to them – it will be a long, gradual change driven by consumers trial, knowledge and comfort with them.

Harbus: I’ve heard a lot of talk about how Robert Parker influences the industry through his ratings (Parker pioneered the first wine publication in the U.S., The Wine Advocate, in 1978). Who do you see as the most influential person in the industry today?
GB: In an industry that has so many players and so little consolidation, it would be very hard to imagine that any one person could stand out from a global perspective. If I could pick the US solely, there is probably one company that is becoming increasingly influential – Costco – due to its status as the leading retailer of premium wines in the U.S. They have been focusing on the premium segment and marketing an irresistible offering to consumers – premium branded wines (that everyone has heard of) sold with a shelf talker that details what the Wine Spectator or some other critic has said about the wine – and they sell their wine with a mark-up of between 8% – 14% rather than a mark-up of up to 50% of a traditional retailer (although there is no service or advice, as would be provided by a specialist retailer). My sense is that they, and retailers like them, will be the biggest force to shape the wine industry in the near future.

Harbus: Do you have any other interesting anecdotes to share with HBS students?
GB: There is another wine that is receiving a great deal of ‘buzz’ in the U.S. right now – the wine, of course is Canadian Icewine. The following is an excerpt from the TV show CBS This Morning. Dorothy Gaiter and John Brecher, authors of the “Tastings” column in the Wall Street Journal were being interviewed and had the following to say: “The hottest wine, the hottest dessert wine of the moment is ice wine from Canada. The most amazing thing, it’s actually made from grapes that have frozen on the vine in the Canadian winter, picked in, say, January, ten degrees below freezing, by hand. So you get this tiny, tiny amount of juice that’s filled with sugar acids and fruit. This is really the wine that’s making Canada famous right now. It was one of the most amazing experiences we had tasting this year. It made us happy to be wine writers”.

March 28, 2005
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