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INDUSTRY REPORT
French Twist
Despite fierce competition and a
fluctuating Euro, savvy marketing
keeps French wine sales going strong
in the U.S.
By Roger Morris
A
mericans have always had a love affair with
France’s fabled wines, although, a few gloomy
nights in recent years led pessimists to bid
adieu to the French wine trade in the U.S. Yet, the
prestige of drinking French products has continued to
hold steady even with the challenges. And considering
all of the growing competition, the French have been
exercising their marketing muscle to keep Americans
drinking French wine.
According to UBIFrance, French
export numbers to the U.S., not including
Bordeaux and Provence, were down -12.5%
in volume the first five months of 2008,
compared to the first five months of 2007.
However, value was up +1.8% compared to
the same time period in 2007.
Up until recently, competition was
something that threatened French wine
popularity stateside. French partisans looked
at Australian wines in particular, thanks to
their explosive growth in the U.S., as an unstoppable juggernaut capturing both highend media attention and low-end mass sales.
Today, Australia is not causing much worry.
“Our Australian sales have slowed, especially anything over $20, while our French
sales are quite strong, even at the ridiculous
Bordeaux futures prices,” says Mark Wessels
of MacArthur Beverages in Washington,
D.C. Terry Shiple, manager of French wine
estates for The Country Vintner importer,
agrees. “Australia has run its course,” he
says. “Their wines aren’t the bargains they
were five years ago.”
This year’s sagging American economy
does cause a newfound anxiety, though,
as sales of French wines have staggered
because of the high value of the euro. Yet,
the worst may be over, especially for some
of the stronger performers. “Bordeaux sales
to the U.S. were up 12% in volume and
25% in value during the first five months
of this year,” says Pascal Loridon, marketing
“Bordeaux sales to the
U.S. were up 12% in
volume and 25% in value
during the first five months
of this year. This is the
first time in two years
that’s happened – in spite
of the weak dollar. And
that goes across all price
categories.”
-Pascal Loridon,
marketing director of
Le Conseil Interprofessionel
du Vin de Bordeaux
director of Le Conseil Interprofessionel du
Vin de Bordeaux (CIVB). “This is the first
time in two years that’s happened – in spite
of the weak dollar. And that goes across all
price categories.”
Since the 21st century, the French wine
business has been counted out numerous
times, yet it keeps coming back stronger.
How do these garçons do it?
INDUSTRY REPORT
(Far Left) A print ad promoting
Rhône wines as the red wine for
convivial and informal moments;
(Left) Pommery introduced
portable Champagne POPs to
appeal to the U.S. market.
Remaining Strongly
Committed to the Market
Both personally and professionally, the trade
at all levels says that, even in bad times, the
American consumer is worth fighting for.
Laurent Drouhin, a principal in familyowned Joseph Drouhin, moved his family to
New York in 2005 to look after their American business on the ground. “I wanted to be
in touch with this market,” he says. “You
have a different vision from here. And for
Drouhin, the family message is important.
That clicks here.”
Anabelle Cruse-Bardinet, owner of
Château Corbin in St.-Émilion, took classes
to improve her English and hired a New
York public relations consultant, Anne Riives, so she could meet American buyers
and media on their own turf in their own
language. “I have tried to increase Corbin’s
presence in the United States because it is
my leading market,” she says.
The commitment has been professional
as well. Stephanie Teuwen, who represents
Loire Valley Wines in the U.S., says that
even when the bottom dropped out during
the French boycott resulting from the Iraqi
war, the wines did not lose their appeal in
the U.S. “We decided to just keep doing
what we were doing. Three days after the
Iraq war started, we had a media event in
New York for Loire wines; it was full.”
France’s commitment will continue to
stretch into an uncertain future, the regional
trade organizations say. In May of this year,
the European Union voted to channel funds
to member countries to promote French
wines in other regions. Anticipating these
funds, Arnaud Pignot, general manager of
Inter-Rhône, says his group first considered
targeting funds to France’s emerging Asian
market, but decided instead to direct most
of the budget toward the U.S. The CIVB’s
Loridon, waiting for the actual distribution
to occur, agrees: “I have two budgets for the
U.S.; one is double the other.”
Improving Quality
France’s commitment
will continue to stretch
into an uncertain future,
the regional trade
organizations say. In May
2008, the European
Union voted to channel
funds to member countries
to promote French
wines in other regions.
Anyone who has not visited French vineyards since the turn of the new century may
be surprised at how widely improvements
have been made. Such practices as dense
planting, hedging, leaf plucking and green
harvesting – once the province of the premier cru crowd – are now common practice
at better lower-classified wineries and many
family-run operations. Similar investments
have been made in the wineries.
Results of this broader quality initiative have been noticed in the wine shops.
“I have a strong customer demand for petite
châteaux under $40,” says Rick Ostrand, imported wine manager at State Line Liquors
in Elkton, MD. “Burgundy sales have been
off the charts with the 2005 vintage, and
you can get very good values at $20 to $50.”
Ted Armbrecht, co-owner of the Wine Shop
at Capital Market in Charleston, WV adds,
“Customers are seeing the quality and value in
wines from the Languedoc, the Rhône Valley
and the Loire.” He regularly features French
wines with his Terrific Ten Wines for Under
$10.99 promotion.
Targeting All Levels
of Influence
“We are approaching the American market
in several ways,” says Christine Molines, export manager of Conseil Interprofessionel
des Vins du Languedoc (CIVL), a relatively
new player in the market. “We are conducting promotional programs in several large
retail chains and working with wholesalers.
We are also reaching out to press and key
influencers.” A “Languedoc Ambassadors
Tour,” for example, features 20 representative wines from the region.
According to Loridon, the CIVB is now
in its fourth year of a media/trade promotion
called 100 Top Bordeaux for Under $30, but
is also heavily concentrating on promotion
programs with large liquor chains such as
Spec’s, Liquor World, Benny’s and Costco.
“We have conducted more than 200 training seminars for their employees,” he says,
“not to teach them how to sell wines, but to
educate them about Bordeaux.” Forty CIVB
employees in the United States have been
trained for this purpose.
“We decided we needed to offer the
consumer something,” says Julien Camus,
president of The French Wine Society, a
trade-funded organization headquartered
in Washington, D.C., “to have a ‘pull’
rather than a ‘push’ marketing strategy.” Its
branches in San Francisco, New York,
caption
Gérard Bertrand’s vineyards in the
Languedoc, a region where many
small importers are now flocking.
Chicago and Miami regularly host
consumer events, and now the organization
is spreading its message to wine educators.
In October, the group had a three-day wine
educator training conference in Washington, with follow-up two-day “teach the
teachers” programs in San Francisco, New
York and Washington.
Furthermore, Inter-Rhône’s U.S.-based
ambassador, Daphné Payan, says she attends
between 8 to 12 wine festivals a year to pour
and promote Rhône wines to consumers.
Profiting From Maturing
American Tastes
Trends reveal Americans are turning away
from the New World’s fruit-forward wines,
while the French have become more fruit
conscious. “People are getting tired of the
fruit bombs and are looking for balanced
wines with less alcohol and less oak,” says
Michaela Rodeno, CEO of Robert Skalli
wines in the U.S. “French wines fit that profile perfectly.” She also believes that French
wines still carry cachet. “There’s still something ‘oh-la-la’ about them,” she says. “The
trend toward thinking about wine in terms
of food is also in our favor,” Payan adds.
Finally, vintages still count with French
wines, and the trade responds to them.
“We’ve had a string of very good vintages
in Bordeaux, especially the 2005, and there
have been great vintages in Burgundy and
the Rhône that have pushed sales,” says
Country Vintner’s Shiple.
Adapting to American
Marketing Preferences
“We did a survey which showed Americans
like to have the grape variety on the label,
while we in France believe in terroir – where
the grape is grown,” says Inter-Rhône’s Pignot. “So we say, we understand that you
want the grape, now let us tell you about
terroir. It’s an opportunity for us.”
Robert Skalli wines provide a good example. Their labels prominently tell the
consumer they’re buying Cabernet Sauvignon and Pinot Noir from the “South of
France” while the back label carries what
traditionally would have been prominent on
the front: one is a Vin de Pays d’Oc and the
other a Vin de Pays d’Ile de Beauté.
Cork alternatives are popping up all
across France, even in tradition-oriented
Burgundy, where Drouhin uses screwcaps on
entry-level wines. Pommery Champagne,
meanwhile, introduced its smaller, trendy,
portable portions called Pommery Pops
a few years ago. Regional slogans and advertising campaigns try to differentiate
appellations using American communication methods. Loire is now the place to go
for “French Wines with an Attitude,” while
Alsace dramatically uncouples itself from
French cuisine –“Eat Asian? Drink Alsace!”
Laurent Drouhin pretty well sums
up the overall French approach: “We want
to combine being traditional and
being modern.”
Developing
“Emerging” Regions
The South of France was once known as a
great pool of “plonk” – undistinguished wine,
often blended, sometimes illegally, with wine
from higher-end regions. Now wine companies and investors are snapping up property
there – it’s cheap and there are few varietal
constraints that some traditional appellations require. The Bordelaise Cazes family
of Château Lynch-Bages and Michel Lynch
Wines from the Rhône Valley
offer quality at value prices, making
them ideal for “best buy” promotions.
wines, for example, purchased 370 acres in
the Minervois region of Languedoc in 2002
and are now producing an upscale, Syrahdominated blend called L’Ostal Cazes.
“Provence is a real success story, especially with its rosés,” says Serge Lozach, director of the American arm of Sopexa, the
French wine marketing group. “Its sales are
up 40% this year.” Small importers, looking for a new wine that no one else has,
are flocking to Languedoc and Provence
the way they once did to Burgundy and
Alsace. And the competition is getting intense, MacArthur’s Wessells says. “If a guy
comes in to show me a new wine from the
south of France, it better be good,” he notes,
“because the guy behind him will probably
have a good one.”
Learning to Play
With Others
In most regions, winemakers are abandoning the traditional “every vintner for himself” marketing approach in favor of “a rising tide raises all ships” one. In the Loire,
Teuwen points out, three different wine associations pooled their efforts and even allowed lesser-known appellations a place in
the limelight. In a “Sancerre and friends”
approach to selling Loire Sauvignon Blancs,
promotions don’t just favor “Sancerre which
Americans know and sells for $24-$25,” she
says, “but we tell them about Quincy, which
sells for about $16.” Bordeaux CIVB’s Top
100 affordable wines also features product
from lesser-known regions.
Courting the “Millennials”
Unlike older American drinkers who grew
up on French basics before personally discovering New World wines, the “Millennials”
INDUSTRY REPORT
Nicolas Boissenau, who reaches
out to “Millenials” with his blog for
Robert Skalli.
– roughly, those born after 1980 – have no
such history or biases. “The “Millenials”
are not afraid of anything,” Skalli’s Rodeno
proclaims, and her Skalli is out to capture
them with what she calls “discovery wines.”
As a result, Skalli has employed a different type of brand ambassador, 25-year-old
Nicolas Boisseneau. Boisseneau comes from
a Bordeaux winegrowing family, and Skalli
has set him up to blog across America at
www.nicolasdiscoversamerica.com, discussing his travels with people of a similar age
while extolling the virtues of Skalli wines.
Pamela Wittman’s Millissime Ltd. represents another Nicolas – Nicolas Feuillatte Champagne. “It’s a young brand itself,
barely 30 years old,” she explains, “so we’ve
always gone after a younger audience.” That
includes events like sponsoring a party for
a hip New York hair salon. Wittman also
notes Champagne plays by different rules
than most other French appellations. “It’s
a category by itself,” she says. “Many consumers don’t consider it a French wine, plus
Champagne has always spent a lot of money
on brand promotion; it knows how to adapt
to markets.”
“The Millennial generation is looking
for variety and authenticity,” says InterRhône’s Payan, “and they’re coming back to
wine’s European roots.”
Making Wine Personal
It wasn’t that long ago that the attitude of
most French producers was, “We won’t come
to see you, and we certainly don’t want you
to visit us.” Now, winemakers are constantly
flying across the Atlantic to meet trade and
consumers in major U.S. cities, and the
theme that resonates with many American
consumers. Olivier Portet, import director
for Wilson Daniels, says that sales of biodynamic Alsace producer Marc Kreydenweiss,
for example, have grown over 100% over
last year. “The wines are particularly popular on the East Coast and in California,” he
points out. All regions of France now have
major biodynamic wineries.
“The Millennial
generation is looking for
variety and authenticity,
and they’re coming back
to wine’s European roots.”
-Daphné Payan,
Inter-Rhône
châteaux in Bordeaux are alive with dinner
parties for Americans during the primeurs
barrel tastings every April and at VinExpo
every other year. Journalists, importers,
distributors and major retailers are urged
not to bother with hotels but to sleep over
in châteaux.
Additionally, wine tourism in all regions
is rapidly growing in France, either via formal, Napa-style touring companies, or with
old-fashioned introductions of consumers
to wine producers via retailers. Catherine
Lepartmentier-Dayot heads the Bordeaux
office of Great Wine Capitals, a league of
cities that are adjacent to the world’s great
vineyards. “We promote wine awareness,
and we share each region’s best practices in
promoting wine tourism,” she says. For the
past six years, Bordeaux has thrown a consumer wine festival that lasts four days and
rivals any American-based event.
Partly as a result of efforts by Loire-based
winegrower Nicolas Joly, France has been
the world leader in producing green wines,
those that are biodynamic or organic – a
The New
Challenge Ahead
But, as always, there are clouds on the
French horizon, and one storm that goes
beyond the high-flying euro is brewing over
the Bordeaux futures prices.
“Sante Fe is iconoclastic enough that
wine sales actually went up during the
French boycott,” says Susan Eagan, general
manager of Susan’s Fine Wine & Spirits
in that city. “But now I am personally appalled at the prices of Bordeaux. I don’t
even look at selling my customers futures
anymore.” Across the country in Maryland,
State’s Line Ostrand echoes the sentiment.
“Bordeaux classified growths no longer
make economic sense for a store like ours,”
he says. “We have to invest too much
up front if we want to buy first tranche
[offering].” Whether this trade pushback
represents simply a market shift or a market
threat is too early to tell.
Importers are famous for lecturing
châteaux owners during primeurs week on
the dire consequences of price gouging.
Earlier this year during one such conversation, led by two importers over dinner
at a well-regarded, third-growth château,
the owner held up his hand to slow the
onslaught. “We hear you,” he smiled, “we
hear you.”
It might take a vintage or two, and perhaps some messy repercussions, for the message to really get through, but most likely he
and his fellow vintners will eventually listen
and learn – and another French wine crisis
will have been overcome. n