MINISTERE DE L'AGRICULTURE, DEPARTEMENT VITICULTURE
Strategy: Positioning
French wine has historically been the global leader of wine. As stated before, this position is now threatened. We want French wine to be considered as a high-end product on the Chinese market. Some kinds are aimed to be drunk on a daily, where others are for special occasion (Château Latour, Château Margaux…).
Our positioning will highlight two key values of French wine that are authenticity, thanks to its long and successful history, and luxury thanks to its know-how and experience. France has already started to take the position of a high-end product: it has agreed to lose market share (volume) in order to gain in value. The only exclusivity that we have compared to our competitors is the name. For the taste, competitors are producing better wine each year and New World is very price-competitive, we can be threatened on this side. Therefore we have to take advantage of the name.
First authenticity targets everyone who buys French AOC, and some who drink table wine. They expect the grapes to be cultivated in a certain traditional way and the wine production as well. It is a basic requirement from the consumer. But people who would be the most interested in knowing whether the conditions are followed would be the enthusiasts and connoisseurs.
Second luxury, this is much used by the image seekers and we have seen that worldwide, there many of them in big consumer countries (China 35%, Australia 20%).
There is not just one product, since there are different types of wine, and since we aim to sell a high-end product to the mass; therefore we have decided to use the SPICE positioning method. 5 points compose this method. Firstly, French wine can be considered as sexy: it is a product that people want and buy in an irrational way. Secondly it has its own personality (that we can improve) since it reminds the customer of France’s image, and that is chic and expensive, sometimes a little arrogant; this leads to our third point which is intelligence: French wine is a sophisticated product and can easily be considered as subtle since knowledge is required to make the difference amongst the different types of wine. Fourthly, we want French wine to be customer oriented, this means that the drinker must recognize their self in the product; finally there is the emotional factor.
First let’s see the current position of France with a graph.
France stands currently as the most premium country and the most traditional one. This means that customers are mainly couples that consume it with food in a restaurant. There is mystification behind the wine and pretension from the consumer.
We believe that this position is great since it has shown results (we have competitors in terms of volume, we therefore aimed value and now it’s the best in terms of value). But we believe that it should aim more premium than traditional. In fact, it would aim more precisely certain types of people as image seekers and could benefit a little from the modern premium type: starting to have some small group of friends consuming our product.
French wine has historically been the global leader of wine. As stated before, this position is now threatened. We want French wine to be considered as a high-end product on the Chinese market. Some kinds are aimed to be drunk on a daily basis, where others are for special occasion (Château Latour, Château Margaux…).
Our positioning will highlight two key values of French wine that are authenticity, thanks to its long and successful history, and luxury thanks to its know-how and experience. France has already started to take the position of a high-end product: it has agreed to lose market share (volume) in order to gain in value. The only exclusivity that we have compared to our competitors is the name. For the taste, competitors are producing better wine each year and New World is very price-competitive, we can be threatened on this side. Therefore we have to take advantage of the name.
First authenticity targets everyone who buys French AOC, and some who drink table wine. They expect the grapes to be cultivated in a certain traditional way and the wine production as well. It is a basic requirement from the consumer. But people who would be the most interested in knowing whether the conditions are followed would be the enthusiasts and connoisseurs.
Second luxury, this is much used by the image seekers and we have seen that worldwide, there many of them in big consumer countries (China 37%, Australia 20%).
There is not just one product, since there are different types of wine, and since we aim to sell a high-end product to the mass; let's first see where French wines stand with the SPICE method. 5 points compose this method. Firstly, French wine can be considered as sexy: it is a product that people want and buy in an irrational way. Secondly it has its own personality (that we can improve) since it reminds the customer of France’s image, and that is chic and expensive, sometimes a little arrogant; this leads to our third point which is intelligence: French wine is a sophisticated product and can easily be considered as subtle since knowledge is required to make the difference amongst the different types of wine. Fourthly, we want French wine to be customer oriented, this means that the drinker must recognize their self in the product; finally there is the emotional factor.
First let’s see the current position of France with a graph.
France stands currently as the most premium country and the most traditional one. This means that customers are mainly couples that consume it with food in a restaurant. There is mystification behind the wine and pretension from the consumer.
We believe that this position is great since it has shown results (we have competitors in terms of volume, we therefore aimed value and now it’s the best in terms of value). But we believe that it should aim more premium than traditional. In fact, it would aim more precisely certain types of people as image seekers and could benefit a little from the modern premium type: starting to have some small group of friends consuming our product.
Consumers profile
Position of big producers
Let’s focus on 4 of the biggest consumers.
GERMANY
To buy wine, people usually go to supermarkets and hard discount. Germany is buying more and more bulk wine: in 2000, 43% of the imported wine was bulk, in 2014 this number went up to 58%. It is today the first country in terms of bulk wine imports. France lost market share between 2000 and 2005 (from 17% to 11%) but since then is regaining it (13% in 2014). People buy wine mostly in supermarkets.
In terms of volume, imports went up from 12,226 to 15,149 thousands hectoliters. More specifically, imports of French wine went down from 2775 thousands hectoliters in 2000 to 2588 in 2013. To compare with competitors, Italian wine grew (from 5,482 to 5,838 thousands hectoliters) and Spanish wine grew as well (more than doubled: from 1,327 to 3,050 thousands hectoliters also from 2000 to 2013). In terms of market share, the three countries have lost some because of the growing New World wine (Chile and South Africa mostly; they imports from these countries have grew by 46% and 21% respectively).
In terms of value, the imports overall have grew from €1,963 in 2000 to €2,538 million in 2013. Imports of Italian wine went from €654 to €931 million (+42%) during the same period whereas French wine grew much less from €622 to €682 million (less than 10%). Spanish wine is below but has grown as well, from €274 to €411 million (+50%).
To put it in a nutshell, even if imports have grown in volume and in value, imports of French wine have lost to Italy, Spain and New World wine.
This might be because the growth of Germany is mainly bulk wine and that France is mostly selling medium to high-quality wine.
UNITED KINGDOM
In terms of volume, imports went up from 9,035 to 11,830 thousands hectoliters (even of the imports went down during the 2011-2013 period). More specifically, imports of French wine dropped from 2,368 thousands hectoliters in 2000 to 1,905 in 2013. To compare with competitors, Italian wine doubled (from 1,275 to 2,505 thousands hectoliters) and Spanish wine grew as well (from 779 to 1,216 thousands hectoliters also from 2000 to 2013).
Australian wine is popular in the UK. Even if they have observed a slow in recent years, their exports to the UK have grown during the period from 1,475 to 1,746 thousands hectoliters.
The imports went down in the UK is mainly due to French and Australian wine for two different reasons: for France the average price went up by 8% and reached a peak in 2012; whereas the volume of Australian wine exported to the UK have sunk by 25% in 2012 and 2013, which has directly impacted the value.
In terms of value, the imports overall have grew from €2,789 in 2000 to €3,623 million in 2013. Imports of French wine are clearly above all others (even if we don’t include champagne). It went up from €966 to €1328 million but dropped between 2012 and 2013. As we mentioned earlier, the value of imports of Australian wine sunk (from €472 to €283 million). As for Italy, they grew by 223% (from €283 to €630). As for Spain, they grew by 12% from €208 to €302 million.
What we have to mention is that the price of wine grew in the UK. That is the reason why the value of wine grew more than the volume.
To buy wine, there is a growing convenience and direct-to-home interests. 80% of the wine is bought in supermarket. White wine is sold the most with 45% followed by red wine (43%) and rosé (12%). As United Kingdom is a very opened place and a high number of different nationalities are represented; European wines are not in the first place for consummation: Australia (21%) is first, followed by Italy (17%) and France (only 12%). Even though bulk wine account for only 29% of importation in 2013, it went up from 11% in 2000. French bulk wine declined over the past 15 years. We believe that French wines sold in UK are wine of good quality and high prices.
UNITED STATES
In terms of volume, the imports went up from 4,402 to 10,898 million hectoliters (+247%) during the same 2000-2013 period. Italian wine comes first and their exports also skyrocketed from 1,575 to 2,900 million hectoliters (+84%). Australian wine fluctuated more but also grew from 564 to 1828 million hectoliters (+324%), Spanish grew by 350% and France only grew by 6%. They were in second position in 2000 only to Italy, but in 2013 they lost two positions to Australia and Chile. Basically, imports from all countries skyrocketed except for France. They have lost market share to their Old World competitors but also from the New World.
In terms of value, French wine was first in 2000 with €1,007 million but remained stable over the years (€1,084 million in 2013) whereas Italian wine imports doubled. The rest of the competitors grew as well but still lag behind Italian and French wine.
What is important to mention is that growth of imports did not grew much between 2012 and 2013, and that it is the imports from the New World that slowed down: the imports from the Old World continued their growth.
To buy wine, just as in UK, there is a growing interest in convenience and direct-to-home. Importation of bulk wine sharply increased since 2000: from 4% in 2000 to 28% in 2013. This change in consumption did not change importation of French wine. French position in the US did not change the past years: same as in the UK. In fact, importation of French bulk wine is almost nothing whereas importation of French bottled wine remained stable over the years. Since importation has sharply grown since 2000, the market share of French wine decreased during the same years. France has lost its first place to Italy.
CHINA
In terms of volume, imports of wine skyrocketed (more than 1500% in 10 years). Here, French wine took the first position in 2013 (with 1,368 million hectoliters) and is way above the second wine Chile (836 million hectoliters). In 2006 France was only 4th to Spain, Chile and Australia. But they managed to impose themselves whereas the imports from Spain, Chile and Australia grew as well but not nearly as much as French wine (respectively 75%, 334% and 200%; whereas France grew by 800%). In terms of value this phenomenon is even more observable).
